Key Takeaways
Americans aren’t giving up on vacations, but cruise operators say they're sticking closer to home.
Bookings for Caribbean-bound cruises remained brisk in the first three weeks of April, but trips to Europe were weak, Norwegian Cruise Line Holdings ( NCLH ) executives said on an earnings conference call Wednesday . They attributed the shifts to consumers feeling uncertain about the economy amid evolving domestic trade policies.
Royal Caribbean Group ( RCL ) also expects consumers to seek out value while planning vacations closer to home, CEO Jason Liberty said on a conference call Tuesday .
Americans "seem to be a little bit more comfortable staying closer to home, given what’s going on in the macroeconomic environment,” Norwegian CFO Mark Kemba said, according to a transcript made available by AlphaSense.
Choppiness in European cruise bookings seems to have tapered off in the final week of April, according to CEO Harry Sommer. The “short-lived weakness” suggested “some hesitancy for Americans to do long-haul trips in this environment,” Sommer said, according to the transcript.
Norwegian missed analyst expectations in its first-quarter earnings, but maintained a rosy outlook for the year ahead. The company forecasts it will have $1 billion in adjusted net income in 2025, a roughly 11% increase from the year before.
Liberty said consumer behavior hasn’t shifted, other than being a bit “more short-term focused.”
“Travel is not the first place consumers indicate they will pull back,” he said on Tuesday's call. He said Royal Caribbean was well-positioned to offer “value through a range of itinerary options from 3 to 10 days, from Florida, Texas, California, the Northeast, and the Northwest.”
The company envisions net yield—revenue minus certain costs per available passenger cruise day—increasing 2.6% to 4.6% year-over-year in 2025.
Norwegian Cruise Line shares were down nearly 8% Wednesday, while Royal Caribbean Cruises shares were down a bit less than 1%.
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