Norwegian Cruise Line sees delayed recovery from slump

Cruise ship Norwegian Spirit docking in Cobh, Co Cork. Norwegian Cruise Line has forecast a loss for the current quarter and revenue below estimates. File Picture: David Creedon

Norwegian Cruise Line has forecast a loss for the current quarter and revenue below estimates as occupancy rates remained stubbornly below pre-pandemic levels, sending its shares down 12% on Tuesday.

Its second-quarter occupancy of 65% compared with more than 107% in 2019, a level the company does not expect to reach until the second quarter next year.

In contrast, rival Royal Caribbean Group forecast triple-digit occupancy by the end of this year and Carnival Cruise Line expects to approach 110% during its current quarter. 

The industry looks to cruise towards full occupancy after the pandemic brought it to an 18-month standstill, but self-imposed constraints as well as onboard Covid-19 cases, staff shortages, and volatile demand stand in the way.

"2022 has been a very lumpy year. It will continue to be a bit lumpy for the second half given where our load factors (occupancy percentage) are expected to be," said chief financial officer Mark Kempa on an earnings call.

For the third quarter, Norwegian Cruise projected occupancy in the low 80% range, revenue of $1.5bn (€1.46bn) to $1.6bn, and a net loss. 

The cruise operator also blamed higher staff and fuel costs for a fourfold increase in total cruise operating expenses in the reported quarter. 

• Reuters