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Published in: Cruise News



A robust macroeconomic environment that shows no sign of weakening is driving earnings performance for Norwegian Cruise Line Holdings, according to President and CEO Frank Del Rio.

He said 2019 bookings had recently accelerated at higher prices. As of June 30, advanced ticket sales were up 26 percent, Del Rio said, with capacity growth up 9 percent, setting up what could be a positive financial performance.

Del Rio was speaking on the company’s Thursday morning second quarter earnings call, where the news was good as Norwegian exceeded earnings expectations and increased its full year adjusted EPS guidance.

Total revenue increased to $1.52 billion from $1.34 billion the prior year, with gains in both ticket price and onboard revenue.

Net income was also well up, reported at $226.7 million compared to $198.5 million last year.

Fuel cost was up, but the company saw reduced fuel consumption thanks to better performance than expected from new ships and energy savings initiatives.

With the Bliss sailing from Seattle for her inaugural season, Del Rio said the ship was breaking onboard revenue records “sailing after sailing.”

The company’s Alaska capacity is up 15 percent this summer, Del Rio said, with ticket pricing up 25 percent.

A positive economic environment in North America is leading to a wealth effect, he said, helping drive bookings, the booking window and onboard spend.

A “strategic shift in deployment” that is taking the Norwegian Joy away from the Chinese market has led to a domino effect in ship deployment that will drive earnings, putting assets in underserved markets.

The Joy will move into Alaska, a mature market, with Del Rio adding that the company has “time and time again” proved it has been able to add capacity and drive growth in net yields.

For the winter season, the Joy will move to Los Angeles, offering Mexican Riviera and Panama Canal sailings, a market Del Rio said was underserved.

As for the industry’s supply growth, Del Rio pointed to Norwegian’s acquisition of Prestige, where the company absorbed outside supply while growing net yield.



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