NCLH - Earnings call transcript Q3 2021 | Norwegian Cruise Line Holdings Ltd.

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Operator

Good morning and welcome to Norwegian Cruise Line Holdings Third Quarter 2021 Earnings Conference Call. My name is Laurie and I will be your Operator. At this time, all participants are in a listen-only mode. Later, we will conduct a Q&A session, and instructions for the session will follow at that time. [Operator Instructions] I would now like to turn the conference over to your host, Ms. of Corporate President and Vice John, Investor Communications, Relations, ESG. Jessica Ms. proceed. please John,

Jessica John

and I'm you, morning, handing Rio, Cruise our us earnings good (ph) President Mark Frank which call before Third the commentary, update Thank XXXX Thank Officer after call and Line joining will and everyone. Mark Chief Lori of our Kempa, Frank follow the today with joined by you Executive Vice for quarter business discuss Del call. and Norwegian President Frank remarks. Executive and to begin Holdings Chief Officer. to will for Financial back for opening financials closing

the We open call will your questions. then for

being webcast call As a Company's conference reminder, on simultaneously this at Investor is www.nclhltd.com/investors. the Relations website

to which a this XX for our reference during days call the on found available today's make may be Relations presentation call. presentation call, website. Investor Both replay following and conference slide also will be also will We

Before a we begin, I cover items. few would like to

XXXX should press statements that our is website. that forward-looking conjunction earnings statements. differ with includes Our materially results release Investor call actual the risks contained in statements This from results third and our statement on was our could These in available uncertainties involve morning, be to Relations and considered this issued cause with such quarter cautionary release.

contained Del most Our call I'd comments are may earnings presentation. GAAP to over Rio. our comparable directly the measure to Frank? A non-GAAP financial other like financial to also the With disclosures in reference release reconciliation turn and associated Frank measures. that, and

Frank Del Rio

of as ones, us today. everyone. And hope well morning as and you on And that Today, remain areas. Jessica. will safe. healthy joining I loved And we discuss X for you good Thank your as always, you, commentary all thank

on made cruise we back. great the progress come have our First,

we new expected vessels, sailings And our our other occupancy When levels. of booking had X spoke fleet, successfully we to demand our relaunched Encore Greece, finally, contribute debut, second when all to Coast expect our first Norwegian our important on and which plan. XXXX XX for the operating EBITDA come all outlines and is improvements. for with sailing how Second, in Norwegian fleet with brands normalized more last have XXXX, of X have West pleased we August, outsized we're in in full which shown service ships. to in strength of performance operation metric our We Jade resuming return Slide recent in in and trends, with in couldn't its financial then, pipeline be verge of of have back to exciting relaunched far Since the be XX particular early and we on Alaska our we growth the making just on resuming vessels, our vessel cruising U.S., re-launch Seattle. of from award of our winning the operations. half

with we better demand robust get and are beyond power industry-leading to scores month with coupled boarding revenue pent-up satisfaction to wallet, safety new and off generation. one record And the with vacation kinds our all each brands is resulted of has and to First, since experiences, deliver not than crew are missed remarkably in known Seamlessly beat high our before. our going sequentially our strong commitment a fresh our bundling health pay to second, for the for. returning. exceptional guest experiences and vessels strategy seeing of onboard which translating the our protocols This adapting service above has

XX% base our and across onboard revenue on In with expectations strength over exceeded streams. regions, by broad-based all fact, revenue has shifts,

there we as mix, demand are of including an healthy indicative extrapolating and caution current and contributing experiencing. though, guests just would factors demand, elevated are is pent-up encouraging may several that these steady-state level transitory figures the as signal or I permanent consumer of it future nonetheless cabin, against to yet, While be performance the positive

Lastly, vessels. multilayered and say health designed sales we worked in introduction were to and COVID-XX to heights In the population what tune third able fine happy one in during short, mitigate once mid-Cruise -embarkation fairly occupancy of variant, protection ships aboard Despite of that of as testing our transmission our studying and of have pandemic, we protocols positive and stellar to these -boarding filtration relaunched Delta continue layers highest the testing, summer with we identified cases evaluate and self-imposed then centers. as already unfortunate upgraded our shifts cash return multiple the cap departation importantly, to contributed vaccination general in saw all a time. most a is including rigorous results speak additional were protocols XXX% our with the face safety consequential well-resourced quarter, in all and fleet The the with flow of Today, and well for service coupled our during the below a even this requirement, I'm themselves. going onboard, prevalence level s. air and stood systems operating and strict pre the pre medical robust universal at with

our team protocols continue our to applicable Public from modify former and led with experts as FDA evaluate of guidance Health needed, Authority. will Scott science Dr. Commissioner We and Gottlieb, by follow and former

not all pandemic health said, have away, visit. at but crew go our levels. and willing are lengths protect to well. now, And As as we time most that and commitments the is and again, we safety And and operates to important the principle great guests, and our far post our just time I to communities pre Company at

were a pleased to voluntary and revert large Just for at with last view through a program. have by enhance XXth by the week, all and we industry response January successful conditional and the protocols be the our positive we positive to for We receive as framework rigorous to the other sailing step Company travel, continue which our we COVID-XX, the at CDC recognition health positive much comprehensive length to order more encouraged those than already extension of and view CDC the and were or safety forward implemented stringent sector. temporary from taken in more to resumption see this cruising the of of to any order point much which of XXXX, hospitality leisure, will a

of day [Indiscernible] is our execute we met and assumption, by flawlessly on us. environment, X. the on Voyager increasingly progress therapeutics, Phase vaccinations, Each become detailed to living seemingly to ability and Slide pandemic with the which behind With worst our [Indiscernible] confident is ongoing adapting in is Brian the in by

by We and pre levels to and our April peak demand of continue fleet with return -pandemic to this the of back steady the in no season across in third pricing. for Xst beginning time be fleet summer trajectory, expect to operation XXXX, and capture later of occupancy and projected we than to are prudent our full XXXX, a well-positioned quarter

service we travel ramp expect which as we changes are health While accordingly. close global a other to and ready our port we fits to environment on some watch keeping start are in public our adapt to and plans availability, any restrictions, up continue could affect return we re-launch, seeing as

demand that periods. to pleased cumulative future booking cruising, to to and our demand of position for continue XXXX, during trends. by Turning we slide of I'm today's shift book report record the all these see in discussion operating X, particularly robust for XXXX as second to we evidenced half and sailings our

our XXXX's of was beginning the third booked for ahead at levels higher recall of record at and position full-year pricing. XXXX You'll quarter, significantly and our meaningfully

we the the chose wait the environment. the our patterns this quarter optimal for sentiment closer seen quarter in we net continue particularly outcome scarce as the today, flows health coinciding a period, a heavily record funds variant particular slowdown raise lessening than surge for prices, beyond. strategically throughout However, pricing booking leisure with the resulted in for or and XXXX Throughout and/or delta volumes. we half pricing, that the in rebound, manner, the less and and marked and by The see all in booking chase hold was to consumer in seen have disciplined XXXX XX-week in with pandemic Rather is consistent that the for to impact even to second and marketing weighted load summer XXXX and direct difficult of in-sailings, remain and than record during public sector, in pullback ebbs sequentially dropping by changes broader our impact to demand and throughout we XXXX. first of spending both fourth surge and with economy Delta travel XXXX,

to willing load the of brand quarters. long-term are to We Company profitability simply order on the transitional pricing intently and factors the are not positioning focused increase in in upcoming and sacrifice

have it rebound a and with X over in COVID-XX as experienced in this surges sequentially past we forward the believe improvement volumes bookings, weeks. happened will the net improving As past We moving accelerate at booking first. recently situation improved,

channel children expanded especially for to of and much demand-generating second, And recovery mid-November, just up on lastly, and allow brand. agent the promotion. begin of space. guests, an will X last which XXX% their night families, Monday to in approval ages the marketing vaccinated XX, ramp in travel to Black with sail brands investments vaccines Cyber Our our came group for coinciding the Friday expected anticipated And and

credits. strategy vaccination full-year paid pricing, has line impact drove. and full record our higher including the XXXX at off and and future diluted cruise levels with today, factor go-to-market load when XXXX Our in remains And of even

XXXX In point at in pricing addition, the of sailings, time we and any and are second XXXX meaningfully better past. for half in full-year booked better at similar that

operation to summer occupancy be industry. periods which profitable time most as the and the capture I normalized fleet quarter before, for just in continues season, be traditionally these in is all-important full our peak third is quarter mentioned the expected focus primary when to to and at on levels. Our

more Now, than for book position our breaking XX% full-year further, brand. our loyal bookings repeat XXXX from are to of cruises down

with of is XX% addition, remainder cash In cruise new the comprised of future approximately credit. comprised bookings

been XX% of So SECs the of value outstanding have far, approximately total redeemed. our

-- to are As early, XXXX start. added resulting impressive yield credits issued as cruise the value I've XXXX that be look XXXX, X and trends we beyond. -- beginning off year-end -- applied booking future I the will at will still thus we with through issue sailings the as an hinted also a to XXX% when can And reminder, of far, only in dilution pandemic while to issue

to a Regent day from Cruises record in guests Regent into guests to the both for in its continue are for And debut loyal XX% for brand. March in level, single and XX%. proof evidenced XX%. sales and of of XXXX/XXXX windows XXXX we brand guests booking load Oceania set single Our voyage all itineraries and milestones also approximately experience of surpassed of particularly collection. bills. point guests. And its booking until were elongated in for of single in continue was all-time a the coming August, with the Reservations Seven demonstrating available our offerings exotic to inaugural Vista's that These notable doesn't XX-year empirically while an Baltics, the by surpassed record in the new passenger the long our its from booking day, future were advanced the launch versus is XXXX, set and ship, exceptional Vista, further demand launch both history most largest Case future, be sales historical interest of factor booking for by demand pricing Cruises the brand Seas sold further just nearly Strong unique the a appetite September, with brand's day of April Asia, Cruise in popular, in Africa, new which previous 's XXXX Oceania record destinations itineraries. our that continued X/X new recent inventory of alike. bookings and incredible product for season, record ticket record-breaking set with

ticket equating gross approximately the on prior to increase fill. in the sales a basis quarter, an increased XX% advanced million approximately quarter's $XXX Our versus

advanced cash XX% approximately than are in our quarter for and sales year In beyond the sailings addition, beginning of record XXXX. XXXX and the same importantly, for ticket more second time at higher

fleet, our sequentially. we tremendous As of to momentum expect continue with move rest this forward phasing the in we

that -level be to speed Speedway Prima's summer the Encore, for has Prima converts track miles of evolution, to Norwegian booking and race show, than Everything world's next which sales and Company for month, for in of Looking continue vessels from XX welcome later Summer, previous transforming set The an best to Line, new returned can Last including impress, is showcase first doubling X. will slide, she XXXX. a nightclub, ago even meticulously And including the the freefall Italy see week as Norwegian new sales industry of just track, that exciting than in Musical. Donna XXXX was the a experience. XX% been is Cruise by mark also featuring X and on the 's we the an single Prima nearly in what introduction record, for advanced shift first record long foot at elevate was we nominated at our brand Prima, experiences, X and theater shipyard them, future chapter the Vegas race initial debut Norwegian largest weeks I of XXXX and Norwegian first reach Bliss. her Tony-award which a slide witness first the XX and set able three-story Regent industry over Summer drop lineup, style the I shattering also brand, the level May, venue to in from class to being despite Prima Norwegian guest will in few weeks numerous firsthand booking a where designed tri ever on where into day exhilarating the large, XXXX. the larger after its headline you hour. impressive can dry Bliss turns, will per the entertainment about best Norwegian a drivers the cruise her musical interactive Prima, unveiled record sea.

are fastest and trending Bliss Our line booking the selling data a higher prices. volumes in with the line previous builds new materially for

to on higher will force, cabins is profile levels. As change on new-build our mix slide in Slide be berth capacity approximately XX,XXX when coming This forward ship our versus than full in of back we cutting-edge see X adding growth approximately you world-class ships look additional XX% new as addition these berth online of across by premium of The berth XXXX. to our X, just Prima will ships increasing -pandemic total industry-leading XXXX to brands. In X Norwegian also illustrated cabin our first expect to XXXX's XX%, favorably can berth approximately X, pre count fleet to is our approximately grow XX% XX% today. with our the

bandwidth eager targeting. around product numerous revenue real In and versus addition experiences, unserved for X,XXX and existing onboard, Excitement high globally. and estate the and innovative of I'll with flexibility this premium into in offerings to penetrate next premium manning to whistles, have revenue, exciting increasing new additional We allow profitable outpaces bottom are segment for ready expect of diversify like with new place of at new Prima technology us fleet, And our for top the all deployments line this our fleet. the shows, and well growth Breakaway efforts, outsized ships capacity. mix and absorb Prima further drive efficiency capacity only cash upscale back to bells X,XXX to and generation continue to that XX streams trend the example, these pricing approximately easily addition will for latest closing the translating improve ESG first as but in the and more brings onboard we slide be ship allow Breakaway and repeat optimize time. to our to I'd Ships financial cash our our meaningful to And base significantly significant us a new potential the two and our growth capacity that new in right and we are it ships. future line historically Plus the and and have to are addition give Plus but EBITDA, right provide and and update to to given back Class a the call for growth smaller capacity, growth ships also four with flow powerful markets brings underserved Prima's s, we to brand us and the guests Mark. fully that adjusted to profitably and XX engine will update. not demand on demonstrated of most the our turn remarks to to strategic this berth as an are it over the well, than absolute EBITDA It is flow and right the driver The operating only which provide every appeal our as size later now, as absorbing but attractive the yields, Class ships outsized and new previous a additional our berths guests helping continue nearly for the Class, Mark Ships, and to fuel to Plus at Class Prima as success ROIC growth. the and

Mark Kempa

Thank significant quarter revenue-generating third our unimaginable, X first voyages the with a after sailing you, reached a plus resuming XXX financial Frank. in operations. days milestone We with previously

and XX, in in Occupancy was our quarter completed track X plan. had reflecting end successful service By with self-imposed been third to of approximately limits. our our quarter, remain the and and line Voyager third had XX%, in representing expectations approximately resumption ships on the return Our we XX% the on occupancy to service, capacity. very of Phase started execute berth XX our has voyages, we

rise the focused and is number diligent occupancy being the X and I variant, up to in in safety brand previously, thoughtful to our a ensure race, the quarter, priority. not taken which we our cash and am Despite Increasing voyage of health occupancy not long-term are we reduced just levels remains the resumption, and occupancy protect conservative with our flow also with prudent occupancy was period to that report to As that but approach the outlined have guests on operated to be our fleet our a in we of that levels proved have the happy crew, positive. ramping equity. extremely Delta

have year-end, XX% in approximately XX by enter as we back expect to the XXXX. the we representing ahead, with of quarter second service Looking ships full fleet operating capacity

the billion ended $X.X cash XX, Turning and approximately cash with to burn equivalents. and liquidity we Slide on quarter cash of

this a X into profile our backstop addition, through an the commitment, in liquidity we into additional billion liquidity XXXX. financial commitment convert the by would In our week, immediate maturing further and should XXXX. entering enhances and If enhanced liquidity note April drawn, earlier need arise. mid-August unsecured This provides flexibility

For sake this recovery to on given projected of do so our time. clarity, current not and we facility this do drawn at have not intend

cash than million. for rate Our the average [Indiscernible] was guidance As approximately lower XXX prior for cash third monthly of million burn quarter, XXX

For burn we service. the fourth and monthly cash additional vessels to restart to ramp average quarter, reenter approximately we continue expenses XXX increase expect our as to million up

a based under point of with from our a cash On bookings, crucial towards up investments plan, first the new we holidays to inflection not head with a existing we re-entered expected cash quarter current as that Black Wave to into expect of continue estimate Friday, as quarter, forward. basis, that contribution of inflows It move expecting accelerate note service, from During this shifts resumption are on the both flow tail operating our to reach marketing Season. important XXXX. which and the or demand-generating burn include we have positive Monday, expect turning ramp cash does Cyber the is to and the net we both we

a half and return market In to our to we for conditions, second on addition, are path on of based the XXXX. trajectory solid profitability current

cash XX, corner, decreased and slide burn, million, inflows OpEx equivalents, $XXX by future balance other guidance interest Turning and billion $XXX approximately and is we collections capital amortization, capital approximately just and fuel XX, consumption, quarter million which health With of SG&A approximately to cash in to modeling from and provided assist to on and current metrics the our and of slide refunds expenses, for additional cash of $X.X third CapEx, cash with investments and XXXX interest cash $XXX voyages. of some expenditures. net expense, net working now million, operating of customer driven including including and have certain around safety depreciation the

expectations we growth on In detail capacity Slide have XX. addition, annual our provided on

gear and growth through As deliver impressive profile generation. accretive to to we cash our we expect up XXXX, flow meaningfully be earnings on which both to

much our XXXX on the focus color plans with still our cost Lastly, and in the We're our next experiencing. we're more wanted and market inflationary fine-tuning I we'll related call. outlook what projections, pressure, quickly on earnings to touch of on provide on

fuel, and all in similar other to pockets food, seeing commodities. almost are such pressures However, industries, we other of areas as

is to supply inflationary of beneficial diligently mitigate of the which the Our cost we costs. we are ramp-up a The chain these primarily is is continues fortunate in some pressures. that an business, are And our environment. group that timing relieving operations news work cost to good in transitory fixed

On front, multi-year have visibility the costs covered of our which bulk employee on agreements. of the are a vast base, crew, we our the our as under comprises degree of majority high labor

On vacations alternative. pricing a power helping compelling inflationary the Even seeing, cruise is the with proposition power, are very vacation pricing side, value seeing crusher. continue to we also strong land-based operate incredibly offset flip we're which versus to

said have similar offers XX% the least in alternative. XX% past, that cruise vacation to land-based typically a than at a We value, better

on before. our by is our which resuming to pricing guests, compelling multi-year peers sailing. we and that guest to of value now scale, to market will our high Without level our we offerings. satisfaction are a strategy land-based even evidenced land-based achieving on to since prices relative more further labor With continue the consistent the parity combined our of of can factors service same These increase us scores record, for vacation that our allow backdrop inflationary proposition experiencing, provide and many current and exceptional ever offering is pressures a believe than

not global I our completely to call we public increasingly continue Frank, reiterate we as the and optimistic are of Before recovery. yet while that want are environment remains to out handing woods, health road the the to fluid, we back on

We are long-term and is position a pivot our shift on and attention in to financial now more plan, on recovery slide executing our offensive to medium a outlined which to approach XX.

on track we growth our financial this record updating performance, provide delivering part I attractive strong As next and remain call call, on of Frank and will to closing optimizing Balance look for focused back our you to plan, hand in to profile. progress commentary. but the rebuilding our Frank. our Sheet, our of disciplined forward on now, I will over

Frank Del Rio

Mark. you, Thank

wrap prepared to like we on Before on XX. sustained sales program, our provide global our I'd up remarks, slide an update and sustainability

on We the impact are society driving of positive to through the this advancement committed program. and environment a

On greenhouse to to quarter, we under rate, our made gas the our new initiatives front during reduce the ongoing environmental in offset first purchase addition program. emissions the carbon

dioxide of credit gap to As help verified bridge X-year the a metric million will high-quality, period. effort announced in harboring is become the which measurable a to of summer, committed equivalent a feasible. carbon reminder, that until new near-term technologies step emissions reductions, offset our we over have we in purchasing X over decarbonization tons the This

sizable, carbon goal Our years that ton purchases offset plan of future increase reach neutrality. we us million and our is X in commitment to help

maintain to our and a our globe, valuable strive We asset. also across doubt the who team empowering are members workplace for most without supportive

to to on also we the new so flexibility Monday which members moved proud office work to business employees additional and allows shoreside indefinitely culture supporting model maintaining model members while workplace have team that for in-person X-X Friday. This we collaboration in work work flexible Thursday requires our that globally, provide announced through are recently and and for goals, a fostering of. we our us our remotely productivity such, team As

progress Forbes honored naming list. earlier top have the made to Employers after with among efforts, are employer companies ESG the travel team top to large year Forbes being with sector. We Best no overall our date plans we recognition This here. that the on the America's Best ten to the among the in World's to companies leisure in have also are category we our the we this our And list and pleased named and which ranked came this while Employers stop in commitment recognized was XX we to

drive to positive and We the as world to are impact committed continuing on change responsible a citizens. make lasting corporate

ensure for forward focused transparency remain this topic continue on and our critical accountability our we around and our to to key addition, look ESG details journey. you stakeholders, additional on disclosures around enhancing as sharing efforts I In we ESG with

Turning with to to slide XX, leave I'd you takeaways. final a key few like

our fronts. is successful been voyages have return service initial on track and First, to all on

Xst on full in operation headwinds of protocols Our health guest and with safety confident intended, be to XXXX. of a we us. experience we And variant, for Despite our we execute are our pandemic next half are increasingly scores. we worst voyage high fleet as resumption the related now the onboard by the back in ability April revenue of year. satisfaction to working and have point and demand we seeing our booking in phase strong are with are throughout plan to positive nearing for And lastly, XXXX, third behind to appearing strong and believe Delta to the quarter an pricing trends, future inflection with particularly continue cruising, target the and

deliver that open years. bright in up coming our for providing as with our let's financial Laurie, is in industry-leading profile, growth future and meaningful while in questions. to expect the next shareholder the history we and value forward look results boost And Our to we storied we Company's chapter which

Operator

Thank many [Operator question. time to to you, Frank. order In your Instructions]. Instructions]. X limit people as get [Operator through please the queue,

comes Stephen question of first Goldman from Grambling Our Sachs.

Your open. line is

Stephen Grambling

you And then don't the for I think much maybe color yet, for the but just term. any of I course know factor hear on about over guard questions. Hey, year. too taking love thank longer XXXX you rails to to want looking to the would load give

own compare consumer operations? If and you and approaches, their you versus otherwise it itineraries, your XXXX, contrast changes marketing the Company Thanks. contemplating or you relates behavior what's are to as changes as to assess structural

Frank Del Rio

we That's to through a our perfected mouthful, our it. thought Steve. deployment. But We itineraries, get try I'll have

XXXX And the changes we so deploy is world in in the world see major Today how don't of our in I assuming that vessels beyond, the as process re-opens. and reopening.

have vessels As primarily begins, about the you I online. we possession Asia of believe over years know, we're open. Asia time do next have be eager said, vessels. would again, fleet timing our vessels. is closed, time and to We next and be of 'XX, this market have which Like XX a season we by said the because many we still time that four only new those X take underserved it unserved that We will and but coming

we're of we anxiously and believe the those to the all vessels, will yields and accretive and financial certainly be metrics. So awaiting ROIC EBITDA the receipt which

today XXXX, to partly 'XX is trends. 'XX as start today behavior Certainly, of very, than not this at looking more looking prepared of sequentially, not for than at And back as but is to booking Delta QX consumer remarks, a the more a or QX of and meaningfully, 'XX year. said because year, much block, XXXX have we affect half, XXXX better significantly than is But any sequentially. better the booked effects on nicely. We very we up QX. were half QX of time and will our variant than a half first Turning back ramping the the in

QX the I can we today, will a the that meaningful coming second strongly same make I as ramping where 'XX. quarter in continue very those up remarks -- be vessels ahead feel operation. discipline quarter very will -- we But back QX not well. to a meaningfully, we're good will demand be We the But vessels be as -- quarter. in good XXXX, very, transition see you about in ahead price And have until an that the confidence in us XX load, gives we're load, and introduce the about only still the know, So, where do end of that X we'll in pricing. would what is pricing. by water, for that April ahead ships means between I we to but call and have going January we're the ahead about 'XX, all identical look because and load. we feel year transition X, a pivot way really with and year, have XX

So, strong. look, Advanced than I'm are I better nearly have bookings years. feeling X

about is incredible wonderful one. And than visibility into visibility into have. ever, into we further And that because mentioned ever are than -- have booking consumers in things this have One the future. industry earlier is remarks, positive the of we prepared we that I future the a very and my the visibility as

Stephen Grambling

composition in look Perhaps half of the the driving or as any on versus new provide existing new what's When color back you and strong at a that? base, trends can cruise between quick the booking follow-up. custom year, the the you to brand to

Frank Del Rio

think are normal. are it's Look, earlier. About I XX% We've repeat different slightly not our much said what higher we marketing spend. than than moderated

after, least you and And so, to go when guests. segment to best easiest market the that's you expensive go moderate, that the of marketing to tend you're and past that's our that know you spend,

getting elevated have guests, we of to promote of hopes They roll very we season. And anticipation which what not brand, good. big have for high Black in to ways Cyber an out little is Friday, you Monday. the ready very, know a promote So, to want. our We're marketing good that's a push voyage bit past

Stephen Grambling

back Thanks enough. the in so queue. Fair much. I'll jump

Operator

Montour Morgan. JP next question is Brandt from of our And

open. is line Your

Brandt Montour

third self-imposed how raise in just bit a the months? and ability quarter, caps your taking even Hey. the of exit rate color to it my the X Thanks or Frank or Good next, little morning, call occupancy you hoping nearer more coming those perhaps maybe Mark, little a I X on everyone. to talk was for out better, you maybe bit foresee term, could questions. provide about

Mark Kempa

Good line Brandt. so third Look, in quarter our was with morning, expectations.

I think XX% we occupancy. had roughly

effectively XX is carrying. to ships of our end the first And fleet than As fill we think number to at of approximately of better a we'll occupancy, operation, volume. XX% the in and We said time not I we're going When and again, time ahead entire passengers believe, in quarter. we have Rather we're quarter, price looking we're look that capacity. metric to the in have, first at just by we almost the discipline to operational that. we're quarter, want a do I continue our at maintain race and going as the look fourth

XX,XXX carried. third you're QX, roughly to QX, XXX,XXX of passengers then the in going XXX,XXX quarter, had XXX,XXX, and to I about in we X.X That's think increase XXX,XXX in roughly into the back to up million.

protect So, and that. want equity. roll is fleet our brand Pricing occupancy discipline We is protect want the important ramping time to to again, long-term we us. and with time to up said our line in We've out.

thoughtful do to So, just than customer of it that manner to occupancy. rather cheap we're point a going and that chasing gain in rational

Brandt Montour

and how Frank, Mark. is levels? as And pent-up quarter and for to levels just you onboard travel Thanks there just eventually why long of as figure some any it the I those leisure this picture, one demand if positively above impact wanted out thoughts to then is wondering to I That's follow-up, settle the forward? last reason spend. would doesn't the why that, can structural give out themes think going of helpful. Anything trying on consumer spend was a it XXXX you might and revert call

Frank Del Rio

sale. terms psyche pushing want and that quarter, they have that cruise, earlier All People on introduced people's ever hoping evidence have travel further further out of it you and they booking fact crystal ball. the for to the than Maybe that But want improves than can drastically. a they're consumer, there are is we to the available out further, based has question, your also, were though tell empirical quarter even next In bookings. no That's don't they travel. we COVID of the combination situation ever, -- one itineraries booking the demand pent-up the before. out I of maybe want or -- to this

So, I believe than having continue Then the for will going time. greater we had to some in do that past. that continue we're visibility

consumer and different onboard different lots sectors Look, it's terms up the we’ve vessels. of In -- no onboard revenue. our of spending seen are across

trends it of As more prepared that you to strength strategy. that is of definitely been We and you gives then least elevated to as that I'm know, demand. also my so well, ever in yield, We're in brands, will. cabins? in the one have our much wallet and goes we are bundling our more the where can before the pent-up doing slightly in because fourth wallet because lead pay people the fresh truisms suites, in have But you'll and it upper the pay means the the cabins percentage declare column mix balcony put industry spend even than the permanent further onboard. this if ready and quarter just and it more at those and Is and the refill of by sense get time the reason remarks continue a of cabin see in that And categories, the to business even is onboard of make not quarter booking bundling will who them the or very sold are once in industry-leading believe higher it the spending three very they the fundamental onboard out you in wide third too the to bundling across combination more more the margin a it strategy. because why continues. victory early, fresher, in people it's onboard of that revenue positive revenue very they've because of yield I cautioned that -- onboard

the it I'm to or the permanent industry you beyond a we've contributing permanent to onboard up We'll that just continues. factors fill of little possible if what these wanted on. above continuation. caution and wind all to But do as bit the to so, that not chalk will, of I hope a the spend. shift, are ready a fuel source revenue I higher everything to always it And led

Mark Kempa

naive settling. just see piece And us. heavily to another We really not the has sell. the said, on what on we But one we'd getting smarter Brandt onboard years -- working our of be getting cycle. we in not around of just a to think propellant bundling. We're there's marketing booking bearing is some additional throughout fruit But couple that only to systems Again, ago color there be one be pre are that to started that the going think XXXX. and Frank I going some as that's help started to smarter

Brandt Montour

for the thoughts, Excellent. guys. Thanks

Operator

And our from Cleveland question Vince of is Ciepiel next Research.

open. is line Your

Vince Ciepiel

my taking just for question. Thanks curious. I'm

the business up. sounds put exiting this side of opportunity some ramps prices alluded fuel the do are pre you You are occupancy pricings the back year, the were efficiencies quite business, on the and higher like within moving What but pieces as things the hopefully other they your strong, it and you 'XX, in next relates to pressures Curious Thanks. to going are can than to margins in think margin more normal. even think -COVID? you into gained is if cost

Frank Del Rio

it -great recession, in a Hey. not for that Hi, again than and margin up We've discipline. recession and we to improvement. have It's time later. later recovered their ROIC the more important to saw as I There seen still or decade setting that dropped decade nicely companies we're who during takes XXXX back pre great pricing have keep yields, ourselves Vince. prices Look, yet think XXXX years. some time a are expansion quite and

order maintaining long-term along drive fact balcony in going Vessel, that on margins short-term the the be factors pricing. pricing. the to we fixated X are of to the Norwegian increasing the of pricing load including are we're Prima end vessels that our sacrifice So introducing -- to And of New premium, is long-term XX%. our premium at we're percentage cabins, day what's with We'll preserve to going accommodations more

have we've see the including lot are using general we got being Mark the as is inflation But called mentioned: Mark times, into all a the primarily we during Zoom fuel, gotten market world. translating seeing high as And business, But becoming that inflationary Yes, food. out fact pressures Marketing line fixed those on smarter so are power. how were efficient. have whether customers inflation. getting it the we're are transitory so-called the items some pressures factors, during we we'll or And we our to that pandemic technologies: transitory that a And and mentioned, pretty pricing yields. more about we we ahead. -- is pricing cost that not. is inflation commodities, word that Pricing of power we power come have

late Generally forward, be is that And 'XX, online. XX% capacity that our on to speaking, to we're efficient more basis. margins tends anywhere should on in believe a new comes those improve. capacity. on So the It 'XX new unit XX% bringing from we events

tailwind -- us and as some So move we some profile, that for there's can forward growth think tremendous provides we our I there. inherently with opportunity

Vince Ciepiel

Great, And the relative were losing [Indiscernible], as land-based interested thanks. I alternatives. thought to follow-up that, to

being what gap. XXXX leisure of prices any ahead of any amount curious If qualify that levels, to see for towards XX% they of mean land-based or good at way way if a quantify and you it hotel were yield? relative XX%, moving Do a significant to there's you value to land-based can parity look opportunity,

Frank Del Rio

Look, think almost it do a brand. I there's and brand great have opportunity to you by

of way experience. provide consumers still that's you giving The some Cruise that Hotel industry that internal Hotel, compare the their is. ships and to always the a attractive of away You vacation, stay we drinks, to into the I cruise want is the just can always Norwegian accommodations, entertainment, a want full, meals, that your to a to because therefore continue the you vacations off ships is cruise we when a your to our that value a consumers you can't very can't Four total chains, are claw proposition, But do all at the value are -- perhaps opportunity region in which back we cost we're the hotel a great to full we charts. vacation that full. transportation, value compare are want tell And to why with it. is say offering combine market. a where And the but value, Seasons always opportunity that while location any analysis of rooms share

Mark Kempa

And claw bottom that line. that to majority compare the dollar we drops can every directly in back vast we The gap.

quickly. really pretty becomes this it really driver economic So bottom-line

So very we're on focused that. So,

Vince Ciepiel

Thanks color. the all for

Operator

next of our from question Wieczynski is Stifel. Steve And

Your line is open.

Steve Wieczynski

Hey, morning. Good guys.

a the about you normalized another the ask I'm path going on like their obviously of to third to seems that Meaning question parents year. most quarter it It I'm Frank getting vaccine that more. wondering demographic, get next kids to you back load factors just little a load that could So kids. talked to the you if factors debatable about bit of going speak, around lot is so are seems and not vaccinated. elaborate kind of

So starting case? relaxed January, to in to for kids normal, to get won't us questions CSO I the your guess load you do the factors And help that maybe vaccine yourself bridge once the if back see order case, this be that's or relax actual eventually is just here in is, gap. potentially mandate that not that

Frank Del Rio

we Yeah. extended This our XXX% requirement. -- I very don't vaccination that -- we're announce indefinitely soon have very, going to

that our brands. competitive to today to X think be a that I continues advantage

approval COVID just be crisis think yesterday. old early on. sometime health to XX to for eye of this we that vaccination The on for something etc., and stands from vaccinations, emerge in is our X announced understanding consumer's four-year-old. were a strong brands will much in the to because better vaccination in build our and I children's it's safety, same QX, the want up that likely given year My X standing

we then and cruise. cruises market one that will So don't I cruiser intends target significantly again a to intend than likely than who that vaccinated be cruise Time or believe more number more is one to and where those to who the is do general population past a time vaccinated see.

situation. sacrifice self-selection also anyone we're of translate is I load. X not a will point or whatever for X adding or to going But of number into children. a safety of or and the health bit sake believe to the that a it's So the

the as a vaccination will ought that's science what do. mandating we XXX% we So continue as long dictate to that

Steve Wieczynski

Understood. Thanks for that.

booking -pandemic bit bookings. moved are that And higher I'm good to is driving And uplift direct the that's else seems now that? something and as what just to that the Second change is well have maybe -- wondering that's question are of patterns right causing us direct? guys around seeing from something relative you kind if would this what long-term levels. it pre is And bookings you a direct it outside be could potentially think in or

Frank Del Rio

full work, and -- also that public of go and We're Wall back can't. mostly travel smaller agent we're companies community They've of out big in as been cruise are force. billions the it can seen Street unlike hoping the and dollars, we've to comes well. these businesses raise that

back. But improvements sequentially of come the that believe percentage our take have of with we But they to that any end we how have engage I'm to so do praying channel. quarter-by-quarter agency the the technology, It come day, they terms do offer operation, consumers We've booked being by travel and in is I wherewithal travel we prefer And is we to in prepared, coming we the back. is the once It back business We we seen way choices not, force. our if peers, agents. vessels do is we can, at fill have that that our with in in and our back And channel. fleet have the adapted, hoping that us. of will our biggest along bookings. of multiple full are of the

Steve Wieczynski

Okay. Thanks, color. Appreciate Great. guys. the

Operator

And is our next Citi. question Ainley James of from

Your line is open.

James Ainley

the garnering are suggest should please? color stronger ask my I brands demand [Indiscernible] you performances? for you scales, attracting you're the spreading to that the brand that that Great. something question. stack down brand seeing taking on I Thanks the Could interest. higher-end maybe much seeing out Is been have or for some guess be

Frank Del Rio

brands, than in brands luxury are exotic for contemporary because the their itineraries the Well booked the typically brands, there process. the more upscale planning out look, further longer,

into throughout and XXXX would that especially 'XX than in ecosystem. booking brand customer do but -- The back for the into ever. Norwegian, seeing the in normally is we half steady 'XX, Ocean booking they we're book, more visibility except progress we that of Norwegian better do and brands as so, and have the Regent than And volume coming on second all

go vaccinated. the year, into I is pandemic being with earlier, and to in said shots have first may internationally to we'll to to to equal, said like individual years, world out feel they very one cruise, UK, the the first starts learn day. went see take better can and as the confident have time weeks. I to consumers want away the we're for that live example. QX They to And of in COVID more population. to experts almost cruiser with to went from have if else to the the parts I that like went year to in cruise last to the background, It QX threat fade people is pleased next X COVID New population, in target all am few to COVID York for better and will -- and the is the demand they're being encouraged pan so how able I adapted. everything And different COVID the average earlier time than cruising afford than that, in I going said I Because flu. booster such traveled I how, cruise, the being an for it. a a have the every the do versed Italy, epidemic, not We of of But all ever-present

all is those not that again, so will to pandemic But going never to I'm or live COVID with points, we disappear. it. the learn to go is away the going encouraged And

James Ainley

the for can the but new restrictions. and that focal Seven looking Thank to Regent enough customer go majority ships cruise, Seas I'm about variety reason it's them you of handling you a and today? to offer I there's back the you're something how you you. do is sort And different to as asking want able but operating you come your And of to? can feel as given kind a ask restrictions you Are of follow-up, sail then loyal for might one of something see places the state

Frank Del Rio

but of is way -- based the longer haphazardly the -- short are ports. The on vessels our the the return availability not answer yes. of measured answer very is a in answer staging we're We

that South April our Alaska And beginning the 'XX time QX, we today closure that so, be By operating, QX and are early and in sailing cruise that QX the throughout exotic QX to time fleet seeing believe very the places by Xst, open. be to will start we the seasonal Asia, industry will We on which the being is in will by you in heavily throughout that of nature get abate. Europe believe America. then of world the we that entire

are are make lot of operations big the full. Company, second And suites, our of seeing which It's deal. with balconies in said, the and secret time will a the times so believe that have one because that that many wonderful of we yielding yes, highest by a yields yielding Company itineraries today itineraries that go ingredients back pressures driver I vessels our the all subside that those as to we're sauce after are cabins itinerary. We high with is

James Ainley

much. you Thank very Great.

Frank Del Rio

more time Operator, I for X question. welcome. have You're think we

Operator

Yes.

from is Farley last UBS. Our Robin of question

open. is Your line

Robin Farley

balance question. thanks. ask Great, to sheet a I wanted

just curious You a the paying on range the thinking. then leverage mentioned want to focus sheet undrawn. balance before I'm in why the you there's if to targeted sheet. the facility is, on billion-dollar you're balance And that slides return wondering I'm dividends related

curious Thanks. that to setting maturities have in years. big flow next so I'm the positive up. just you X and behind no You're close cash

Mark Kempa

Good range. " X/X below Pre the to morning, Robin. when X then sight going and we But to on to get lost had below goal to And goal covering get our X/X, was that first to our mid-term, X at be target of -pandemic first that. targeted is to X, leverage. we Yeah, think get near going "let's we're and the we X. haven't look I get, said

to management to do going into it. and times. to year-after-year to back before. to how get It's that, cash on down it, is with focused that there going chop it continue it we're done know we're So accelerating X some take do team. We've X, down but time that We flows

So confident we're we can there. get

business. We ability in the have the

of it forward, a remarks is management. around as that low now terms at taking not and commitment action think picture. In it. us I balance What really permanent having will commit and out balance go offensive us to dilution. on and/or I books than look, an rather that, we the of yet going to low-cost sheet more look further allow very is we're which broader some our on look to debt start to sheet to but the -- effective my into backstop necessarily have cost do draw Again, measure independently we worry this we billion-dollar stated in extremely to approach a have about does permanent as not I it's intend the

not is to draw intention it. Our on

We nature. the papers have event some to much the as than is plan. Most after draw likely, on it more the of likely, larger to cost-effective. and that But we game in need facility would go part we something or out there go our or in more public that markets

for backstop one [Indiscernible] seen additional debt make long-term to ahead that and our a Delta of we additional position of been without in sure think a unknown. look we needs, be we're all any always does some of again, is want So, what we've And provides this us to committing balancing in dilution. the thought

So is going sheet offensive go-forward our balance a approach again, this to more us on terms of an in basis. of

Robin Farley

cruise Thanks. final Are Okay, great. realize cancel -- credits you cruise, to to there's we I one not future issuing now not probably That when back Can which thing. just the makes have you -- sense. again,

Frank Del Rio

XXXX was. either I the I than sorry, much I'm in of that, earlier of the We the the No. it think quarter XXXX. end in or -- first stopped at first Actually, quarter mid-XXXX, believe that. --

second want So future of probably we have not XX. quarter ish - credits. issued say cruise to I

Robin Farley

Okay.

Mark Kempa

that slightly, but speaking, I their timeframe. off was the might generally be

Robin Farley

Great. Okay. you. Thank

Frank Del Rio

Robin. you, and you, And for today. thank everyone support Thank your time

We great will little safe. be your day a of and Have available questions to on. answer later any a stay

Mark Kempa

Bye bye. you, Thank everyone.

Operator

And today's Call. this concludes Conference

You may now disconnect.

Norwegian Cruise Line (NCLH) 3 Nov 212021 Q3 Earnings call transcript