Cruise Industry Capacity Growth Concerns Have Been Debunked

Norwegian Escape

With the cruise industry set to grow at between 4 and 6 percent per year according to the 2021 Cruise Industry News Annual Report, are there concerns about too many ships and weakened pricing? 

No, according to Norwegian Cruise Line Holdings President and CEO Frank Del Rio.

"I think that the narrative of too much capacity coming online pre-pandemic had pretty much been debunked," he said, on the company's first quarter earnings call. "All the cruise line were taking on the new (ships), digesting that new capacity very nicely and increasing pricing. And so we always – our comeback always was, we only have 28 ships. There are many underserved markets that we simply don't have ships to operate in.

"And so we're eager to get our hands on our new vessels, all nine of them across the three brands. And what we're seeing now with in the pandemic is pricing is strong, demand is stronger than ever. I mean, to give you a nugget of data. The Oceania and Regent brands reached their 50 percent load factor for 2022 over 100 days earlier than they did for the record year of 2019 ... pricing power is there."

 

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