by Lacey Pfalz
Last updated: 10:05 AM ET, Wed November 1, 2023
Norwegian Cruise Line Holdings, Ltd. reported the highest total revenue earned for the company ever during the third quarter of 2023, a sign that cruising’s higher prices, popular demand and the corporation’s cost-cutting methods are paying off.
“We achieved strong third quarter results, meeting or beating guidance on all key metrics, driven not only by healthy demand from our target upmarket consumer, but also as our ongoing margin enhancement initiative, including relentless efforts to rightsize our cost base, continues to bear fruit,” said Harry Sommer, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.
“Looking ahead, while we are prudently moderating short term expectations and keeping a close eye on rapidly evolving global macroeconomic and geopolitical events, we remain encouraged by our strong forward booked position and robust pricing and are focused on sustaining this momentum as we close out 2023,” continued Sommer.
Third Quarter Outlook
The cruise giant, which owns Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises, reported a total revenue of $2.5 billion, a record 33 percent higher than the third quarter of 2019. GAAP net income was $345.9 million, while Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was $752 million.
The earnings are in part due to higher cruise costs and bookings, as well as occupancy rates that exceed 100 percent. Occupancy was 106 percent for the third quarter, while total revenue per Passenger Cruise Day, a key metric in the industry, increased 16 percent from the pre-pandemic average.
As of September 30, 2023, the corporation’s advance ticket sales balance was $3.1 billion, which is around 56 percent higher than it was back in the same period of 2019.
During the third quarter, global events impacted operations in Hawaii and in the Middle East. Inter-island Hawaii itineraries were adapted to avoid Maui in August, but restarted again in September following the guidance of the Governor of Hawaii and the Hawaii Tourism Authority, though bookings slowed for the fourth quarter of 2023 and has since stabilized.
NCLH’s cruise lines have also canceled and adapted all calls to Israel and surrounding destinations for the rest of 2023. The cruise lines are also canceling all stops to Israel in 2024. Around 7 percent of the cruises during the fourth quarter of 2023 visited the Middle East, while that number is around 4 percent for all of 2024.
Partnerships & Giving Back
NCLH has partnered with the Global Maritime Forum, a global non-profit that focuses on increasing sustainable long-term development and human wellbeing. NCLH also joined it's Getting to Zero Coalition, which goes hand-in-hand with NCLH’s sustainability goals.
The cruise corporation also donated $50,000 to Maui United Way following the wildfires.
The End of the Year Outlook
The fourth quarter continues looking bright for NCLH, though the corporation expects Net Per Diem and Net Yield growth to be below previous expectations due to recent global events and a less pronounced desire for last-minute long cruise bookings.
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