Returning cruisers spending lots of money onboard ships

2021-08-09

Royal Caribbean Group and Norwegian Cruise Line Holdings each expect to be cash-flow positive within six months, and said that high onboard spending is a reason why.

Royal Caribbean Group CFO Jason Liberty said there has been “record onboard revenue for the ships that have resumed service.”

“This is very encouraging as we are not only seeing pent-up demand for cruises, but we are also seeing pent-up demand for our onboard revenue experiences. Guests are really enjoying our shore excursions, casinos, spas and restaurants after spending a year in isolation,” Liberty said. “We are also seeing an increased demand for our WiFi services as more and more consumers have flexibility to take vacations and work remotely.”

NCLH CEO Frank Del Rio said “onboard revenue was through the roof” on the Norwegian Jade’s sailings in Europe.

“Our onboard revenue significantly exceeded our target, which was focused on 2019 actual results, by over 50%,” he said.

NCLH CFO Mark Kempa said the the Norwegian Jade cruises, even at 60% occupancy, were profitable.

“Those vessels which are operating are cash-flow positive out of the gate. And that’s very, very important. And we’ve seen that with our first two initial voyages that have just been completed by Norwegian Jade. And we expect that to be the case for the coming voyages as well for the rest of the fleet,” he said.

With NCLH expecting about 75% to 80% of its ships to be back in service by year’s end, Kempa anticipates the company will be profitable in early 2022.

“With anything, there is always a little bit of risk out there, but based on our measured plan, we think we have a solid game plan of returning to cash-flow-positive operations. Kempa said.

Liberty also said that after each ship sails a few cruises, the company steadily increases onboard capacity from one month to the next, and that several ships are now sailing with more than 50% load factors.

“We see ourselves being cash-flow positive in about six months,” he said.

Courtesy of Travel Weekly

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