Norwegian Cruise Line Releases Update on Operations and Revenue

Norwegian Cruise Line Holdings (NCLH) releases a major business update on operations across its brands and revenue.

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Norwegian Cruise Line Holdings (NCLH) released its second-quarter results today, August 9, which showed positive improvements over the company’s results in previous quarters. However, the company still posted a loss of $509.3 million. 

Banking on improved occupancy rates and easing the health and safety protocols relating to COVID-19, Norwegian Cruise Line Holdings is optimistic it will be turning the losses around in the near future. The company has already posted a positive cash flow since March this year and expects to post record numbers in 2023. 

NCLH Looks back At Positive Developments In Second Quarter

Despite posting a loss of $509.3 million in the second quarter, Norwegian Cruise Line Holdings can look back at many positive improvements the company achieved in the second quarter of 2023.

The company became the first major cruise operator to be fully operational with all of its ships this year, with vessels operating at 65% occupancy, in line with previously outlined expectations. Those numbers have since been steadily improving, with several ships sailing at 100% occupancy rates and the fleet averaging 85% in July. 

Positive news comes from all the fleet brands, including Norwegian Cruise Line, ultra-luxury operator Regent Seven Seas Cruises, and Oceania Cruises. 

Norwegian Cruise Line has taken delivery of Norwegian Prima, the first of six ships in the Prima-class, and celebrated the float out of Norwegian Viva at the Fincantieri shipyard in Italy on July 29, 2022.

Norwegian Cruise Line Office
Photo Credit: JHVEPhoto / Shutterstock

Regent Seven Seas confirmed that it has some of the most brand-dedicated guests in the industry. For the fourth year running, it sold out its world cruise in record time, with the 2025 sailing being completely reserved before officially opening for bookings on June 15, 2022. 

At the same time, the Oceania Cruises’ 2024 voyage collection launch on May 4 was among the best single-day booking days in the line’s history. 

Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd: “As the leading operator in upscale cruising, our three award-winning brands are particularly well-positioned to capitalize on our target consumers’ continued desire for travel and experiences led by our unique and compelling value propositions versus land-based vacation alternatives. Our world-class fleet has been further enhanced by the recent addition of Norwegian Prima, the first of six ships in the ground-breaking Prima Class for Norwegian Cruise Line.”

Having all ships operational, and with the addition of Norwegian Prima, means the company is very well positioned for the second half of 2022 and a possible record-breaking 2023. 

Bookings & Revenue At All-Time High

For the second half of 2022 and into 2023, Norwegian Cruise Line Holdings is making a serious impact. Bookings for the remainder of 2022 are slightly below the same period in 2019 but at much higher pricing, despite FCC’s (Future Cruise Credits) diluting the results. 

For 2023, the current booking trends show comparative numbers to 2019, but at higher pricing and 75% of the FCC balance already allocated. With the increased capacity, Norwegian Cruise Line expects 2023 to be a record-breaking year, bringing back some of the revenue lost during the pandemic.

Norwegian Cruise Line Ships
Photo Credit: Songquan Deng / Shutterstock

“We are 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.” said Del Rio .

Onboard revenue such as beverage, tours, onboard shopping, casino revenue, and specialty dining has seen record numbers, with total revenue per Passenger Cruise Day up nearly 20% in the second quarter of 2022 versus 2019.

It has brought the company to the point where it has turned Cash-flow positive at approximately $260 million for the second quarter.

New Health and Safety Protocols

A significant factor in the increase in bookings will come from the new health and safety protocols Norwegian Cruise Line Holdings released yesterday, August 8. The new protocols are much less stringent than other cruise companies and will go into effect on September 3.

Vaccinated guests aged 12 and over will no longer have any pre-cruise-related protocols. Guests will not be required to show a negative test result anymore.

Norwegian Cruise Line Ship
Photo Credit: Mia2you / Shutterstock

Any unvaccinated guests can now sail if they show a negative COVID-19 test taken within 72 hours before departure. Guests aged 11 and under will be exempt from all vaccination and testing requirements. 

Norwegian Cruise Line Holdings was the first cruise company to make vaccinations mandatory last year and is now also the first large cruise company to relax protocols to enable everyone to sail. 

What Does The Financial Future Look Like For NCLH?

Despite the positive developments that NCLH has shown over the last months, the company is not out of trouble yet. 

The current problems in Europe, significantly impacting the ever-important fuel market, record-high inflation numbers worldwide, a volatile currency exchange market, and the lingering effects of COVID-19, create a very uncertain future.

Read Also: Norwegian Cruise Ships – Newest to Oldest

Norwegian Cruise Line Holdings will probably be posting a loss for the third quarter of 2022. However, as soon as the company can bring occupancy levels to 100% fleetwide and macroeconomic conditions worldwide improve, it seems inevitable that Norwegian Cruise Line Holdings will be back stronger than ever in 2023. 

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