Norwegian Cruise Line Holdings Maintaining Strong Pricing, Won't Discount to Fill

 Maintaining Strong Pricing, Won't Discount to Fill

Norwegian Cruise Line Holdings won't be discounting ticket prices to chase short-term occupancy levels, said Frank Del Rio, president and CEO of Norwegian Cruise Line Holdings, on the company's second-quarter earnings call.

"We could, like others, chase short-term occupancy and sell cruises for crazy prices, but we don't want to do that. We never have done that. That is not our strategy," he said.

"I remind you what happened back in '08 and '09, when (during) the great recession, certain cruise companies did drop their prices to ridiculous levels. And it took them, in some cases, 10 plus years, and in some cases, they've not yet reached those pre-great recession yields. I'm not willing to mortgage the company for 10-plus years in order to window dress the next quarter or so. I just won't do it. We're here for the long term," he said.

"We're managing the business on a long-term basis. COVID had a major impact. We were shut down for 18 months or so, and the recovery is not instant mashed potatoes. If you want instant mashed potatoes, you got to go elsewhere because we're here for the long run. And our pricing strategy, how disciplined it is, is proof of that.

"We simply don't want to chase short-term occupancy at the expense of long-term pricing. Pricing has a long tail," he added.

Del Rio said the company had 40% more ticket sales on the books right now compared to 2018 despite a 20% increase in capacity.

"And I've been doing this for 30 years. I've managed cruise companies in good times and in bad times, and I am convinced beyond a shadow of a doubt that you don't sacrifice the long-term pricing power of your brand in order to achieve short-term load factor gains," Del Rio continued.