Norwegian Cruise Line Holdings Limited is riding high from 2017 with all three of its brands-Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises-demonstrating record financial levels.
Following the release of its monetary results for the last fourth quarter and full year, the company held a conference call discussing the outlook, which continues to look promising. Frank Del Rio, Norwegian's president and chief executive officer, cited recent tax relief as a likely contributing factor towards increased discretionary spending.
He points to pricing power as the single most important ingredient of future success. "All three of our brands [are] showing meaningful year-over-year pricing gain throughout 2018," he explained. "And while still very early in the booking cycle, initial indications are that this early booking environment has a long tail as we are already seeing gains in both load factor and pricing into 2019."
Two examples of such an optimal booking curve, according to Del Rio, are 2017's 11 percent year-over-year increase in advance ticket sales and the Norwegian Cruise Line brand's updated final payment policy, requiring it be made 120 days prior to sailing instead of the traditional 90.
"For our travel agent partners, the change reinforces our strategy to make the Norwegian brand their preferred brand to sell by accelerating payment of their hard-earned commission a full 30 days earlier, significantly improving their cash flow," he added.
Following the seminal launch of the company's largest-ever Norwegian Joy and most luxurious Seven Seas Explorer, it next looks to bring seven additional new-builds online through 2025. For Norwegian Cruise Line that includes Norwegian Bliss-the company's best-booked new ship-coming in 2018, sister-ship Norwegian Encore in 2019 and four Project Leonardo ships beyond. For Regent Seven Seas Cruises that means Seven Seas Splendor in 2020.
The company is also optimistic of more source markets such as the United Kingdom, Germany, Australia and additional Asian areas. Speaking of other unserved or underserved markets, Del Rio mentioned considering those locally as well:
"We don't have a presence in the Mid-Atlantic states. We're not in Baltimore. We're not in Charleston. We don't have a presence at all in the world's second-largest port, which is Fort Lauderdale. We don't have a presence in the Gulf States of Texas or Alabama. We don't have a year-round presence in Tampa or in New Orleans or in Los Angeles. We only have three ships in Alaska, which is a very high-yielding market. Some of our competitors have up to eight vessels."
In other words, the future of Norwegian looks bright, and the potential playing field where it might deploy its upcoming ships is vast.
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