NCLH: Tickets and Onboard Drive Q2; Food Spend Down

Increased ticket and onboard revenue drove Norwegian Cruise Line Holdings (NCLH) record second quarter (Q2) earnings.

Despite carrying fewer passengers than last year, 569,857 down from 574,838, NCLH posted more passenger cruise days, 4,517,788 up from 4,237,020, and higher gross and net ticket and onboard revenue per passenger day.

The passenger number was down due to longer cruises, according to NCLH.

Operating costs were also up, except food costs that were down for Q2 and for first six months of the year, despite an increase in passenger cruise days.

The reduction in food costs were primarily due to a series of purchasing initiatives undertaken over the past year. In a prepared statement to Cruise Industry News, NCLH said: “We have been successful in finding significant efficiencies across our food distribution through a concerted effort to improve processes in delivering consumables to our vessels around the world. In addition, we have leveraged our buying power to deliver substantial hard savings across our food purchasing without compromising quality.

“For example, on a number of key proteins that represent the highest cost items across our food costs, we have been able to cut costs significantly simply by purchasing directly from the suppliers and cutting out middlemen. These initiatives have resulted in savings while providing the same, or in many cases, better quality protein.

“During this period we have also been refining the dining experience across our fleet, and with the benefit of guest research and feedback, we have refined our menus to better meet the preferences of our guests and, as a result, we have seen our guest experience scores improve year over year.”

NCLH spent $47.3 million on food in the second quarter of this year and $95.5 million for the six-month period, compared to $49.8 million and $100.8 million, respectively, last year.

Gross revenue per passenger day was $297.52 this year, up from $280.11 last year. Net revenue per passenger day was $229.63 this year, up from $216.55.

Major Cruise Companies Set for Significant Growth Through 2022

The major brands will continue to get new megaships into the future. (photo: Sergio Ferreira)

The cruise industry’s growth trek will continue into the future, as current data from the 2015-2016 Cruise Industry News Annual Report shows significant capacity increases occurring over the next seven years.

Carnival Corporation will take its industry-leading position from roughly 10 million passengers this year to an estimated 13 million by 2022.

Royal Caribbean, meanwhile, will grow from over 5 million passengers to at least 7 million, and possibly more with no orders yet on the books for the 2020s.

Norwegian Cruise Line and MSC Cruises will see the most significant percentage growth between now and 2022. Norwegian is set to increase capacity by some 50 percent while MSC could double its 2015 capacity by 2022 based on seven new ship orders from an estimated 1.5 million to 2.9 million passengers

Ship withdrawals will be relatively insignificant as ships leaving fleets will generally be smaller, older vessels, while new tonnage coming in is expected to be of the megaship variety.

About the Annual Report:

The Cruise Industry News Annual Report is the only book of its kind, presenting the worldwide cruise industry through 2025 in 350+ pages. Statistics are independently researched. See a preview of last year’s edition by clicking here.

The report covers everything from new ships on order to supply-and-demand scenarios from 1987 through 2021+. Plus there is a future outlook, complete growth projections for each cruise line, regional market reports, and detailed ship deployment by region and market, covering all the cruise lines.