Norwegian Cruise posts bigger loss on restart expenses

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Cruise operators recorded billion-dollar losses last year as many ships anchored offshore without passengers, but pent-up demand for leisure travel and roll-out of COVID-19 vaccines have helped cruise lines pull thousands of guests again.

U.S. health officials earlier this year allowed them to resume sailings albeit at reduced occupancy.

Guests with strong household savings have also been splurging on pricey tickets and high-end products and services while on board the ships, helping cruise operators make up for some lost ticket sales due to occupancy restrictions.

For Norwegian Cruise, occupancy was 57.4% in the third quarter ended Sept. 30. It forecast occupancy to be at normalized levels in the back half of next year, when it would also have its full fleet in operation.

The parent of Oceania Cruises also said overall cumulative booked position for 2022 is in line with pre-pandemic record levels and at higher prices, even as the COVID-19 Delta variant hurt bookings for the fourth quarter and early 2022.

Norwegian Cruise also expects monthly average cash burn for the fourth quarter to be at around $350 million, up from about $275 million in the third quarter.

Bigger rival Royal Caribbean (NYSE:RCL) Group last week also forecast a return to profitability in 2022.

In the third quarter, Norwegian Cruise struggled as some customers were apprehensive about going on cruises and it spent heavily to prepare ships for voyages again.

Norwegian Cruise’s total revenue of $153.1 million missed estimates of $198.4 million, according to Refinitiv IBES. Adjusted per-share loss of $2.17 was also above estimates of $2.09.

Shares in Norwegian Cruise fell 2% in premarket trading.