Norwegian Cruise Line Holdings Orderbook Update

Norwegian Leonardo Class Rendering
Norwegian Cruise Lines project Leonardo

Norwegian Cruise Line Holdings is introducing ten new ships between 2020 and 2027 for its three cruise brands.

Norwegian Cruise Line is poised to get six Leonardo-class newbuilds with capacity for 3,300 guests each.

Regent just took delivery of the ultra-luxury Seven Seas Splendor, with another 750-guest luxury ship following in 2023.

Oceania, the line’s upper premium brand, has two new ships on order with delivery dates in 2022 and 2025.

The company’s new ship orderbook, spanning ten ships, amounts to just under 24,000 new berths and a value of $7.5 billion, with all ships being built at Fincantieri.

NCLH Orderbook:

Cruise Line Ship Cost1 Tonnage Capacity Yard Sailing Delivery
Regent Splendor $478 54,000 750 Fincantieri World January 2020
Norwegian Unnamed $850 140,000 3,300 Fincantieri TBA TBA 2022
Oceania Unnamed $660 67,000 1,200 Fincantieri TBA TBA 2022
Regent Unnamed $545 54,000 750 Fincantieri World Q4 2023
Norwegian Unnamed $850 140,000 3,300 Fincantieri TBA TBA 2023
Norwegian Unnamed $850 140,000 3,300 Fincantieri TBA TBA 2024
Norwegian Unnamed $850 140,000 3,300 Fincantieri TBA TBA 2025
Oceania Unnamed $660 67,000 1,200 Fincantieri TBA TBA 2025
Norwegian Unnamed $850 140,000 3,300 Fincantieri TBA TBA 2026
Norwegian Unnamed $850 140,000 3,300 Fincantieri TBA TBA 2027

1. In Millions

Norwegian Cruise Line Holdings: Virus depressing bookings globally

The Norwegian Spirit has been moved from Asia to Europe.
The Norwegian Spirit has been moved from Asia to Europe.

The coronavirus Covid-19 outbreak has caused a slowdown in new bookings and increased cancellations worldwide, Norwegian Cruise Line Holdings reported to investors today.

NCLH CEO Frank Del Rio said that the impact of the virus extends beyond Asia, threatening what in early January looked to be the start of a record year for the company.

“The resiliency of our business model will be tested once again by a noncontrollable external factor,” he said. “The effect of the coronavirus outbreak on our business has been swift and severe and the continuous global headline news coverage has been substantial and relentless.”

NCLH said in an earnings release that it has cancelled 40 cruises across its three brands due to the outbreak: 10 on Oceania, six on Regent Seven Seas, and 24 on Norwegian Cruise Line (21 were on the Norwegian Spirit, which was redeployed to the Eastern Mediterranean from Asia earlier this month.

NCLH CFO Mark Kempa called the outright cancellation of cruises on Oceania and Regent Seven Seas “a significant impact for us.”

Image result for regent seven seas asia cruises

“Those are very long lead-booking itineraries with very high per diems,” he said. “Those voyages were completely sold out.”

Despite the Spirit’s extremely condensed booking window, Del Rio said the relocation of the ship provides the best opportunity to maximize its earnings and revenue potential and “demonstrates our nimbleness and ability to redeploy our assets as necessary.”

Looking ahead, Del Rio said that “given the unknown duration and severity of the outbreak, there may additional impacts that are not yet quantifiable. It is affecting the broader consumer demand environment that extends to our global deployment outside of Asia, which cannot be quantified at this time.

“The cruise industry was at the forefront of headline news for reasons that we know and that has caused near panic in the travelling public,” he added. “So, we’ve seen a meaningful decrease in new bookings. A meaningful increase in cancellations. Not just for our Asia sailings but throughout the deployment.”

Del Rio said he’s heard from travel partners and business partners that they are seeing similar trends across their portfolios.

“Business is soft, people are scared to travel,” he said. “Until we see the levelling off of new cases and the cruise industry not being the poster child for the virus, this may continue for some time.”

But he also said that “nothing is permanent.”

“Consumers do have a relatively short memory, thank god. We have seen other major events affecting the cruise industry that were quickly overcome,” Del Rio said.

Silver linings 

Del Rio also pointed to “silver linings,” including what he called the “underlying resilience of our business and potential for a reasonably timed recovery.”

The strong booked position prior to the outbreak, he said, “demonstrates the strong demand fundamentals of our business.”

He also said that in the past five days, NCLH has seen an improvement in week-over-week booking volumes and a decrease in cancellations compared with the prior three weeks.

“I don’t want to call it a turnaround trend just yet, but it is at least one data point of a possible positive change,” he said.

“We are no longer seeing a week-over-week acceleration in the declines in bookings and increases in cancellations. We’re seeing a moderation.”

Del Rio said the bookings decrease is similar to what the company experienced during similar geopolitical events and the financial crisis a decade ago. The difference with this crisis, he said, is the increase in cancellations.

“As an industry and company, we have faced and overcome challenges similar to Covid-19,” Del Rio said.  “I am confident this challenge will not be different. It usually takes eight-plus weeks from the time the news cycle peaks to when we can expect a return to normal booking patterns. It’s not a question of if, but when.”

Fincantieri to build a new ship for Regent Seven Seas Cruises

Fincantieri to build new ship for Regent Seven Seas Cruises
Fincantieri is building a new cruise ship for Regent Seven Seas Cruises

Fincantieri and Norwegian Cruise Line Holdings have signed a contract to construct an ultra-luxury cruise ship for Regent Seven Seas Cruises to be delivered in 2023. The value of the agreement is approximately €474M.

The new vessel will be a sister ship to Seven Seas Explorer, delivered in 2016, and to Seven Seas Splendor, due for delivery in 2020.

Fincantieri said that at 54,000 tonnes, the unit will be able to accommodate up to 750 guests on board and that it will be the brand’s sixth all-suite vessel in Regent’s fleet. Like her sister ships, the new vessel will be built using the latest environmental protection technologies. The interiors will be particularly sophisticated, with every attention paid to passenger comfort.

“We are excited to build on the spectacular success of Seven Seas Explorer and Seven Seas Splendor as we embark on bringing to life a new vessel that will set even higher benchmarks for elegance, luxury and style”, said Norwegian Cruise Line Holdings president and chief executive, Frank Del Rio. “This new ship further strengthens our company’s robust yet measured growth profile with vessels now on order for all three of our award-winning brands, enabling us to expand our presence globally, further diversify our product offerings and continue to drive shareholder returns”.

Fincantieri chief executive Giuseppe Bono said “This agreement is the perfect seal of the work our Group has carried out over the years and the role we have gained on the market. We are able to enter and maintain a reference market presence in every niche, including the most unique and competitive as the ultra-luxury one, in which Regent Seven Seas Cruises operates. Quality is the shipowner’s hallmark and it entrusted Fincantieri once again.”

He said Fincantieri has 10 ships on order for Norwegian Cruise Line Holdings in its orderbook, five of which have been secured in the last five months, for all three brands in its portfolio.