Cruise Line Onboard Revenues Are Off the Charts

The Carnival Breeze

Cruise lines are seeing record onboard revenues on a per passenger basis thanks to pent up demand, bundling strategies and consumers with fresh wallets.

“Our onboard revenues for guests are off the charts, and our Net Promoter Scores have been exceptionally strong,” said Arnold Donald, CEO at Carnival Corporation, on the company’s third quarter earnings call.

Also helping is an improved fleet mix with more new ships with more opportunities to spend, according to Carnival CFO David Bernstein, adding the company’s bundling packages have also been key.

Chairman and CEO of Royal Caribbean Group, Richard Fain, called the onboard spend in the third quarter unparalleled.

“Onboard revenue strength contributed to a 12 percent increase in total revenue per passenger cruise day, compared to the third quarter of 2019,” added CFO Jason Liberty.

Michael Bayley, president and CEO of Royal Caribbean International, said the onboard revenue environment was truly impressive

“We've also really increased the volume of special groups such as gaming groups that are coming on our ships and that's proving to be very profitable,” Bayley said, also noting a new software system the company is using that is driving more pre-cruise revenue marketing.

The same financial strengths are being seen at Norwegian Cruise Line Holdings, added CEO Frank Del Rio, speaking on the company’s third quarter earnings call.

“Onboard revenue has exceeded our base on expectations by over 20% with broad-based strength across all shifts, regions, and revenue streams,” he said, cautioning the high onboard revenue may not last.

“We believe in the bundling strategy,” Del Rio said. “We're doing more and more bundling across the three brands, and that gives people a very fresh wallet because the combination of them booking further out means they have even more time to refill that wallet and make it even fresher, if you will. And so, all these factors are contributing to the higher onboard spend.”

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