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Norwegian Cruise Line Confident on Europe 2023 Despite Baltic Limitations

Norwegian Cruise Line Holdings is increasing its capacity by six percent in Europe in 2023, coming at the expense of the Caribbean, according to Frank Del Rio, president and CEO, speaking on the company’s third quarter earnings call.

He said that yields on ticket prices and onboard revenue for cruises in Europe were “dramatically better.”

And this is in despite of limitations in the Baltic, with ships not calling at Russia’s Saint Petersburg.

“If you had asked me what is the single city in the world, port in the world that you cannot live without, I’d tell you it’s Saint Petersburg, and we lost it,” Del Rio said. “Very, very high yields, incredible shore excursion sales. So onboard revenue was just higher than any other itineraries that I can think of, and it’s a relatively long season. You can get (there) in mid-May and you can leave in mid-September.”

That limitation in 2022 sent one Norwegian ship elsewhere, as the Getaway moved to the Caribbean for the summer sailing from Port Canaveral.

“It did affect load factors and no question, it affected pricing. And the impact on EBITDA has to be in the tens of millions of dollars,” Del Rio explained.

But both the Baltic and the Mediterranean look encouraging for 2023, with Del Rio noting that Americans traveling to Europe book the highest cabin categories earliest.

“This revenge travel or pent-up demand that we’ve been talking about for months is really alive and well for Americans going to Europe,” he said.

“We believe that Europe is poised for an incredible 2023 season. That’s why we increased our capacity there by 6 percentage points of occupancy at the expense of the Caribbean. And I’ll take that trade all day long because the yields both on ticket and on onboard revenue are so dramatically better for European cruises that we’ll take that trade.”

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