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If you’re hoping for a break on your next Norwegian Cruise Line sailing, you’ll have to work a little harder to find it. During the company’s recent earnings call with Wall Street bankers, the company’s CEO, Frank Del Rio, had very good news for shareholders… but that’s not necessarily great news for bargain hunters.
Cruisers Are Spending More
In his opening remarks to the bankers, Del Rio said the company was coming off what could “only be described as a breakout year in 2018,” with both earnings and revenues at an all-time high. “And while it is still early in the overall booking cycle, the strong demand we are experiencing across all brands and across all markets is also spilling over into 2020, with the company’s three brands now substantially better booked and at higher prices than at this time last year for 2019.”
The three brands he referenced are, of course, Norwegian, Oceania, and Regent Seven Seas, which combined make up the portfolio of Norwegian Cruise Line Holdings.
For our purposes, we’re looking specifically at his comments regarding Norwegian’s fleet.
Read More: Norwegian Prices On The Rise
Ask any high school student, and they’ll be able to explain the basic economic concept of supply and demand. And in that regard, Norwegian seems to be mastering both sides of the equation. “Our Norwegian brand, for example, [essentially] launched three 4,000-passenger vessels — Norwegian Bliss, Joy, and Encore — in a span of just 18 months,” explained Del Rio.
Those ships alone represented nearly a 25 percent increase in capacity for the NCLH fleet. Yet anyone fearing that an influx of new staterooms might overwhelm the market (or hoping that it might lead to a decrease in pricing) would be mistaken.
“Bliss‘ stellar performance to date is well documented,” Del Rio proclaimed, “and Norwegian Encore continues to be the best booked and highest priced Caribbean-introduced ship in the Norwegian brand’s history.” Likewise, the exec said that the newly-repositioned Joy, which will join Bliss in the Alaska market following her massive refurb, was “booking well and at higher prices compared to the smaller vessels she replaced.” And none of this even takes into account onboard spending, which has steadily been on the rise across the industry.
“Consumers Are Willing To Pay For It”
To paraphrase the movie Field Of Dreams, “If you build it, they will sail” seems to be the theory at play… and it’s definitely working for Norwegian. Del Rio emphasized that while the newer builds play an important role in the company’s bottom line, customer expectations must be met across the board, including on the older vessels.
“We just finished [refurbing] Norwegian Sky,” he said. “I just walked through the day after she came out of dry dock, and she literally is as good as new.” Adding that Norwegian Spirit would be their next (and final, for now) focus, he pointed out the importance of maintaining vessels. “That’s something that is core to our strategy of offering consumers the very best product possible,” he said, “and we can see that consumers are willing to pay for it.”
Which brings us back to that initial warning that while you can still probably suss out a good deal if you try, that definitely won’t be as easy as it may once have been. “We’re focusing on price,” Del Rio concluded. “We’re pushing price higher everywhere we can both in 2019 and 2020.”