Norwegian Cruise Line Holdings Ltd. (NCLH) said that cruise demand is strong, particularly for 2021, despite significantly reduced marketing efforts and not having to heavily discount.
During a call to discuss its second quarter earnings, for which NCLH reported an expected loss of $666.4 million, the company said that approximately 70% to 75% of its 2021 bookings are new as opposed to future cruise credits. And although booking volumes remain below historical levels, NCLH's said its 2021 booked position and pricing are both within historical ranges.
The line reported that as of Aug. 3, approximately 60% of guests on all canceled voyages have requested a cash refund, an increase from the slightly more than half that had requested cash refunds as of May 15. However, that number dips back to 40% when looking at guests on canceled cruises between Aug 1 and Sept. 30.
CEO Frank Del Rio reiterated his commitment to not heavily discount cruises and praised the industry at large for doing the same.
Frank Del Rio
"I'm happy to see the discipline the industry has shown across the board," he said. "We don't like discounting, and for the most part we have not discounted. On the pricing side, we're holding our own very well."
NCLH said that about 60% of its 2021 bookings are from repeat cruisers. Given the limited marketing and the industry suspension, Del Rio said he is "astonished at how well bookings are coming. We enjoy a loyal customer base."
He also said that despite everything that is going on, the company has not seen any major shift in itinerary demand and that the NCLH brands have not had to make changes to their itineraries because they are not seeing any preference for close-to-home itineraries or any avoidance of far-flung destinations.
When asked whether NCLH, which has one of the youngest fleets in the industry, would follow its competitors and shed any of its older ships, Del Rio said "absolutely not," and pointed out that its oldest vessel, the 22-year-old Norwegian Spirit, just underwent a $150 million upgrade prior to the pandemic.
"We love our capacity," Del Rio said, adding that NCLH also has the smallest fleet of the four largest cruise lines, which during the pandemic has been a positive. He said the company has no plans to cancel any of the nine ships its three brands have on order.