Skift Take

Norwegian Cruise Line is optimistic travelers won't lose interest in trips to the Middle East if the Israel-Hamas war remains contained.

Norwegian Cruise Line executives are optimistic about demand returning to the Middle East region in 2024 after cutting some trips in response to the Israel-Hamas war.

“We are more bullish about the ability to return to places like Egypt and other places in the Middle East,” said Norwegian Cruise Line CEO Harry Sommer on a third quarter earnings call.

It’s only Israel for which demand will not recover next year. “I think it will be a while before people are comfortable going back to Israel which is why we are canceling all Israel calls in ’24, even if the conflict was, and we hope it does, end in a reasonably short amount of time,” said Norwegian Cruise Line CEO Harry Sommer. 

Norwegian Cruise Line executives have cut their occupancy forecasts for the rest of the year because of the Israel-Hamas war. “We were expecting somewhere between 101 and 102% in the fourth quarter and right now we’re forecasting roughly 98, and that’s really the vast majority relating to Israel and the broader Middle East region,” said Sommer.

The company experienced an “elevated number” of cancellations and a “lower volume” of close-in sailings, which are bookings for trips close to the departure date, for the region, said Sommer.

Israel represented 7% of Norwegian Cruise Line’s capacity in the fourth quarter and 4% of its capacity for the full year 2024 in the Middle East region.

Here’s what else you need to know about Norwegian Cruise Line’s third-quarter earnings:

  • The company generated a record revenue of $2.5 billion. Revenue for the company was up 33% compared to the same period in 2019.
  • Pre-cruise spending was up over 80% over the same period in 2019. Pre-cruise spending covers activities and goods purchased before the trip. “We continue to get better at getting more of the customer’s wallet over time from the point they enter our ecosystem,” said Sommer.
  • Impact of Maui wildfires on Hawaii’s bookings will continue into the first quarter next year. “Demand has steadily improved in recent weeks and while not quite fully recovered yet, it’s on the right trajectory and now approaching normalized levels,” said Sommer.
  • Norwegian Cruise Line won’t have any new ship deployments until 2025. The company has two planned for the first half of 2025. One will be for Oceania and their other will be for Seattle.

Cruise and Tours Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of cruise and tours sector stocks within the ST200. The index includes companies publicly traded across global markets including both cruise lines and tour operators.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more cruise and tours sector financial performance.

Read the full methodology behind the Skift Travel 200.


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Tags: cruise industry, cruise lines, earnings, norwegian cruise line, norwegian cruise line holdings

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