Tag Archives: Norwegian Viva

Royal Caribbean and Norwegian: Differing Strategies on Caribbean Cruises

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Royal Caribbean International and Norwegian Cruise Line are taking different business approaches when it comes to Caribbean deployment.

Caribbean itineraries will make up roughly 65 per cent of Royal Caribbean’s deployment this year, compared to approximately 33 per cent for Norwegian Cruise Line, according to the 2023 Cruise Industry News Annual Report.

Next year those numbers should climb for Royal Caribbean, which will put the Icon of the Seas in the year-round Caribbean market, sailing week-long cruises from Miami in January. That will be followed by the Utopia of the Seas, which will sail short voyages year-round from Port Canaveral, with the Miami-based cruise line betting big on the Caribbean cruise market, including the short cruise business.

“Utopia will be the first Oasis-class ship that will be entirely focused on short cruises in the Caribbean, supporting our strategy of competing with land-based vacation alternatives and driving new-to-cruise customers into our vacation ecosystem as we seek to close the value gap,” said Jason Liberty, president and CEO of Royal Caribbean Group, on the company’s second-quarter earnings call in July.

Norwegian Cruise Line has taken the opposite approach.

Norwegian’s short cruise portfolio, which account for 25 per cent of its deployment in 2019, will make up just seven per cent of cruises in 2023, according to the company’s second-quarter earnings presentation.

It also means Caribbean deployment is down some nine per cent this year when compared to 2023.

“We strategically shifted our deployment to longer, more immersive itineraries at the Norwegian Cruise Line brand and increased our concentration of premium destinations while reducing our Caribbean deployment,” said Harry Sommer, president and CEO of Norwegian Cruise Line Holdings, speaking on the company’s second-quarter earnings call.

“This was designed to attract a higher quality guest and maximize our competitive position.”

CFO Mark Kempa noted: “This is really about yield and EBITDA where we believe being in more premium itineraries that are booked further in advance, giving us a much longer booking curve and a more stable and predictable demand profile, which allows us to manage demand, manage our marketing a little bit more effectively and not rely so much on close-in, unstable and unpredictable demand is really key to our success.”

NCLH Records Record-Breaking Wave Season

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Norwegian Cruise Line Holdings (NCLH) has entered 2023 with a record-booked position at a higher price, with each of its three brands experiencing “record-breaking” wave periods.

The Norwegian Cruise Line (NCL), Oceania Cruise and Regent Seven Seas Cruises parent has seen “very strong” demand so far in 2023, according to a recent trading update covering the fourth quarter and full year to 31 December 2022. 

The company entered the year with a cumulative booked position of approximately 62% for 2023, in line with previously outlined expectations and within the firm’s optimal 60% to 65% range, and at higher prices than 2019 at a similar point in time.

Booking volumes have accelerated in recent months buoyed by strong wave season demand, NCLH said, with its brands achieving several booking records in recent months.

As a result, the full-year 2023 cumulative booked position is ahead of 2019 levels inclusive of the company’s 19% increase in capacity.

NCLH expects this positive momentum to continue throughout the year, with occupancy expected to average 100% for the first quarter and is on track to reach “historical levels” for the second quarter.

As of 31 December 2022, the company’s advance ticket sales balance, including the long-term portion, was $2.7 billion, approximately 9% higher than the prior quarter and approximately 30% greater than at year-end 2019.

NCLH Announces $500 Million Note Offering

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Norwegian Cruise Line Holdings announced today that it is proposing to sell $500.0 million aggregate principal amount of its senior secured notes due 2028 in a private offering.

The Notes and the related guarantees will be secured by first-priority interests in, among other things and subject to certain agreed security principles, thirteen of the company’s vessels that also secure its senior secured credit facility.

The company said the Notes will be guaranteed by subsidiaries that own the vessels that will secure the Notes.

“We intend to use the net proceeds from the Notes Offering to repay a portion of the term loans outstanding under our senior secured credit facility that will become due in January 2024, including to pay any accrued and unpaid interest thereon, as well as related premiums, fees and expenses,” the company said in a filing.