Norwegian Cruise Lines Zeroes in on Alaska with Joy Move

Norwegian’s decision to move Joy from China to Alaska came down to the cruise line wanting to “capitalize on the demand for cruises in the region,” Norwegian Cruise Line Holdings (NCLH) President and CEO Frank Del Rio said during the company’s second quarter earnings call this week.

Norwegian initially made waves when it announced last month that Joy, a ship that was originally built specifically for the Chinese market, would be moved to North America.

But, while Del Rio admitted that the ship may have underperformed in China — he told attendees on the conference call that “we are a for-profit organization” and that the decision had to do with the profit contributions of Joy — putting the ship in Alaska was the major motivation.

“We’re putting Joy in Alaska because … [it] is the place where you want to put more capacity,” he said. Alaska, along with the Mediterranean and the Baltic, are all “performing extremely well.”

Joy’s Alaska season will include roundtrip voyages out of Seattle, with sailings that include calls to Juneau, Ketchikan, Skagway, Holkham Bay, and Icy Strait Port.

Joy will join Bliss in Alaska, putting two of Norwegian’s most recent and largest ships side-by-side in the market, giving the cruise line an opportunity to be the highest volume performer in the region. Del Rio also said the company is not afraid of adding significant capacity — Joy sails with a capacity of 3,883 passengers — to a region like this, as the company is proud of its ability “to profitably add new capacity in mature regions.”

After its Alaskan stay, Joy will shift to another region that Del Rio believes is ripe for growth: the Mexican Riviera and the Panama Canal. Joy will be sailing out of Los Angeles, the second largest metropolitan area in the U.S., which is “a market ripe with opportunity.”

Healthy outlook
Overall, according to NCLH’s earnings report, the cruise company experienced a profitable and positive second quarter; it saw year-over-year growth in pricing and load for all of its major destinations.

Oceania and Regent are already 50 percent booked for the year, which is the earliest point that either brand has filled half capacity.

“In the quarter just ended, it was the stellar performance of all three of our brands led by strong yield growth and tight cost controls that drove our record results. These are also the same drivers that extend to our expected full-year performance and the setting up of 2019 to be another record year,” Del Rio said.

Net income for NCLH rose from $198.5 million during the second quarter of 2017 to $226.7 million this year.