Norwegian CEO Del Rio enthused about return to Turkey

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Norwegian Cruise Line Holdings CEO Frank Del Rio said the company’s decision to return to the Eastern Mediterranean in 2019 is working out so far.

After pulling out of the region in 2016 because of terrorism fears and political instability in Turkey, NCLH has scheduled 12 sailings this year and has an additional 20 on the calendar for 2020.

“All 12 sailings in 2019 are better loaded and at higher pricing than the surrounding sailings that do not include Turkey,” Del Rio said.

He told investors on a conference call to discuss fourth quarter and 2018 earnings that Turkey is the key to the itinerary.

“The fact that the North American consumer, who is the one booking most of these Eastern Mediterranean cruises, seem to want to come back to the eastern Med and is willing to pay a premium price bodes very well for 2020,” Del Rio said.

The risk is that itineraries must be developed and sold 18 to 24 months in advance of sailing, he continued.

“So you test the waters, you see what happens, and it takes you a while to really ramp up. So at this point, assuming there are no other disruptions — reasons to not go to the Eastern Med — I expect that we along with the rest of the industry will probably increase the number of deployments to the Eastern Med beginning in 2020 and even more in 2021.”

Del Rio, who has a hand in all itinerary planning at NCLH, said that when the eastern Med is good, “it’s as good as any, if not the best, of all itineraries.”

On the call, Del Rio said NCLH enters 2019 in the best-booked position in its history, giving yield managers more leeway to raise prices.

“We’re pushing prices higher wherever we can,” Del Rio said. “While we still have a lot of cabins to fill, the emphasis will be on raising prices — on all three brands.”

In addition to Norwegian Cruise Line, NCLH operates Oceania Cruises and Regent Seven Seas Cruises.

The company had net income of $954.8 million in 2018, up 25.6% from the $759.9 million recorded a year earlier. Revenue rose 13% to $6.1 billion.

Last year, NCLH decided to redeploy the Norwegian Joy from China to Alaska, where it will cruise starting in April alongside sister ship Norwegian Bliss. That will increase NCLH’s presence in Alaska to 9% of total capacity, up from 7% last year.

Capacity in the Asia Pacific region will drop to 6% from 12% last year. NCLH will have six ships in Europe this summer and capacity there increases to 23% from 20% last year, while year-round capacity in the Caribbean is pegged at 36%.

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Cruise lines ‘to return to Turkey this year’

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A Busy Cruise port in Turkey

Cruise lines plan a return to Turkey this year following a period of uncertainty due to terrorism and political upheaval.

Ports operator Global Ports Holdings today signalled a possible recovery after reporting a 6.3% slump in overall cruise revenue to $50.3 million last year over 2016.

Earnings [Ebitda] from cruise fell by 12.7% to $32.2 million as the company reported an annual loss of $14.1 million from a profit of $4.4 million the previous year.

This came despite the company’s ports outside Turkey, including Barcelona, Malaga and Valletta, recording 2017 passenger growth of almost 26%

The company’s ports handled more than 2,801 cruise ship calls and 4.1 million passengers.

However, cruise calls to Ege port in Kusadasi in Turkey fell by 53% with passenger numbers down by 66% to 118,954 year-on-year. The company also runs the Turkish ports of Bodrum and Antalya.

“Current trading in our cruise segment in our non-Turkish based ports remains strong. The weakness in Turkish cruise ports is expected to continue into 2018, although passengers and revenue are expected to stabilise compared to the decline experienced in 2017,” GPH said.

“A number of cruise lines have begun to communicate their plans to visit our Turkish ports in 2018, which we see as a good sign of a possible recovery.”

The company added: “Transit passengers recorded a 20.3% increase in 2017, while the expansion of more profitable turnaround passengers was relatively lower at 8%, resulting in two percentage point decrease in the share of turnaround passengers.”

Chairman and co-founder Mehmet Kutman said: “In May 2017 we listed on the London Stock Exchange. Despite the geopolitical challenges in Turkey since then, we have been able to deliver stable revenues and underlying profits, achieve strong operating cash flow and attractive dividends.

“Operating profit was down year on year mainly reflecting the costs of the IPO. Delivering shareholder value remains a key priority for the group as we look to the year ahead.”

Chief executive Emre Sayın added: “Our 2017 financial performance reflects the importance of our diversified business, with robust contributions from our commercial operations and strong performance in our cruise ports outside Turkey, where the geopolitical situation continues to be challenging.

“We are making progress with our strategy set out at the IPO to expand our global footprint of cruise ports, also reducing the significance of Turkey on our overall business.

“M&A [merger and acquisitions] discussions both in and outside Europe are progressing well and we have strengthened our global team as we pursue the next phase of growth. We feel good about 2018 as it starts growing again.”

P&O and Cunard remove Turkey from all itineraries in 2017

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All calls into Turkey by P&O Cruises and Cunard ships have been cancelled for the whole of next year.

The sister lines confirmed that Turkish ports of call have been replaced with alternatives in Greece and Albania,

A joint statement from the Carnival UK brands said: “After careful consideration, we have taken the decision to remove Turkey from all itineraries in 2017 for both Cunard and P&O Cruises, based upon various sources including advice given by the UK’s Foreign and Commonwealth Office.

“The Turkish ports have been replaced with either Greek ports of call or Sarande which is in Albania.”

Turkey has been the target of numerous terrorist attacks this year, most notably on Istanbul airport in June, which killed 26 people.

The country also suffered from a failed military coup.

Crystal Cruises, Disney Cruise Line and MSC Cruises dropped calls in Turkey this year.