With wildfires ravaging Maui and conflict escalating in Israel, Norwegian Cruise Line Holdings reported Wednesday in its third-quarter earnings report.
The August wildfires that devastated Lahaina on the island of Maui affected bookings for Norwegian Cruise Line, which operates Pride of America in Hawaii, according to the company.
The ship returned to Maui immediately after the fire after revising its schedule to avoid stressing the island's resources, but the line has seen a slowdown in close bookings for its Hawaiian sailings. NCLH said demand has improved in recent weeks and is approaching normal levels, but the slowdown has been primarily concentrated in the fourth quarter. The Norwegian Spirit was also sailing from Hawaii, which increased NCLH's total capacity in the region to 6% in the fourth quarter.
The Israel-Hamas war is also affecting cruise lines, which had planned to sail 7% of their capacity in the Middle East in the fourth quarter and 4% of their total capacity in 2024. , NCLH canceled and redirected all calls to Israel and certain calls from surrounding areas for the remainder of the year. The company also canceled all calls to Israel in 2024.
Despite global current events, NCLH reported generating $2.5 billion in revenue in the third quarter, a 33% increase over the same period in 2019 and a record high for the company.
NCLH achieved 106% occupancy in the third quarter, while cumulative booking rankings in the fourth quarter reached record levels and prices also rose higher, the company reported. The company's advance ticket sales balance was $3.1 billion, an increase of approximately 59% from the third quarter of 2019.
“We delivered a strong third quarter that met or beat guidance for all key metrics, driven by healthy demand from our targeted upscale consumers as well as continued margin improvement initiatives, including our continued efforts to right-size our cost base. NCLH's CEO Harry Sommer said:
Patrick Scholes, an equity analyst at Truist Securities, said the company beat expectations in the third quarter, but its fourth-quarter net revenue was lower than expected due to poor bookings due to the Maui wildfires and canceled travel plans to Israel.
“We would call this a good news-bad news earnings release,” Scholes said. “The net impact is more negative than positive.”
