Norwegian Cruise Line Holdings has released a major business update, including the latest status on its resumption of cruise operations, bookings, and an outlook on its performance in the coming months. Despite concerns from the Omicron variant toward the end of 2021 and early 2022, the company expects its full fleet back sailing in the spring.
Resuming Operations
Norwegian Cruise Line Holdings – which includes Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises – began a phased restart of operations in the third quarter of 2021. The first ship to restart was Norwegian Jade, which set sail from Athens, Greece, on July 25, 2021.
For Oceania Cruises, the first ship to resume sailings was Marina, which restarted from Copenhagen in late August, followed by Regent Seven Seas Cruises with Seven Seas Splendor from Southampton in mid-September.
All ships initially restarted with reduced capacity, and by the end of the third quarter, were operating with approximately 40% of berth capacity.
In December 2021, the spread of the highly transmissible Omicron variant caused several operational challenges and disruptions, including new travel restrictions and increased protocols in ports of call limiting port availability. This led to the abrupt cancellation of certain voyages in the fourth quarter of 2021 and first quarter of 2022, and the postponement of the restart of certain vessels.
According to today’s press release, the current status of Norwegian Cruise Line Holdings – all three cruise lines combined – is that “16 of our 28 ships, or 70% of our berth capacity, are operating with guests on board.”
The statement continues with the optimistic projections that “we expect to have approximately 85% of berth capacity operating by the end of the first quarter of 2022 with the full fleet expected to be back in operation during the early part of the second quarter of 2022.”
Health and Safety Protocols
Throughout the restart, all three cruise lines have followed established health and safety protocols including vaccination requirements, pre-cruise testing, and enhanced sanitation onboard. Protocols have been adjusted as necessary, including the implementation of mask-wearing on Norwegian Cruise Line in mid-December as the Omicron variant became prevalent.
On January 14, 2022, the company announced that its three brands had opted into the U.S. Centers for Disease Control and Prevention’s COVID-19 Program, the voluntary COVID-19 risk mitigation program.
This program was announced in connection with the expiration of the CDC’s Conditional Sailing Order on January 15, 2022. Norwegian Cruise Line Holdings was the first company to commit to following the voluntary guidelines.
The company is continuing to monitor health and safety recommendations and will adapt its SailSAFE policies as necessary to provide the best protection for all passengers and crew members.
As an example, Norwegian Cruise Line also announced today that its mask-wearing requirement will become recommended rather than required for all cruises embarking on or after March 1, 2022 from U.S. ports. This adjustment only applies to Norwegian Cruise Line, not the corporation’s other cruise lines.
Booking Improvements But Financial Uncertainty
The press release details that overall, bookings have fluctuated throughout the last quarter of 2021 and early 2022, showing negative impacts from both the Delta and Omicron variants of COVID-19. In recent weeks however, “net booking volumes have continued to improve sequentially.“
While booking and pricing remain lower than previous levels in the short term, looking ahead shows positive trends and continued strong demands for sailings.
The company has also taken “proactive measures to enhance liquidity and financial flexibility in the current environment.” This includes improving liquidity for the company and changes to exchangeable notes for shareholders.
Despite the improvement in recent bookings, the overall financial outlook is still uncertain as the effects of the pandemic and the industry-wide shutdown continue to be felt. The press release states:
“While we cannot estimate the impact of the COVID-19 pandemic on our business, financial condition or near- or longer-term financial or operational results with certainty, we will report a net loss for the fourth quarter and full year ending December 31, 2021 and expect to report a net loss until we are able to resume regular voyages.”
The second half of 2022 is already showing stronger financial returns, and is expected to remain positive. It is important to note, however, that the situation remains fluid and further operational adjustments could have dramatic impacts that are impossible to predict, both on the company’s procedures as well as its financial outlook.
