Norwegian Cruise Line Holdings Thinks 2023 Could Be a ‘Record Year’

The impact of the pandemic on cruise lines is still far from over, but executives of Norwegian Cruise Line Holdings Ltd. — parent of NCL, Oceania, and Regent Seven Seas — offered a potentially sunny outlook for not just their company, but the industry as a whole.

Norwegian Cruise Line Holdings executives offered a positive outlook for their company… if virus cases stay low.

“I believe that 2023, based on the numbers that I have on the books right now — both load factor and pricing — and further based on the assumption that we will not see another major Delta or Omicron-type surge, 2023 can get the industry and certainly our company back to pre-pandemic levels,” said Norwegian’s CEO Frank Del Rio during a quarterly call with investors.

During the 2021 fiscal year, the cruise company saw a loss of $4.5 billion, including a $1.6 billion loss in the fourth quarter alone. But while the comeback of cruising has been anything but smooth given the massive waves of variants like Omicron, Norwegian is seeing positive signs looking forward.

According to a press release, 2023 bookings and pricing are “meaningfully higher and at record levels” when compared to bookings for 2020 as seen in 2019 (before the pandemic began).

That sets up well for the coming year in cruise travel, and Norwegian thinks it could even be record setting.

“At this stage, and again, not because I think… I’m giving you what the numbers are showing, 2023 could be — assuming that no other major variants arrives on the scene — could be a fabulous year. [It] could be a record year,” Del Rio said.

Furthermore, through the end of 2021 the company carried 230,000 passengers globally. And those guests seem to follow the pattern with other cruise lines in spending much more on the ship. Norwegian said that onboard spending reached all-time highs during the most recent quarter.

Falling Cases Mean Looser Restrictions

Now that cases are moderating on land, the cruise line also sees cases plummeting among guests.

“Last week, we had the lowest number of positive pre-embarkation cases per thousand guests by far since launching service last July during the Delta surge,” Del Rio shared.

The fall in cases on land and at sea has led the cruise line to loosen restrictions on sailings significantly in the coming weeks.

Whereas all guests were required to be vaccinated — no matter their age — before sailing, starting March 1, Norwegian Cruise Line will now start to allow children under 12 to cruise without the shot. (Oceania and Regent Seven Seas will still require everyone to be vaccinated.)

As well, the cruise line is moving from requiring testing at time of boarding to requiring a test to be done by the passenger 48 hours before sailing from a U.S. port. Masks will also no longer be required on its ships.

In other words, while vaccines and testing are still required by the vast majority of passengers, there are signs that cruising is getting closer to “normal.”

To be sure, if there’s anything we’ve seen with this health crisis it is that there is no telling where it might head next. But for now, after roughly two years it seems to be loosening its grip, and the cruise industry looks ready to benefit.

Other Interesting Notes From the Norwegian Investor Call

  • Executives noted they are following the situation in Ukraine with Russia closely. Norwegian says it has no ships in the region until late May and will update guests as needed. Trips to the Baltics and St. Petersburg could be impacted.
  • When ask why they decided to opt-in to the CDC’s new volunteer program, Norwegian’s CEO commented it “wasn’t an easy decision” to join and that he doesn’t need the CDC to tell him “how to operate a safe cruise line,” noting that Norwegian’s protocols exceed the CDC’s. However, he pointed to building consumer confidence and that in the near future he thinks the industry will see a “much more friendly environment” from the CDC.

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