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Norwegian Cruise Line: Not Dropping Prices to Chase Occupancy

Norwegian Cruise Line Holdings saw its average load factor improve 17 points in the third quarter to 82 percent, according to CFO Mark Kempa, who also predicted a fourth quarter load factor in the mid 80 percent range.

“While on the surface it appears only modestly higher than the third quarter it represents continued significant improvement when taking into account the seasonality of our operations,” he said, speaking on the company’s third quarter earnings call.

President and CEO Frank Del Rio said that he would not drop prices to chase occupancy.

“We’ve made no bones about that we hold price,” he said. “We lead the industry by such a wide margin on price that it’s almost untouchable and we continue to grow.

“That is the central theme of our go-to-market strategy, and we accomplish it by marketing to fill by bundling and by having top line product onboard. So that’s going to continue. It is core to our strategy. it’s price, price, price.”

Del Rio added: “We have taken a very disciplined approach to filling. We don’t care if we’re behind others by a quarter or two in terms of load factor, we simply won’t sacrifice price because we’ve seen historically that those who drop prices to ridiculous levels in order to fill take years, if not decades, to recover, and we’re simply not prepared to do that.”

Overall, he said that pricing is up significantly for 2023 itineraries compared to 2019 across the company’s three cruise brands: Norwegian, Oceania and Regent. The company wants to be 65 percent booked for 2023 by year’s end and the expectation is to achieve record cruise ticket pricing for 2023, Del Rio said.

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