Norwegian Cruise Line bookings up 40% since start of 2021

Cruise operators are still waiting on approval to return to the seas and scaling up operations could take several more months

Tourists in a vintage car as they pass by the Norwegian Sky cruise ship, operated by Norwegian Cruise Lines in Havana in May 2019, before the Covid-19 outbreak. Reuters

Norwegian Cruise Line Holdings said bookings have jumped about 40 per cent in the first two months of the year, but that a restart for the beleaguered industry remains months away.

More than 80 per cent of the reservations were new, cash bookings, the company said on Thursday. However, regulatory clearance for the industry to resume operations, which shut down almost a year ago due to Covid-19, still isn’t in sight, and Norwegian indicated it would like up to three months to prepare for cruising again.

Norwegian is the second operator to report signs of pent-up demand for holidays, following similar comments on February 22 by Royal Caribbean Cruises. All of the cruise companies, including market leader Carnival Corporation, are awaiting approval to resume sailing from the US by the Centres for Disease Control and Prevention.

“This remains the biggest unknown/overhang,” Steven Wieczynski, an analyst with Stifel Nicolaus & Company said in a note.

Shares of Norwegian fell as much as 7.1 per cent to $29.05 in New York on Thursday. Carnival and Royal Caribbean, the second-biggest operator, were also lower. Norwegian shares were up 23 per cent this year at the market's close on Wednesday.

“The company is experiencing robust future demand across all brands with the overall cumulative booked position for the first half of 2022 significantly ahead of 2019’s record levels,” Norwegian said. Excluding future cruise credits, prices were in line with historical levels.

The robust comparisons may reflect particularly weak November and December bookings, given the surge in Covid-19 cases in the US during those months. The industry has been virtually shut down by the global pandemic, with the vast majority of sailings suspended since mid-March 2020.

Norwegian, and others, have cancelled cruises through to the end of May, and it appears the industry’s suspension may last even longer. Sailings to Alaska, a big summer market for the industry, are also suspended.

Speaking on a call with investors, chief executive Frank Del Rio said Norwegian would like about 90 days to prepare to sail again once it gets the green light from the CDC, the gatekeeper for the industry’s return.

It’s possible the agency may soon have guidance on the “next phase” of the path to returning to the seas, he said, adding he doesn’t believe the CDC is close to giving full approval.