Norwegian CEO Del Rio enthused about return to Turkey

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The Istanbul skyline highlighted by the Blue Mosque.

Norwegian Cruise Line Holdings CEO Frank Del Rio said the company's decision to return to the Eastern Mediterranean in 2019 is working out so far.

After pulling out of the region in 2016 because of terrorism fears and political instability in Turkey, NCLH has scheduled 12 sailings this year, and has an additional 20 on the calendar for 2020.

"All 12 sailings in 2019 are better loaded and at higher pricing than the surrounding sailings that do not include Turkey," Del Rio said.

He told investors on a conference call to discuss fourth quarter and 2018 earnings that Turkey is the key to the itinerary. 

"The fact that the North American consumer, who is the one booking most of these Eastern Mediterranean cruises, seem to want to come back to the eastern Med and is willing to pay a premium price bodes very well for 2020," Del Rio said.

The risk is that itineraries must be developed and sold 18 to 24 months in advance of sailing, he continued. 

"So you test the waters, you see what happens, and it takes you a while to really ramp up. So at this point, assuming there are no other disruptions -- reasons to not go to the Eastern Med -- I expect that we along with the rest of the industry will probably increase the number of deployments to the Eastern Med beginning in 2020 and even more in 2021."

Del Rio, who has a hand in all itinerary planning at NCLH, said that when the eastern Med is good, "it's as good as any, if not the best, of all itineraries."

On the call, Del Rio said NCLH enters 2019 in the best booked position in its history, giving yield managers more leeway to raise prices. 

"We're pushing prices higher wherever we can," Del Rio said. "While we still have a lot of cabins to fill, the emphasis will be on raising prices -- on all three brands."

In addition to Norwegian Cruise Line, NCLH operates Oceania Cruises and Regent Seven Seas Cruises.

The company had net income of $954.8 million in 2018, up 25.6% from the $759.9 million recorded a year earlier. Revenue rose 13% to $6.1 billion.

Last year, NCLH decided to redeploy the Norwegian Joy from China to Alaska, where it will cruise starting in April alongside sister ship Norwegian Bliss. That will increase NCLH's presence in Alaska to 9% of total capacity, up from 7% last year.

Capacity in the Asia Pacific region will drop to 6% from 12% last year. NCLH will have six ships in Europe this summer and capacity there increases to 23% from 20% last year, while year-round capacity in the Caribbean is pegged at 36%.

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