Norwegian Cruise Line Continues Strong Run With Record Bookings

Harry Sommer, the current CEO at Norwegian Cruise Line Holdings, is doing a great job bringing the cruise giant back to profitability. The third biggest cruise operator in the United States recorded a better-than-expected first quarter of 2024, with record bookings, a strong occupancy level of its vessels at 104.6%, and revenue up 20% compared to the same period last year.

It’s a strong start for Norwegian Cruise Line Holdings, which has consistently been beating the odds over the last couple of quarters. 

The numbers show an increased demand for cruise ships such as Norwegian Prima and Norwegian Viva, and interest in the first in the Prima Plus-class, Norwegian Aqua, while brands such as Regent Seven Seas and Oceania Cruises are equally performing strongly.

Harry Sommer, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.: “We kicked off 2024 with impressive momentum, with record bookings in the first quarter propelling us to continue our all-time high booked position and an unprecedented level of advance ticket sales. These achievements demonstrate the continued growing demand we are experiencing for our product and offerings.”

While the numbers are a definite improvement over the numbers seen in 2023, the fact that NCLH missed the projected revenue of $2.24 billion, and recorded just shy of that at $2.19 billion, has put a light damper on the company. NCLH’s stock price dropped 12% after the first quarter results were released.

The fact that Royal Caribbean Group, in particular, has been performing extraordinarily well in recent months is putting increased pressure on NCLH and Carnival Corporation to follow suit, something that both have been unable to do so far. 

“The challenge for NCLH shares this year and likely today as well is that RCL has set a very high bar with several massive beat & raises this year,” said Truist Securities analyst Patrick Scholes to Barron’s.

The good thing for NCLH is that the stock price does not reflect where the company is going. The Company’s booking balance ended the first quarter of 2024 at a record high of $3.8 billion, 13% higher than the same period of 2023.

The record-breaking WAVE season has shown that the company’s ships are well-positioned to profit from this demand, especially with multiple new cruise ships on the horizon.

25,000 Additional Berths Across NCLH’s Fleet

On April 8, 2024, Norwegian Cruise Line Holdings announced a massive increase in capacity, that will see the company introduce eight new ships across its brands—Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises—adding nearly 25,000 berths to the fleet from 2026 to 2036, and a new pier at Great Stirrup Cay.

“Recently, we announced the most comprehensive newbuild program in our Company’s history- eight state-of-the-art vessels, each a new class for our three award-winning brands as well as the construction of a new pier at Great Stirrup Cay,” said Harry Sommer in Q1 results. 

“By enhancing our capacity and elevating our product to create the best, largest, and most efficient vessels in our fleet, we are honoring our 57-year history of innovation that has always driven our growth and continues to be at the forefront of what we do,” the CEO continued.

The company will launch four large ships for Norwegian Cruise Line, each with a capacity of nearly 5,000 passengers and scheduled for delivery in 2030, 2032, 2034, and 2036. 

Oceania Cruises will add two ships with a capacity of 1,450 passengers each, expected in 2027 and 2029. Regent Seven Seas Cruises is set to receive two ships in 2026 and 2029, each designed to accommodate 850 passengers.

The new $150 million pier at Great Stirrup Cay is planned to accommodate two large vessels simultaneously. Construction of the pier is set to begin in summer 2024 and is expected to be completed by late 2025.

With demand high, the fact that NLCH is pushing for such a big increase in capacity is logical, as it needs to capitalize on this demand, even though the stock price doesn’t necessarily show confidence from investors. 

Keep in mind that daily stock price swings don’t always align with how the ships are performing, which, according to the data, remains strong.