Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) yesterday today reported financial results for the fourth quarter and full year ended December 31, 2022 and provided guidance for the first quarter and full year 2023.
While the numbers were what they were (still in the red, though much less so than a year ago), the company says that entered 2023 with a record booked position and at higher pricing.
Occupancy is expected to average approximately 100% for the first quarter and is on track to reach historical levels for the second quarter.
Now, in an echo of the cruise industry of pre-pandemic years, Norwegian is now looking to increase capacity.
This year, capacity is expected to increase approximately 19% compared to 2019 including the delivery of three newbuilds in 2023: Oceania Cruises’ Vista, Norwegian Viva and Regent’s Seven Seas Grandeur.
“We are now squarely focused on the future and are taking deliberate and strategic actions to best position the company for its next chapter, which includes an industry-leading growth profile representing approximately 50% capacity growth over 2019,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Lines Holdings Ltd.
“This year, for the first time in our history, we are gearing up to deliver one newbuild for each of our brands, adding over 5,000 additional berths to our fleet including an over 20% increase in our upscale berths,” said in a call with financial analysts. “On a capacity day basis, this will result in approximately 19% growth in 2023 compared to 2019.”
MODIFICATIONS TO NEWBUILD PIPELINE
“We have made some modifications to our newbuild pipeline primarily related to the last two ships in the Prima Class,” Del Rio said. “These ships have been lengthened in part to accommodate the future use of alternative fuels.
“We now expect gross tonnage for the third and fourth Prima Class to be approximately 10% larger and the fifth and sixth Pima Class ships to be approximately 20% larger than Norwegian, Prima and Viva.
“As a result, delivery days have shifted a bit, and we now expect one larger Prima Class ship to be delivered each year from 2025 to 2028. We remain confident in our ability to profitably absorb this capacity with continued consumer demand for travel, our expansion into the many unserved and underserved markets around the world that our brands have not yet tapped into, and on the broader industry’s vast under-penetration particularly when compared to land-based vacation alternatives.”
Those “alternative fuels” Del Rio was talking about certainly include methanol. Back in September, Norwegian signed up as a member of the Methanol Institute. The following month it inked an MOU with MAN Energy Solutions on a project to retrofit a medium-speed MAN 48/60 engine to make it capable of dual-fuel diesel/methanol operation.
The MoU provides for a multi-stage project with the third and final stage involving the completion of field testing and engine handover to Norwegian for commercial operation.
