Wednesday, 11 May 2016

NCL reports slump in American demand for European cruises

Photo Taken by Dave Jones
Cruises in Europe are suffering from a slump in demand from American passengers, Norwegian Cruise Line Holdings confirmed today.

The parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises, followed rival Royal Caribbean Cruises in describing the European demand as being ‘soft”.

Neither company gave a reason but security fears following terrorist attacks in Mediterranean destinations such as Turkey, Egypt, Tunisia plus those in Paris and Brussels are seen as the likely cause.

Wendy Beck, executive vice president and chief financial officer of Norwegian Cruise Line Holdings, said: "Continued strong demand in the Caribbean, Alaska, Bermuda, and Hawaii is offsetting softness in Europe which comes mainly as a result of lower demand from North American consumers.

"While this softness is tempering yield growth mainly in the second quarter, strong bookings and pricing in other core markets, as well as the addition of Seven Seas Explorer to our fleet, are contributing to strong yield performance in the back half of the year, keeping us on track to deliver expected earnings growth of approximately 30%.”

The current booked position for 2016 was described as being “on par” with last year record levels and at higher prices.

This came as the company revealed that booking trends for the first half of 2017 remain strong at higher prices.

Small ship Sirena joined the Oceania Cruises' fleet in March, with its first sailing in late April following a multi-million dollar upgrade and refurbishment.

Seven Seas Explorer, the first new build for Regent Seven Seas Cruises in more than 13 years, will join the fleet in the third quarter.

Norwegian Cruise Line Holdings also disclosed the disposal of an interest in an unspecified land-based operation in Hawaii.

The company moved back into the black in the three months to March 31 with net income of $73.2 million compared to a loss of $21.5 million for the same winter period last year.

Total revenue increased 14.9% to $1.1 billion compared to $938.2 million year-on-year.

Adjusted net cruise costs increased 1.5%, primarily due to an increase in marketing expense as well as two scheduled dry-docks in the quarter compared to the prior year which had one dry-dock in the period, according to the company.

President and chief executive, Frank Del Rio, said: "We are pleased to report another quarter of solid financial performance and significant earnings growth driven primarily by strong pricing with robust demand in the Caribbean driving net yield growth above our expectations.

"Our recent announcements regarding our China-dedicated ship, Norwegian Joy, have been extremely well-received in the Chinese market giving us strong momentum prior to the ship's introduction in 2017.”