Revenue rises, but IPO expenses put Norwegian Cruise Line in the red

Revenue rises, but IPO expenses put Norwegian Cruise Line in the red
By Tom Stieghorst
Norwegian Cruise Line posted a $96.4 million first-quarter loss, but said accounting rules that require it to recognize some one-time expenses masked a solid improvement in its business.

Revenue rose to $527.6 million from $515.4 million.

Norwegian said that without $110 million in expenses related to its public offering in January, income would have been $12.9 million. Norwegian’s net profit was $3.3 million in last year’s first quarter.

“We had a fantastic quarter — above consensus,” said CEO Kevin Sheehan in an interview.

The expenses include costs tied to prepaying bonds and stock compensation for former executives.

Sheehan said by using the proceeds of the public offering, Norwegian was able to replace secured debt that carried 11.5% interest rates with unsecured debt that costs about 5%.

Norwegian raised $447 million in the quarter by selling 23.5 million shares for $19 each.

Excluding fuel, net cruise costs fell 1.5% in the quarter. Sheehan said the expense of introducing Norwegian Breakaway will likely raise cruise costs by 5% to 6% in the current quarter.

The New York-themed Breakaway is set to arrive before daybreak on May 7 at the Manhattan Cruise Terminal. The ship will be named the next day by the Rocketttes before starting a series of seven-day cruises to Bermuda.

Chancellor: no change on APD

Chancellor: no change on APD

Chancellor George Osborne signalled no change in government policy on Air Passenger Duty today in a Budget speech which made no mention of the tax.

Osborne announced a freeze in petrol duty and a cut in the duty on beer, but made no reference to APD.

However, documents released by the Treasury alongside the Budget measures showed projected revenue from APD rising year by year to 2017-18.

The Treasury has previously said APD would rise annually by the rate of inflation.

Government revenue from APD is forecast to rise 3.6% year on year to £2.9 billion in 2013-14 and to £3.8 billion in another four years.

Osborne did look to address business concerns by cutting the rate of corporation tax on profits to 20% from April 2015, hailing it as “the lowest business tax of any major economy in the world”.

He also announced help for home buyers. But otherwise the Chancellor said there would be no change in policy on deficit reduction and spending, insisting: “Cyprus is a sign the crisis is not over.”

Research finds two thirds of holidaymakers will book online

Research finds two thirds of holidaymakers will book online

By Ian Taylor

Research finds two thirds of holidaymakers will book onlineThe latest TNS consumer insight for Travel Weekly underlines the popularity of digital channels. Ian Taylor reports

Two thirds of UK adults planning an overseas holiday or break intend to book online this year, according to research for Travel Weekly.

A survey of more than 2,000 adults by TNS in early February suggests up to 20 million could book their travel online, compared with more than eight million with a high street agent or by phone.

Researchers found that 42% of respondents (including those not planning an overseas holiday) said they would book online, 12% on the high street and 5% by phone.

Of course, booking online does not have to mean going direct or buying from someone outside the trade. Few high street retailers fail to sell online; Tui Travel reported 37% of its summer 2013 bookings were made online up to early February and expects this proportion to increase this year.

However, the results confirm consumers are increasingly at ease booking all kinds of holidays – including package holidays – on the internet.

Young adults are clearly most at ease: 55% of 16 to 34-year-olds said they would book a holiday or break online, against 25% of over‑55s. The proportion of student online-travel bookers (60%) was three times higher than those of retired age (20%).

More than half (54%) of adults in better-off households expected to book online, as did a similar proportion (52%) of those with children living at home.

Londoners and those in the southeast showed a similar propensity to book on the internet (54%), while less than one-third did so in Yorkshire, the East Midlands and Scotland and just 36% across the north – suggesting a digital divide.

However, the greatest variation in the survey results was in the proportion planning to take an overseas holiday, rather than how they would book it.

TNS found more than one third (36%) of respondents did not expect to go overseas in 2013 and a further 4% were undecided.

That suggests 60% intend to have a holiday abroad – a healthy market in light of previous research showing less than half the adult population (44%) are likely to go away in any year.

It is important to note people often express an intention to go abroad at this time of year but subsequently fail to do so – the young being especially prone to this.

February’s TNS survey found three-quarters of 16 to 24-year-olds planned an overseas holiday (and 56% intended to book online). Yet previous TNS research which asked 16 to 24-year-olds whether they had a holiday abroad in the past 12 months found 60% had not.

Almost half (48%) of adults over 55 said they were not planning an overseas holiday this year; neither were half the adults in less well-off households (47%).

Most adults with children did plan a holiday (68%), compared with 56% of those with no children. But the former appear more dependent on finding a cheap holiday – 38% of those with children identifying price as an important factor in whether they go away, against 28% of those without children.

TNS group director of travel Tom Costley noted “significant age variations” in online booking habits but said: “The proportion choosing to book via a high street agent does not vary to any significant extent, irrespective of age.”

He added: “It’s evident that being able to access a cheap price allows some to go on a holiday which might otherwise not be available to them.”