Wave season wasn't as stellar as hoped, in part because the record US cold put a chill on bookings, Norwegian president and CEO Kevin Sheehan said. But, as time progressed, things improved. Each week for the past 10 weeks Norwegian has chalked up 'significantly positive bookings.'
Sheehan also pegged the softness in Caribbean pricing on the 'lemming theory'—everyone added berths because the market looked great a few years ago and suddenly capacity jumped 20% in 2014. Norwegian and industry capacity in the region will go down next year.
Meanwhile, Norwegian has a 'significantly favorable load situation' currently, with bookings significantly ahead in Europe, including the Baltic, compared to last year, Hawaii on par and Canada/New England 'heavily booked.'
Europe net yields are forecast to be up double-digits and Alaska up low single digits. Hawaii continues to perform well, and Canada/New England is priced well, Sheehan said.
There's still opportunity to improve Caribbean pricing and that's a major focus, he told analysts during Tuesday's earnings call.
The company affirmed its full-year earnings per share guidance range of $2.20 to $2.35, a 60% increase from 2013.
Sheehan predicted a better Caribbean environment in 2015.
Keeping Norwegian Epic in Europe (Barcelona) year-round will cut out almost one month of low-yielding trans-Atlantic voyages and means the addition of Norwegian Escape in Miami late in the year will make a minimal incremental capacity increase. On top of that, the company continues to put Norwegian Pearl on charter, which also helps pricing.
Plus, MSC Cruises will be taking MSC Divina back to Europe in summer 2015; Sheehan said that ship has been a big factor in the softer Caribbean rates this year.
Norwegian will have 45% of its capacity in the Caribbean, down three points from 2014, and 21% in Europe.