Norwegian Cruise Line Holdings Limited (NCLH), the world’s third largest cruise shipping group, has reported a rise in third quarter and nine month net profit on strong core markets.
Net profit in the third quarter rose to $400.1 million from $342.3 million year on, while operating profit reached $336.7 million compared to $284.4 million. Revenues rose to $1.65 billion from $1.49 billion.
In the first nine months of the year, net profit rose to 661.0 million from $560.6 million and operating profit increased to $964.7 million from $822.1 million. Revenues increased to $4.41 billion from $3.75 billion,
“Strong operational performance across our core markets, bolstered by strength in European itineraries, where pricing has now exceeded the previous high watermark of 2015, drove third quarter revenue and yield growth well ahead of expectations, despite the disruptions caused by weather-related events during the quarter,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.
“Over the last several weeks we have seen consumer demand continue to accelerate for Caribbean sailings and booking volumes have now reached pre-hurricane levels. Our ships, crew and shoreside personnel have been actively engaged in assisting impacted destinations by evacuating stranded families and delivering much-needed supplies. In addition, our company has committed to providing long-term financial aid to rebuild critical infrastructure through our Hope Starts Here hurricane relief programme," he said
Royal Caribbean Cruises Ltd, (RCCL), the second largest cruise shipping group in the world, said is rolling out “an unprecedented wave of digital innovations touching every aspect of its business, charting a course for a world where travel frustrations have disappeared, erased by technology that is transforming cruise ships from stem to stern.”
Most visible to consumers through a guest-empowering app that will blanket the company’s 48-ship fleet over the next two years, the surge of innovation will also banish check-in lines at ports, equip crew members to anticipate guests’ needs, and enable giant cruise ships to sail through the water on a fuel-saving curtain of air.
“The pace of change is relentless—and so are we,” said Richard D. Fain, RCCL’s chairman and CEO said in a statement. “We are harnessing a range of technologies to enhance every facet of our business, every minute of our guests’ vacations, and every inch of the ships we build.”
Jay Schneider, RCCL’s senior vice president, digital, said one focus of RCCL’s company-wide innovation initiative is zeroing in on wasted effort and wasted energy. “We are finding ways to eliminate friction and frustration, giving guests more time to make the memories that make vacations special,” said Schneider. For example, guests will:
Board ships in the time it takes to order fries from the drive-through, skipping check-in lines thanks to facial recognition technology that knows who they are on arrival.
Sign up for shore excursions, order drinks and make dinner reservations without ever leaving their chairs by the pool thanks to an intuitive app on a device most of them already have—a smartphone.
Indulge in VR and AR experiences that transform ship spaces into virtual environments and interactive games, where stateroom ceilings might be replaced by starry skies, the walls of a restaurant can transform into the sights and sounds of an outdoor café and digital signs challenge you to play an arcade game.
“Consumers are buying experiences now, not things,” Fain said, “so we are creating ways for them to design vacations rich in made-to-order, memory-making moments, and even providing recommendations based on what they have enjoyed before or shared with us about their preferences. And with our mantra of continuous improvement, our strategy is to constantly upgrade the guest experience across the fleets of all our brands.”
The technological transformation also encompasses areas beyond the guest experience, including innovations to make ships more energy-efficient, enhance ship management and put more connectivity into the hands of crew members than ever before.
“EY is proud to be the exclusive sponsor of Sea Beyond. We understand the powerful impact and positive experiences digital transformation can create,” said Bob Patton, Americas Vice Chair of Accounts. “Working together with the Royal Caribbean team has truly been an amazing experience,” continued Patton. “We have been partners for over a decade, and are excited to continue collaborating to achieve breakthroughs in the digital innovation space.”
For guests: less friction, more time to make memories
“Our vision is to make the guest experience hassle-free, personalized and fun,” said Schneider.
One specific focus is removing time-stealing moments from the cruise experience. “Time spent in line—whether you’re waiting for your food, waiting for your bags to arrive, waiting on a table, or booking an excursion—is time stolen from your time off,” Schneider said. To return that time to guests, the company is combining technologies ranging from facial recognition to RFID tagging to GPS mapping to Bluetooth-enabled beacons to streamline boarding, manage check-ins automatically and improve wayfinding.
Many of these same technologies are being deployed to put the power to manage your vacation in the palm of your hand, said Schneider. “Our new app will make it simpler than ever to book and plan your cruise vacation from home or with a travel agent. Once on board, you can navigate our ships with interactive maps and guides, explore the ship with cool features like x-ray vision, or order drinks that can be delivered to you wherever you are on the ship.” The app, along with the next generation of the company’s WOW Bands, will also unlock guest staterooms and enable guests to control stateroom lighting and temperature.
An initial release of the cruise guest app is already available on selected ships in RCCL’s fleet. Schneider said RCCL will continue to refine the app, adding new ship-specific features and capabilities, with each subsequent release. “Our aim is to have the app enabled on about 15% of our fleet by the end of this year, and more than double that by the end of 2018,” said Schneider.
Other innovations showcased at Sea Beyond are in the “concept car” phase, said Schneider. “Sea Beyond attendees will get glimpses of what happens when we let our imaginations run wild. So think of sampling an exotic dessert where, with each bite, the entire environment changes – at least virtually. Or imagine a stateroom where you not only control the lighting and the temperature, but can change the scene from starry night to rainforest canopy or island home with the touch of a button.”
For crew: better interaction with guests and home
The innovations enriching the cruise guest experience will be complemented by a suite of tools for crews, as well. For example, the app-enabled offerings for guests will be mirrored on the crew side by mobile applications that help crew members check-in guests, complete required paperwork, track delivery of guests’ bags to their staterooms, and interact with guests and anticipate their needs throughout their vacations.
In addition, crews will have access to easier means to manage their own schedules, stay connected to friends and family while onboard, and stay connected to RCL during their off-contract periods.
“We regularly earn industry-leading guest satisfaction ratings – which is first and foremost a tribute to the outstanding work our crews do every day,” said Fain. “To continue to improve, we will put more capability to delight and surprise our guests into our crews’ hands even as we help them better manage the special challenges of being away from their homes and families while on board.”
For the RCCL fleet: smarter, safer ships and a reduced environmental footprint
Also showcased at Sea Beyond will be innovations aimed at enhancing overall ship management and improving energy efficiency.
For example, forthcoming command centers will use augmented reality to assist with navigation and maneuvering. “Think of it as enabling the nautical equivalent of flying on instruments,” said Fain. “Our ships always operate with keen sensitivity to the limitations the weather may impose. But having new means to mitigate the weather’s impacts on departures and arrivals helps us uphold schedule and itinerary commitments important to our guests,” added Fain.
In addition, in a safety-related application of the same technologies that will help servers deliver a drink to a guest anywhere on board, next generation bridge technology will allow officers to track guests on their way to muster stations to ensure all are accounted for and locate stragglers.
RCCL is also innovating to reduce fuel consumption across its fleet, which not only lowers operating costs but also lightens stack emissions that are part of cruising’s environmental footprint.
Historically, each new class of RCCL ships is significantly more fuel efficient than its predecessors as new high efficiency appliances, window tinting and improved lighting, heating and cooling technologies help reduce energy needs.
The company continues to evolve hull designs to reduce drag, an evolution most evident in the “bulbous bows” now common on cruise ships. In addition, RCCL is pioneering the use of an air lubrication system that coats the hulls of its ships with millions of microscopic air bubbles to further reduce resistance and drag. In initial uses, air lubrication has reduced fuel consumption at speed by 7% to 8%
Complementing RCCL’s energy conservation efforts are initiatives to use alternative energy sources. Some RCCL ships are already equipped with solar panels that generate sufficient power for limited onboard needs. At Sea Beyond, RCL will be previewing the use of fuel cells for power generation. Fuel cell use could fundamentally change ship design by distributing power sources throughout the ship.
Furthermore, adoption of fuel cells would also mean producing less energy from diesel generators, reducing ships’ environmental footprints. The company is planning fuel cell experiments on existing ships, with an eye to extensive use of fuel cells and liquefied natural gas (LNG) propulsion on its upcoming Icon class of ships. “We are fully embracing the expectation that we run an environmentally sustainable business,” said Fain. “Experimenting with new ways to power our ships is just part of our broad commitment to being a responsible environmental steward.”
Carnival Cruise Line, the US focused mass market unit of Carnival Corporation & plc, said it has signed an agreement with Shell, the Anglo-Dutch energy major, to be its supplier of marine liquefied natural gas (LNG) to power North America’s first fully LNG-powered cruise ships.
Shell is also supplying LNG to Carnival group in Europe.
“Under this framework agreement, Shell will supply Carnival Cruise Line with fuel for its two new LNG-powered ships expected to launch in 2020 and 2022 and to be homeported in North America,” Carnival said in a statement.
As part of the agreement, the two ships, built with a next-generation "green cruising" ship design, will be fueled through Shell’s LNG Bunker Barge (LBB) – a project announced earlier this week as part of Shell’s strategic plan to develop a global LNG bunkering network. The ocean-going LBB, which is designed to support growing cruise line demand for LNG as a marine fuel, will be the first of its kind in the U.S. and will allow these ships to refuel with LNG at ports along the southern U.S. East Coast.
“This agreement is a significant stepping stone in our relationship with Carnival Corporation building upon our previous LNG marine fuel supply agreements in Europe,” said Tahir Faruqui, president, Shell NA LNG, LLC. “It also marks a milestone as we continue to establish the marine LNG fuel market in the U.S. as a credible part of the global marine fuel mix.”
The two new Carnival Cruise Line vessels will be fully powered by LNG both while in port and at sea – an industry first and an environmental breakthrough that will improve air quality with cleaner emissions and produce the most efficient ships in company history. The 180,000 gross ton ships will be the largest ships in Carnival Cruise Line’s fleet with an approximate passenger capacity of 5,200 based on double occupancy.
“Carnival Cruise Line is strongly committed to leading the way in the implementation of technology innovations to help protect the environment and support our aggressive sustainability goals,” said Christine Duffy, president of Carnival Cruise Line. “Our two new cruise ships entering service in 2020 and 2022 will not only be the largest and most technologically advanced in our fleet but will break extraordinary new ground as the first LNG-powered cruise ships in North America.”
Added Tom Strang, senior vice president of maritime affairs for Carnival Corporation, “We are proud to be on the forefront of advancing LNG as a fuel source for the cruise industry. One of the keys to establishing LNG as a standard for powering cruise ships is building out an extensive, safe and reliable infrastructure across the globe for this clean burning fossil fuel. We are looking forward to working closely with Shell as they help to bring LNG to North America in what we hope will be the first step in building a strong foundation for the future of LNG fuel supply for cruise ships in the region.”
This agreement builds on the partnership established between Carnival Corporation's AIDA Cruises brand and Shell in April of 2016 to supply its AIDAprima ship with LNG to power the vessel while docked. AIDAprima is the first cruise ship in the world to use LNG while in port, leading to a major reduction in emissions.
Lindblad Expedition Holdings, Inc., the US based and listed expedition cruise and tour operator, said it expects 2017 adjusted EBITDA in the bracket of $42 million to $44 million.
“This outlook includes the estimated $3.6 million revenue impact and $3.0 million Adjusted EBITDA impact associated with the cancellation of four voyages during the third quarter due to the delayed launch of the National Geographic Quest,” the company said in a statement.
“The current outlook also includes the estimated $8.9 million revenue impact and estimated $6.2 million Adjusted EBITDA impact associated with the first quarter cancellation of four voyages on the National Geographic Orion and two voyages on the National Geographic Sea Lion for necessary repairs,” Lindblad said.
At the end of October, the Lindblad segment had 99% of full year 2017 projected guest ticket revenues on the books versus 101% of full year 2016 revenue at the same time last year. Overall, bookings thus far in 2017 have increased over 30% compared with the same period a year ago. “The Company continues to anticipate it will achieve its long-range revenue and Adjusted EBITDA targets,” Lindblad said.
Lindblad Expedition Holdings, Inc. the US based and listed expedition cruise operator, said its net income for the third quarter rose to $9.3 million, $0.20 per diluted share, as compared with $7.4 million, $0.16 per diluted share, in the third quarter of 2016 as growth in the expedition market starts to deliver stronger results.
Revenues rose to $87.4 million from $70.7 million and adjusted EBITDA to $23.1 million from $17.4 million
“The $1.9 million improvement (in net profit) was primarily due to the higher operating results as well as lower depreciation and amortization due mainly to the accelerated depreciation associated with the retirement of the National Geographic Endeavour a year ago,” the company said in a statement.
The latest quarter of 2017 also includes $1.7 million of additional stock-based compensation expense primarily related to grants under the 2016 CEO Share Allocation Plan, which provides the group CEO the ability to transfer shares from his existing holdings in the company to eligible employees, as well as $1.4 million in executive severance expense.
Sven-Olof Lindblad, President and Chief Executive Officer, said "Lindblad's strategic investment to expand our capacity to capitalize on the rapidly growing demand for expedition travel has begun to deliver significant returns. Bookings in 2017 are up over 30% versus a year ago and the Company delivered strong third quarter financial growth fuelled by the July launch of our first new-build vessel, the National Geographic Quest, while at the same time maintaining high occupancy levels across our existing fleet.”
“ This is only the first step in expanding our inventory and we are well under way on construction of her sister ship, the National Geographic Venture, which will be delivered in the fourth quarter of 2018. We also announced this morning that we have signed a contract for a new, state-of-the-art, polar ice class vessel. This contract includes options for two additional ships and these vessels will enable us to further immerse our guests in unique and authentic itineraries and broaden our ability to build additional shareholder value in the years to come," he said.