Norwegian Cruise Bookings Jump, But Restart Remains Months Off

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

More than 80% of the reservations were new, cash bookings, the company said 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 vacations, following similar comments on Feb. 22 by Royal Caribbean Cruises Ltd. All of the cruise companies, including No. 1 Carnival Corp., are awaiting approval to resume sailing from the Centers for Disease Control and Prevention.

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

Shares of Norwegian fell as much as 7.1% to $29.05 in New York. Carnival and Royal Caribbean, the No. 2 operator, were also lower. Norwegian was up 23% this year through 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 U.S. during those months. The industry has been virtually shut down by the global pandemic, with the vast majority of sailings suspended since mid-March 2021.

Through May

Norwegian, and others, have canceled cruises through 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 the call with investors, Chief Executive Officer Frank Del Rio said Norwegian would like about 90 days to prepare to sail again once it gets a 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 the full green light.

©2021 Bloomberg L.P.

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