Recently, I spent an hour gleaning cruise industry insights from Frank del Rio, president and CEO of Norwegian Cruise Line Holdings Ltd., the parent of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.
From the perspective of del Rio’s prism, the cruise industry is experiencing some of its best years ever, and for cruise companies like his, bookings are robust, with consumer demand high.
Accordingly, consumers can expect to pay more for their cruises than they did in the past, as demand is high enough to merit price increases. “Based on what I know today, Bob Binder (who heads of Oceania) and his team at Oceania are going to raise prices on 67 percent of all 2019 sailings,” del Rio told an audience of travel advisors attending a Signature Travel Network annual event in Amelia Island, Florida. “That’s how well Oceania is doing.”
“Not to be outdone, Jason (Montague, president and CEO of Regent) is raising prices on 92 percent of 2019 sales,” del Rio added. How much the two brands are raising prices wasn’t revealed, but the price hikes take place on October 1, 2018.
Perhaps even more significant than the price increases, however, is that that booking window is extending, meaning that space is filling further out than before. Room inventory is being snapped up at a brisk pace, bringing about an end to distressed inventory that must be discounted to move.
“The days of us or anybody else deeply discounting inventory inside of 30 days or 60 days are gone,” del Rio said. “At our last earnings call in early August, I mentioned to Wall Street that the Oceania and Regent brands had hit 50 percent occupancy for 2019.” That’s the earliest that the two brands have ever reached half capacity for the following year, according to del Rio.
There are currently no signs of the upward tick in cruise demand abating. In fact, the heads of cruise lines are bullish, and their companies currently have a record number of ships on order. The NCLH brand alone has ordered 11 new ships, with some of those coming as late as 2027. With such investments in the future, clearly del Rio and company have confidence in cruising. For those at the helm of cruise companies worldwide, there appears to be nothing but smooth seas ahead.