NCL parent company: Vaccine mandate is a competitive advantage

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T0809NCLESCAPECOUPLE_C_HR [Norwegian Cruise Line]
A couple on the Norwegian Escape. Photo Credit: Norwegian Cruise Line

Norwegian Cruise Line Holdings (NCLH) believes its 100% passenger vaccination mandate gives it a competitive advantage over other cruise lines operating with less stringent measures.

Citing record booking trends on its second-quarter earnings call Friday, the company, which owns the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands, said it was ahead by approximately 10 weeks when compared to where it was in 2018 for 2019 sailings, which was a record year. CEO Frank Del Rio said that consumers want the confidence of knowing that there will only be vaccinated passengers onboard.

"We at [NCLH] came out very, very early and said we're not going to cruise until it's safe to do so, and as a precursor, everybody has to be vaccinated, crew and passengers," he said. "And we haven't moved from that. We think that's a competitive advantage, quite frankly.

"During a pandemic, people who are willing to travel want to travel safely, and the Norwegian Cruise Line platform allows you to do that. It becomes just about the safest place on earth to be, on a Norwegian Cruise Line ship."

The company has sued the state of Florida over its law prohibiting businesses from requiring customers to show proof of vaccination.

Del Rio said he was happy to see that other cruise lines are starting to "follow suit" and introduce some of the measures that NCLH announced early on, like full vaccination and pre-cruise testing even for vaccinated guests.

Norwegian's 'very positive' booking trends

NCLH reported that 2022 booking trends were "very positive, driven by strong pent-up demand."

All brands' cumulative booked position for full year 2022 is meaningfully ahead of 2019's record levels, with pricing higher even including the dilutive impact of future cruise credits, NCLH said.

The company lost $714.7 million during the second quarter but said that advance ticket sales had increased by approximately $300 million, more than 50% higher than during the prior quarter.

Dr. Scott Gottlieb, chairman of NCLH's SailSAFE Global Health and Wellness Council and former commissioner of the Food and Drug Administration, joined the earnings call to offer support for NCLH's restart plan and said that "relative to other kinds of options" in the leisure space, an NCLH cruise is a "a much safer environment, a much more predictable environment."

He cited measures on the ship that control the risk of introduction of the virus and steps to control the risk that if there is a case onboard.

"We've tried to do our best to make it a safe environment to seek treatment, including getting some of the advanced therapeutics onboard the ships, having ICU-level care available, having procedures in place on how to off-board passengers who may become ill during cruise," Gottlieb said.

"So at every step, we've tried to take every reasonable measure to create the safest possible environment for someone to engage in leisure activity."

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