Cruise lines may counter virus-related losses with incentives

Cruise lines may counter virus-related losses with incentives
Photo Credit: Siberian Art/Shutterstock

Cruise lines facing a global bookings downturn because of the coronavirus Covid-19 outbreak may start offering incentives.

Norwegian Cruise Line Holdings CEO Frank del Rio said during the company’s earnings call Thursday that the outbreak has caused a slowdown in new bookings and increased cancellations across its global fleet.  

“You will see yields decrease and pricing deterioration in the short term,” CEO Frank del Rio said during this week’s earnings call. 

To counter that, he said that the NCLH brands (Norwegian Cruise Line, Oceania and Regent Seven Seas Cruises) will try to stimulate bookings. 

“We can’t stick our head in sands and say we’re not going to respond,” he said. “We’ll compete for that elusive customer. We’ll do it in a way that price is not the main driver. But you will see a combination of pricing action from us but heavily skewed toward the value proposition to lure the customer.” 

Cruise Planners CEO Michelle Fee said there are already many incentives right now for 2020 sailings. 

“However, since the crisis coincides with Wave Season, we normally have many incentives happening anyway,” she said. “We are starting to see some cruise lines offer additional incentives to help spark bookings for the Bahamas, Caribbean, Alaska and Europe.”

Del Rio said that while the bookings impact has been “pretty even across the board,” a deeper dive indicates that American customers are more comfortable booking close-to-home destinations right now, like the Caribbean (in many cases, guests can take a Caribbean cruise by driving to the port) and even Alaska. 

“Exotic and far-flung destinations” are hurting more, he said.


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