by Mia Taylor
Last updated: 3:35 PM ET, Wed April 30, 2025
Joining a growing number of travel brands, Norwegian Cruise Line has announced first-quarter profit and revenues that missed estimates and is warning of weakened consumer spending amid a declining economy.
The news triggered a 9 percent drop in share prices for the cruise operator, according to Reuters.
Norwegian predicts that its annual 'net yield,' which is the profit the company makes per passenger after costs, will be lower than expected. Bookings will likely also be soft due to uncertainty among consumers.
"We are seeing consumers just get a little bit tighter in terms of their willingness to take a longer haul vacation, i.e Europe at this stage versus closer to home where we're seeing continued strong demand," CFO Mark Kempa said, according to Reuters.
Consumer sentiment has been declining for four months, indicating continued concerns about the economy. This has led Americans to hold back on big-ticket vacations.
Several major airlines in the United States have already reduced their first-quarter financial forecasts amid a slowing economy and weakening travel demand.
In March, American Airlines reported a 7 percent decline in its first-quarter profit forecast. Similarly, Delta's dropped 11 percent, Southwest's fell by 3 percent and United's is down 8 percent.
The airline industry's forecasted decline is based on a variety of concerns, including U.S. President Donald Trump's tariffs and the possibility of a recession.
This is a change from just a few months ago when many airlines were bullish about their prospects in 2025. Delta, for instance, had projected that 2025 would be the most profitable year in the company's 100-year history following higher-than-expected fourth-quarter profits.
More recently however, Delta's CEO has criticized the Trump Administration's trade war, saying it is the wrong approach.
"With broad economic uncertainty around global trade, growth has largely stalled," CEO Ed Bastian said in early April. "In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures."
Meanwhile, Norwegian has also been working on cost-savings measures, per Reuters. That effort includes streamlining its supply chain. The cruise line has maintained its annual profit forecast at $2.05 per share despite softening bookings.
"Norwegian Cruise Line itineraries skew toward luxury, so the softening could suggest less spending among higher income consumers, contrary to what we heard from other travel and leisure peers," CFRA Research analyst Alex Fasciano told Reuters.
Other cruise lines are still reporting substantial profits for 2025. Royal Caribbean, for instance, has raised its annual profit forecast amid very strong bookings.
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