Initial onboard revenue metrics off the Norwegian Jade’s initial European cruises from Athens were very strong.
“As an indication of this top-notch service delivery, our onboard revenue on this first crew significantly exceeded our target, which was focused on 2019 actual results by over 50 per cent,” said Frank Del Rio, president and CEO of Norwegian Cruise Line Holdings.
It’s a sign of pent up demand, according to Del Rio, with the consumer willing to spend.
Added Mark Kempa, executive vice president and CFO: “And when you look at the spending trends of it, it was your normal areas. Shore ex was very intense, food and beverage and then casino. So it’s great to see that we’re seeing the trends that we’re used to. Customers are willing to spend. While it’s early, it is certainly very, very encouraging.”
Carnival Corporation, Royal Caribbean Group and Norwegian Cruise Line Holdings are still burning through cash as some ships emerge from lay-up back into operations.
Cash burn numbers may be up in the third quarter with added costs to reactivate ships, needed maintenance, potential drydocks, procurement, getting crew back and more.
Only one out of the three big cruise companies provided estimates on third-quarter cash burn, indicating it would be up close to 45 per cent.
Carnival Corporation
For Carnival Corporation, the company’s cash burn for the first half of 2021 was $500 million per month, which was better than a previous forecast of $550. The improvement was mainly due to the timing of cash received from ship sales just before the end of the second quarter and some other small working capital changes.
With ships quickly relaunching, and a short booking window for cruises announced close to departure, the company said it will not provide a forecast for its third-quarter cash burn rate.
Independence of the Seas in Southampton Photo credit Dave Jones
Royal Caribbean Group
Royal Caribbean reported its average monthly cash burn rate for the second quarter of 2021 at approximately $330 million, slightly higher than the prior quarter as the company returned additional ships into operation.
Similar to Carnival, Royal Caribbean would be not providing a forecast for the third quarter.
“The environment remains fluid, and for this reason, we are not providing a cash burn estimate or the related offsets generated by revenue and new customer deposits. I will highlight that the burn rate for the ships that are kept at layoff is expected to be consistent with our previous expectations,” said Jason Liberty, executive vice president and CFO, on the company’s second-quarter earnings call.
Norwegian Star in Mexico Photo Credit Dave Jones
Norwegian Cruise Line Holdings
Norwegian Cruise Line Holdings said its average cash burn in the second quarter was $200 million per month, higher than its guidance of $190 million driven by the announcement of additional ship relaunches in the company’s voyage resumption plan and the associated restart expenses.
“As for the third quarter, we expect our average monthly cash burn rate to increase to approximately $285 million as restart expenses accelerate with additional vessels entering service,” said Mark Kempa, executive vice president and CFO. “Restart expenses are primarily related to repositioning, provisioning and stopping of vessels, implementing new health and safety protocols and a measured ramp-up of demand-generating marketing investments.”
Norwegian Cruise Line yesterday officially commemorated its cruise comeback with the Norwegian Jade sailing from the port of Athens and becoming the first ship in the fleet to welcome back guests after a 500-day pause.
Until November 2021, guests sailing aboard Norwegian Jade’s Greek Isles itinerary will wake up in a new destination every day, able to spend eight-to-nine hours in each port.
“Welcoming our guests and crew on board has been one of the most memorable moments of my over 30-year career,” said Harry Sommer, President and Chief Executive Officer of Norwegian Cruise Line. “We are excited to embark on the Great Cruise Comeback with a brand-new itinerary and homeport for our brand, offering our guests an even greater selection of unique vacations at sea.”
Greek Minister of Tourism Harry Theoharis added, “We are overjoyed to welcome Norwegian Jade and her guests to Greece. The planned itineraries will offer unique experiences that combine our rich history, bustling culture and famous gastronomy.”
“Norwegian Jade’s first Greek Isles voyages sold out shortly after we made the announcement that we were on our way back,” said Sommer. “With such strong demand, we are glad to expand our offering in Greece with seven ships through 2023, providing our guests with a range of innovative vessels and itineraries to choose from.”
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