If one looks at the increasing popularity of cruise holidays, you sometimes forget that it is also a very competitive industry and that it is not a given that cruise lines’ profit will keep on increasing.

Carnival Corporation, for one, has seen a decline in its profits. The company has reported a non-GAAP net income of $1.9 billion for 2011 – which is a 5% drop from the $2 billion of net income it reported for the 2010 financial year.

The drop in net income comes despite gross revenue for 2011 rising with 8.9% from $14.5 billion to $15.8 billion.

When asked to comment on the 2011 results, Micky Arison, the CEO and Chairman of Carnival, said “On the whole, 2011 was an encouraging year for our global portfolio of cruise brands.”

He added that their North American operations performed the best, while Australian, European and Asian operations were in line with the previous year despite the disruptive impact of the geo-political instability in the MENA region.

He attributed a significant portion of the drop in net income to a surge in fuel prices and said that increases in these prices cost the company $535 during the year.

Carnival recently announced a fuel derivatives programme to try and offset the trend and lessen the economic risk attributable to sudden fuel price increases.

He went on to say that the company generated $3.8 billion in cash during 2010, which was more than enough to fund its capital investment programme.