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Norwegian Not In A Race to Fill Ships to 100% Occupancy

Norwegian Cruise Line Holdings saw 40 percent of its berth capacity back in service during the third quarter with occupancy levels at 57 percent, according to CFO Mark Kempa, speaking on the company’s third quarter earnings call.

“Despite the reduced occupancy levels in the quarter, I am extremely happy to report that the fleet that operated in the period was cash flow positive,” said Kempa, of the eight ships the company had in service.

Despite the 57 percent occupancy level, the company is not in a race to fill its ships to the 100 percent mark.

“As we said time and time and again, we’re not in a race to just fill volume. We want to maintain price discipline and we’re going to do that,” Kempa said.

“Rather than look at occupancy, I think a better metric is looking at the number of passengers that we’re carrying. I think in the third quarter, we had about 60,000 of roughly passengers carried. That’s going to increase to roughly 150,000, 175,000 in Q4, 250,000 to 300,000 in Q1, and then you’re up back into the 0.5 million. So, our occupancy is ramping up in line with our fleet roll out. Pricing discipline is important to us. We’ve said time and time and again, we want to protect that. We want to protect the long-term brand equity. So, we’re going to do it in a thoughtful and rational manner rather than chasing that cheap customer just to gain that point of occupancy.”

CEO Frank Del Rio added: “We’ve seen time and time again that companies have dropped prices as we saw back in 2008 and 2009 during the great recession, it takes years. There are some who have not yet recovered to their pre -great recession yields, a decade later or more than a decade later. So we’re fixated on maintaining pricing.”


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