NCL Holdings says cruisers eager for exotic sailings

Posted on 18 May, 2020 by Spacejunkie2

Oceania Cruises’ Marina.

Norwegian Cruise Line Holdings Ltd. (NCLH) said that consumers are booking cruises to far-flung destinations in 2021, with Japan and Dubai among the top itineraries, along with several world cruise segments.

NCLH CEO Frank Del Rio said during the company’s earnings call that for its Oceania and Regent brands, demand for those itineraries in the first and second quarters of next year indicates that people will be willing to take long-haul flights.

“And so, this notion that people aren’t going to want to cruise to faraway places or exotic destinations, what we’re seeing is defying that,” he said. “So we’re not seeing any particular area of strength other than these Japanese itineraries, these world cruise segments that are sold out, literally.”

Del Rio also said during the call that he anticipates it would take about six months to resume service across its entire, three-brand fleet.

“The return to service of a phased approach of roughly five vessels per month is what we believe we operationally could handle in terms of bringing back the ships from cold lay-up, including re-crewing the vessels etc.,” Del Rio said. “Given that we have 28 vessels if you bring back an average of five vessels a month, it’s going to take about six months to get all ships back operating.”

During the earnings call, Del Rio said that timeline assumes that the itineraries those ships would operate are available.

“So the six-month ramp-up assumes more than anything else our operational capability to ramp up and that the ports are open,” he said.

Del Rio said that consumer demand is not a concern.

“We believe consumer demand and the bookings that follow are based on our ability to market, travel agents being back open again, the whole industry being back in operation as opposed to sitting idle,” he said. “There is pent-up demand, let’s not forget that. People only talk about the negative, but the fact that the industry has been shut down now over four months, there’ll be pent-up demand. People will want to cruise again.”

He also acknowledged that it will take time for cruising to come back to where it had been.

“We just have to be patient,” he said, adding that “no one is more impatient than me. But I recognize that this is going to be a recovery effort that’s going to take multiple quarters, perhaps multiple years to get back to the good old days of 2019.”

$211M loss in the first quarter

NCLH reported an expected loss of $211.3 million for the first quarter of 2020, compared with income of $181.8 million one year prior. Revenue decreased 11.2%, to $1.2 billion, compared to $1.4 billion in 2019, for the quarter ended March 31.

NCLH said it had “taken decisive action to significantly strengthen our financial position” in response to the Covid-19 global pandemic, including the company’s $2.4 billion capital raise, which Del Rio said positions the line “to weather an unlikely scenario of over 18 months of suspended voyages.”

“Our guests continue to demonstrate their desire for cruise vacations,” Del Rio said. “And we continue to experience demand for voyages further in the future across our three brands.”

NCLH reported “significant softness in near-term demand and an elevated rate of cancellations for existing bookings.”

But the company also said there “continues to be demand for cruise vacations, particularly beginning in the fourth quarter 2020 accelerating through 2021.”

The company reported that slightly more than half of its guests booked on cancelled sailings had requested cash refunds instead of future cruise credits.

NCLH said that it had begun developing a comprehensive and multifaceted strategy to enhance its health and safety protocols, including “enhanced screenings, upgraded cleaning and disinfection protocols and plans for social distancing.”

NCLH said it had furloughed approximately 20% of its shoreside workforce through July 31.

Norwegian Cruise Line reports $1.9bn loss

Posted on 15 May, 2020 by Spacejunkie2

Norwegian Cruise Line reported a first-quarter loss of $1.9 billion, with the impact of a coronavirus-enforced suspension of sailings exacerbated by a $1.6 billion write-down in goodwill.

However, Norwegian Cruise Line insisted it is now “well-positioned” to withstand even 18 months of suspended operations after raising $2.4 billion in funds in early May.

Norwegian Cruise Line president and chief executive officer Frank Del Rio said: “We’ve taken decisive action to strengthen our financial position, including our highly successful and oversubscribed $2.4 billion capital raise announced last week.

“We believe this, coupled with other liquidity-enhancing initiatives, makes us well-positioned to weather an unlikely scenario of over 18 months of suspended voyages.”

Del Rio added: “We continue to experience demand for voyages in the future across our three brands.

“As we prepare to resume sailings, we’re working alongside the US and global public health agencies and governments to develop and implement enhanced cruise health and safety standards.”

He reported, “demand for cruise vacations particularly beginning in the fourth quarter of 2020, accelerating through 2021”.

Norwegian described overall bookings and pricing for 2021 as “within historical ranges”.

The cruise line noted all three of its brands had begun the year “in a record booked position and at higher prices” than last year despite a 7% increase in capacity.

However, it reported “slightly over half of the guests” had declined to rebook or accept cruise credits in place of cash refunds for cancelled cruises despite being offered “typically 125% of the cruise fare paid.

The company’s credits are valid through to the end of December 2022.

Norwegian revealed it had $1.8 billion of advance ticket sales at the end March, of which $800 million were for cancelled voyages to the end of June and $370 million for voyages scheduled for the second half of this year.

The company said it continues to take bookings for later this year, 2021 and 2022, and to receive new deposits and final payments.

Norwegian reported it has pared its operating costs to between $70 million and $110 million per month while voyages are suspended, following a series of cost-cutting measures.

Additional capital-spending reductions and deferred debt payments mean its monthly cash burn has been reduced to between $120 million and $160 million per month.

However, this excludes cash refunds to customers.

Norwegian noted it had debts totalling $8.6 billion at the end of March, with available cash and cash equivalents of just $1.4 billion.

However, a series of capital markets transactions launched on May 5 had raised $2.4 billion, including a $400 million investment by US private equity firm L Catterton.

Norwegian Cruise Line chief financial officer Mark Kempa said: “Our swift actions to preserve cash and secure additional liquidity provide a strong foundation to withstand the operational and financial impact of Covid-19.

“We are confident the company can navigate through an unlikely extended zero-revenue scenario and emerge in a strong position.”

Carnival Cruise bookings up 600 PERCENT

Posted on 11 May, 2020 by Spacejunkie2

Carnival Cruise Line bookings rose 600 per cent after the company said it will resume some of its cruises in August
That’s 200 per cent more bookings than this same time last year, reports a travel industry representative
Customers were primarily focused on locking down reservations and getting premium deals, says an American Express travel agent
Most of the travellers calling are described as young, healthy and eager to travel after being forced to stay home during COVID-19 lockdowns
The customers are ‘not a bit concerned about travelling at this time,’ says the representative

Carnival Cruise Line bookings rose 600 per cent after the company said it will resume some of its cruises in August, says a member of the travel industry.

The sharp rise in bookings is 200 per cent higher than this same time last year, reports an American Express travel agent.

An Instagram post from Carnival (pictured) explains 'enhanced protocols and social gathering guidelines will be put in place' once the company starts sailing again

Customers were primarily focused on locking down reservations and getting premium deals, says the agent.

Most of the travellers calling in at the moment were described as young, healthy and eager to travel after being forced to stay home during nationwide coronavirus quarantines, TMZ reports.

The customers are ‘not a bit concerned about travelling at this time,’ the representative told the news outlet.

So far, there have been 1,366,962 confirmed cases in the US of the coronavirus, which has been blamed for 80,696 deaths.

An Instagram post from Carnival explains that ‘enhanced protocols and social gathering guidelines will be put in place’ once the company starts sailing again.

While Carnival says it hopes to get back on the high seas by August, the company warns that plans could change and that there are no guarantees because of the potential for further delays due to the coronavirus pandemic.

‘We continue to work with various government agencies, including the CDC, as we introduce new onboard protocols, but there is no assurance of a return on August 1,’ Carnival wrote in its announcement.

Carnival had previously hoped to return in April or May after it first suspended its voyages in March. The date was later pushed to June 26 and now August 1.

One-fifth of all global ocean cruise ships were infected with the coronavirus after the outbreak began, leaving at least 2,592 crew and passengers infected and killing at least 65, according to research compiled last month detailing the pandemic’s impact on the cruise ship industry.

The data revealed that cases of the deadly virus were directly linked to at least 54 cruise ships, as they continued to travel the waters while the pandemic ravaged communities on land.

All four of the world’s largest cruise lines – Carnival, Royal Caribbean Cruises, Norwegian Cruise Line Holdings and MSC Cruises – were struck by outbreaks, as well as several smaller lines.

At least 922 of those infected and 11 who died were crew members working on the ships.

The stark findings, collated into a study by the Miami Herald using data from the CDC, cruise companies and passenger testimonies, show that the situation on board ships was far worse than official figures revealed.