After Attacks, NCL’s Europe Bookings Are Down
by Daniel McCarthyThe Norwegian Jade. Photo:
When Norwegian Cruise Line released its first-quarter financial results this week, it acknowledged that the attacks in Europe have impacted its bookings mainly among just one customer base: North America.
But that’s a big base. North Americans make up two-thirds of Norwegian’s cruisers in the region.
“Given the events that have occurred in Europe over the last four or five months, multiple situations, it affects the North Americans more so than the local markets in Europe,” Norwegian president and CEO Frank Del Rio said on a conference call announcing the results this week.
Del Rio said that while the Baltic has remained “very high-yielding,” the continent’s most popular region, the Mediterranean, has seen the steepest drop.
After the Brussels attacks—and following a pattern that occurs after almost every incident, Del Rio said—customers did not cancel existing bookings, but they did cut back on making new ones. “It takes a little bit of time for the new cycle,” Del Rio said. “So it’s now behind us.”
The lack of demand, coupled with a strong dollar and cheaper air fares, makes this a great time to be selling clients looking for a deal, Del Rio said.
The global outlook
For Norwegian itself, the slowdown in European bookings will not hurt the bottom line in the long term. Norwegian doesn’t “need a major rebound in European business to hit our targets,” Del Rio said. Net income for Q1 2016 is $73.2 million, compared with a net loss of $21.5 million in 2015, and bookings in the Caribbean, Hawaii, Alaska, and North America are “offsetting the softness in Europe,” said CFO Wendy Beck.
Del Rio also said he expecting a boost from the Cuban market; “I am still confident that a Norwegian Cruise Line holding vessel will cruise to Cuba before year-end,” he said.
