Norwegian Predicts Cruise Surge Once Cleared by CDC

The global pandemic has robbed more than 30 million people of their holiday plans, and millions more are added every month, most of whom live in the country.

For some, this can be a cause for despair. But for Norwegian Cruise Line Holdings CEO Frank Del Rio, it’s a source of hope and excitement as the day of the industry’s relaunch inexorably approaches – albeit at an incredibly slow pace.

Norwegian Holdings Cruise Line Frank Del Rio (Photo courtesy of Norwegian Cruise Line)

There will be tightness here, with demand outstripping capacity, Del Rio told financial analysts during the company’s phone calls for the fourth quarter and full year to 2020.

There is so much pent-up demand. People have money in their pockets. The North American fleet has 20 fewer ships than before the pandemic. The cruise industry is booming, Mr Del Rio said.

READ MORE: The Norwegian Cruise Line is now requiring all crew members to be vaccinated.

As for future bookings, the brand manager for Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises says he has never seen such a positive confluence of circumstances. We just have to get back to work. We have to operate again.

That’s the obstacle, of course. When the U.S. Centers for Disease Control and Prevention (CDC) announced the 30. In October 2020, the cruising ban was repealed and replaced with a conditional cruising ban, as the cruise lines believed that the route to a new start was near. NCLH and others have begun to bring back crews and prepare the ships to welcome guests again.

But the increase in new cases of the virus, combined with new travel restrictions, has slowed progress even as potentially revolutionary vaccines have been developed. As the CDC has taken its time to announce the technical requirements for key aspects of the Conditional Shipping Order, NCLH has now cancelled all sailings for its fleet of 28 vessels, at least until early June.

The company’s private island in the Bahamas, Grand Stirrup Cay (Photo courtesy of Norwegian Cruise Line).

For NCLH, the pain is real. After a record year in 2019, the stage is set for an even more successful year in 2020. As today’s financial results for the full year 2020 show, the opposite has happened.

NCLH reported a net loss of $4.0 billion in 2020, compared to net income of $930.2 million in 2019. Adjusted net loss was $2.2 billion, compared to adjusted net income of $1.1 billion in 2019. Revenue fell 80.2 percent, from $6.5 billion in 2019 to $1.3 billion. Fourth-quarter revenue fell from $1.5 billion in 2019 to a paltry $9.6 million as flights were completely suspended during the quarter.

From the 31st. As of December 2020, NCLH’s total debt was $11.8 billion, while cash and cash equivalents were $3.3 billion. The company has raised nearly $6.5 billion in additional funds since the industry shutdown.

READ MORE: Norwegian Cruise Line expands peace of mind policy

Together with Royal Caribbean, NCLH formed a group of scientists, doctors and cruise line executives to create guidelines for healthy navigation. The group’s report and recommendations are seen as a model for the future, and Dr. Del Rio says the addition of vaccines to the mix makes him very optimistic.

It’s incredible to see how much has happened since our last update (three months ago), he said. Currently, more than six million doses are administered per day worldwide, and this number will only increase as production, distribution and health care systems become more aligned. Looking to the future, we are encouraged by the accelerated introduction of vaccines, advances in herd immunity and strong demand for future cruise vacations.

Mr. Del Rio is encouraged and pleased with the strong bookings for 2022 flights for all three brands. Cruise ship occupancy in 2022 is higher than before the crisis, and prices remain high, he says. As an example, he mentioned the very expensive cruise Oceania 2023 Around the World in 180 days, which was sold out in one day. Mr Del Rio said he was particularly pleased that a third of people who book a biennial cruise are first-time guests on a sailing ship.

I have a lot of concerns these days, but basic consumer demand and our ability to fill our ships at high prices is not one of them, Del Rio added.

Emblem of Oceania in Venice (photo via Wikipedia)

READ MORE: Director of Norwegian Cruise Line: We will take care of it

As for recent discussions that the new CDC management could arrive any day now, which would provide some confidence in the future planning and progress of the relaunch, Del Rio says he’s not holding his breath – but he certainly feels more confident.

I don’t think we expected a green light for the cruise in the next few days. It may take a few days, a few weeks. But we are in a better, more encouraging situation than we were six weeks ago.

According to Del Rio, it will take about 90 days to get each ship ready for departure with passengers, and about six to seven months before the entire fleet is ready to set sail – an average of one week after permission is granted.

2020 was undoubtedly the most difficult year in the history of the company, which has been in existence for more than 50 years, but our team responded to these unprecedented circumstances with swift and decisive action. Our company has once again demonstrated its adaptability and resilience, as evidenced by the unwavering commitment and dedication of our team members around the world, said Mr. Del Rio.

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