Norwegian Cruise Line Holdings (NCLH) is turning the traditional cruise revenue model of “always sail full” on its head, with CEO Frank Del Rio confirming this week during a quarterly financial update that “we remain steadfast in our strategy and commitment to protect our brands’ positioning and industry-leading pricing”.
The company’s occupancy rate during the three months to 30 June was 65%, significantly down on record pre-pandemic levels when NCLH posted a 107% occupancy.
Del Rio said NCLH overall doesn’t expect to return to sailing with all its cabins filled for another 12 months – in contrast to its rivals Royal Caribbean Group which has forecast triple-digit occupancy by the end of this year, and Carnival Cruise Line which expects to approach 110% during its current quarter.
Del Rio said NCLH was “encouraged by the continued strong consumer demand we are experiencing which is reflected in our record pricing, accelerating booking volumes, especially for 2023 and beyond, and highest ever onboard revenue generation”.
Essentially the insistence on maintaining its pricing position will see less discounting of NCLH brands including Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises, which Del Rio said he and his team “firmly believe is the best way to maximise long-term value for all our stakeholders”.
NCLH forecasted a loss for the current quarter, and revenue of between USD$1.5 billion and USD$1.6 billion for the third quarter. Fuel was one of a number of factors which resulted in a fourfold increase in total cruise operating expenses for this quarter, as well as higher labour costs.
Despite still navigating choppy waters, NCLH said its cumulative booked position for next year was in line with a record 2019. The company is also expected to ride a significant wave of optimistic excitement with the debut of its highly anticipated Norwegian Prima which will carry a large contingent of Aussies (including travelBulletin) on her maiden voyage departing Reykjavik later this month.