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NCLH stopped offering future cruise credits months ago

FCCs and cash bookings are both important, in Frank Del Rio's view. 'Customers who took an FCC showed a great deal of confidence and support in our business and we want to make sure they get their cruise,' he said
It may have escaped notice by some that Norwegian Cruise Line Holdings stopped offering future cruise credits 'since fall at least,' President and CEO Frank Del Rio said.

Now, when cruises are canceled, everyone gets a cash refund. (Unless they paid for a suspended sailing with an FCC; then the refund goes back to them in the form of an FCC.)

'There is no choice; you get your money back,' Del Rio told analysts on Thursday, adding that the company has the liquidity, and FCCs are dilutive to future business since they include a 25% premium.

40% of FCCs have been redeemed

For NCLH as a whole, 40% of FCCs issued have been redeemed. Pricing, Del Rio noted, is 'flat to slightly ahead of all-time high pricing, including the dilutive effect of the 125% FCCs.'

In a business update, the company noted that 75% of the cumulative booked position for the second half of 2021 consists cash bookings, versus FCCs.

But Del Rio took issue with some in the investment community who consider FCCs not as good as cash bookings.

'They're both important,' he said. 'Customers who took an FCC showed a great deal of confidence and support in our business and we want to make sure they get their cruise. So if we have to extend the booking date or if we have to extend the sailing date as the suspensions continue, we will do so.'

That said, customers are being actively encouraged to redeem their FCCs.

Reduced cost of customer acquisition

With 60% of FCCs still outstanding, the cost of customer acquisition should come down, CFO Mark Kempa noted, since the company doesn't have to find as many new customers to fill inventory.

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