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Generally speaking, financial reports are dull unless you happen to be invested in the company being discussed or the kind of person who really, really liked math classes as a kid. But sometimes if you dig deep enough, you’ll walk away with a few insights. As it happens, we read through the transcript of Norwegian Cruise Line’s recent earnings report to see what the company’s president and CEO had to say. Here’s what we thought you’d find to be the most interesting tidbits.
1. Cuba has been good for the company.
“All three of our brands have now sailed to Havana,” reported Del Rio, adding that both the number of passengers and pricing on the trips had been “very encouraging.” And with this being a relatively new market which many people are curious about, there will be more Havana-bound sailings for the company in the years to come. In fact, they currently have 56 planned for 2018.
2. Prices are on the rise.
While circumstances conspired to create a bit of a pricing slump in certain segments last year, that no longer seems to be the case. “We have priced remaining 2017 inventory at higher prices,” the exec reported. “The expectation continues to be that pricing for new bookings for [future] sailings will moderately exceed prior-year levels.” While that’s good news for the company’s bottom lines, it means bargains will likely be tougher for cruisers to find.
3. Norwegian Bliss is selling well.
Although the earnings call was with regards to 2017, it sounded as if 2018 was looking good in certain sectors… especially where the line’s still-under-construction ship is concerned. Of Bliss Del Rio said it was “in a far better booked position” at this point than had been previous Breakaway Class ships at a similar point in their launch.
4. Norwegian Joy is going to try and make new friends.
When the ship’s repositioning journey from Germany to China is completed, she’ll get not one inauguration but several as she does a series of one-day stops in Qingdao, Shenzhen and Hong Kong designed to introduce her to potential passengers and travel partners. She’ll also do a “VIP partner cruise with major travel agents” from her homeport of Shanghai. Her official christening will take place on June 27, led by her Godfather, Wang Leehom. And while that name may mean nothing to you, trust us… the king of Chinese pop is very well known in Joy’s new homeland!
5. Their deal with Alibaba is a game changer.
Last month, Norwegian revealed that they had formed a partnership with the Alibaba Group. If you’re unfamiliar with the name, think of it as the Chinese market’s version of Amazon. “The partnership kicked off last week with a sweepstake where lucky Alibaba customers won a special four-day preview cruise roundtrip from Shanghai on board Norwegian Joy,” shared Del Rio. “The amount of coverage and awareness that [the ship] received as a result of this campaign and new partnership was impressive.” And this will partnership will no doubt continue to help Norwegian become a major player in China, a market they are only now attempting to penetrate. “Unless you know it well, there is nothing in the U.S. that compares to it,” Del Rio said of Alibaba. “I’m told that Amazon controls 14% of the United States e-commerce. Alibaba controls 83% of China’s e-commerce.”
Translation: That’s a lot of potential passengers.
6. South Korea is a pain in the butt.
If there’s one fly in the ointment where the Chinese market is concerned, it’s South Korea. “Up through early March we were very pleased with the pace,” said the executive of sales in China. “Since then, the South Korean travel restriction has caused disruption in the cruise sector, resulting in the rearranging of itineraries throughout the industry for voyages departing from Mainland China.” While North American passengers tend to book their cruises pretty well in advance, the typical Chinese passenger often makes their vacation plans at what might be considered the last minute. As a result, it’s difficult for Norwegian to get a true read on how well the ship will do once it settles in.
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