Seatrade Cruise News is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Why NCLH sees 2016 as a breakout year

Frank Del Rio - bookings exceed capacity growth, pricing up across all three brands
Frank Del Rio sees strong bookings momentum into 2016, exceeding the company's 11% capacity growth, pricing up across all three brands and a 12% longer booking curve, giving him confidence Norwegian Cruise Line Holdings' performance will soar.

'We are in a very strong booked position, the best in the company's history,' he told analysts on Tuesday.

2016 is following in the footsteps of 2015, as cfo Wendy Beck put it, and shaping up to be 'a breakout year.'

The first quarter may present tougher comparisons, though, with Pride of America, Norwegian Cruise Line's highest yielding ship, going into drydock and Norwegian Epic earning lower yields in Europe during off-peak season, compared to its peak season Caribbean deployment this year.

Still, Q1 net yields are expected to be positive, Beck said.

Europe, which has been challenging due to factors like eastern Mediterranean and Black Sea geopolitical issues, the Greek financial crisis, disruptions in Istanbul and the refugee influx, is shaping up well next year. However, for North Americans a stronger dollar tends to work against cruising in favor of land vacations.

NCLH's long-range target is increasing net yields 3% to 4% in years when new ships are introduced. 2016 will see the arrival of Oceania Cruises' Sirena, Regent Seven Seas Cruises' Seven Seas Explorer and the first full year of operations for Norwegian Escape.

Norwegian Escape is producing record bookings for the line, 'surpassing our highest expectations,' Del Rio said. It's garnering double-digit yield premiums over other ships on similar itineraries.

Norwegian Escape is booked 'three times deeper than Getaway was at the same time at about the same price,' he said.

Reminding analysts that his Prestige Cruises background is in the luxury and upper premium segments, Del Rio said he personally was impressed by the ship's quality materials and its vast restaurant selection.

'Pound for pound or, rather, ton for ton, the offering on Norwegian Escape will impress the most discerning travelers,' he predicted.

Moreover, drydock improvements are lifting the product, particularly on the NCL fleet, enabling the company to command better pricing. By 2017, all NCL ships but one will have been upgraded.

NCLH is satisfied with the current length of the booking curve. 'Much more and you'd be leaving yield on the table,' Del Rio said.