NCLH reports record-breaking advance ticket sales

Norwegian Cruise Line Holdings (NCLH) has reported a net loss of $509.3 million in its latest earnings call despite record-breaking advance ticket sales and onboard revenue increasing by nearly 20% against 2019 across the last three months.

The cruise firm, which owns Norwegian Cruise Line (NCL), Oceania Cruises and Regent Seven Seas Cruises, said as of June 30, the company’s total debt position was $13.2 billion and its liquidity was approximately $2.9 billion.

By June 30 NCLH had generated around $2.5 billion through advance ticket sales – an all-time record high for the company, which revealed that this figure included Future Cruise Credits (FCCs) worth $400m.

Around 75% of outstanding FCCs have been used by customers, NCLH said.

NCLH said booking trends for next year’s departures remain positive and “in line” with a “record 2019” and inclusive of the firm’s 20% spike in ship capacity.

“Pricing continues to be significantly higher than that of 2019 at a similar point in time and thus at record levels for full year 2023,” it said.

NCLH said occupancy in the second quarter was 65% – a 17 percentage-point improvement over the first quarter of 2022.

Occupancy is expected to average in the low 80% range in the third quarter with July sailings averaging around 85%, added NCLH.

During the next quarter, NCLH predicts a “high-single digits” increase in revenue per passenger cruise day versus 2019.

This week, NCLH announced it would drop all pre-cruise Covid-19 requirements for vaccinated passengers from September 3.

Unvaccinated passengers aged 12 and over boarding an NCLH ship still require a negative Covid-19 test taken up to 72 hours before they embark. Guests aged 11 and under will be exempt from all vaccination and testing requirements.

“These protocol revisions are meaningfully positive as it reduces friction, expands the addressable cruise market, brings variety to itineraries and provides additional catalysts on the road to recovery,” NCLH said.

NCLH president Frank Del Rio revealed that Monday’s protocols change announcement brought about one of the company’s top three booking days this year.

He said: “Today (August 9) was also gangbusters compared to a typical Tuesday.”

Del Rio (pictured) said the company was encouraged by strong consumer demand which is “reflected in our record pricing, accelerating booking volumes, especially for 2023 and beyond”.

“Having emerged from the pandemic and returning to more normal operations, we remain steadfast in our strategy and commitment to protect our brands’ positioning and industry-leading pricing, which we firmly believe is the best way to maximise long-term value for all our stakeholders,” said Del Rio.

“As the leading operator in upscale cruising, our three award-winning brands are particularly well-positioned to capitalise on our target consumers’ continued desire for travel and experiences led by our unique and compelling value propositions versus land-based vacation alternatives.”

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