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NCLH estimates financial hit of Cuba itinerary changes

Norwegian Sky
Norwegian Sky is shown arriving at Havana harbor. Beside the NCL brand, Oceania Cruises and Regent Seven Seas Cruises itineraries are impacted PHOTO: Norwegian Cruise Line
Norwegian Cruise Line Holdings Ltd. said 2019 adjusted earnings per share could be reduced 35 cents to 45 cents due to the Trump administration's ban of cruises to Cuba from the US.

Prior EPS guidance $5.40-$5.50

In May, the company had estimated 2019 EPS in the range of $5.40 to $5.50.

Itineraries for Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises are being modified.

'Our three brands are working diligently to accommodate the needs of our guests and travel partners as we quickly modify itineraries to meet the new Cuba travel regulations,' said Frank Del Rio, president and CEO, NCLH.

'We share in the disappointment'

'We share in the disappointment that comes with these changes, especially on such short notice, and sincerely appreciate the cooperation and understanding of our guests for this inconvenience.' He continued: 'Our brands have put in place generous compensation programs that offer guests and travel partners a compelling, value-packed alternative.'

One-quarter of impacted capacity days are for Oceania, Regent

The company said the extremely abbreviated timeframe to modify itineraries to be in compliance with the new travel restrictions to Cuba exacerbated the impact to earnings estimates. Approximately 25% of the impacted capacity days are attributable to the combined sailings on the Oceania and Regent Seven Seas brands, the majority of which were Cuba-intensive premium priced itineraries.

3% of total NCLH capacty

Sailings that included a Cuba stop represented slightly more than 3% of the company’s remaining sailings in 2019 for all three brands.

Factors playing into the earnings impact include modifying itineraries, the substantial discounts offered for passengers to remain on their booked cruise, the accommodation of cancellations and changes to reservations, incremental marketing investment to support the compressed sales cycle for the modified voyages and the protection of travel agent commissions.

NCLH shares were up more than 2%, at about $53, in morning trading Friday.

On Thursday, Royal Caribbean Cruises Ltd. estimated its 2019 EPS impact from the Cuba change at 25 cents to 35 cents.

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