CruiseAs passengers return to the seas this summer, many are doing so with a pent-up desire not just to cruise but to spend.

From bar to spa, onboard cruise spend gets enthusiastic

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Onboard revenue was through the roof when Norwegian Jade began sailing in the Mediterranean, said Frank Del Rio, CEO of Norwegian Cruise Line Holdings.
Onboard revenue was through the roof when Norwegian Jade began sailing in the Mediterranean, said Frank Del Rio, CEO of Norwegian Cruise Line Holdings. Photo Credit: Norwegian Cruise Line Holdings

Cruise companies are reporting record per-passenger onboard sales, bringing a welcome lift to revenues in a year otherwise defined by significantly reduced capacity and departures.

Why have purse strings loosened? Cruise line executives believe that cruisers, having gone so long without travelling, are making up for lost time at the bar, for shore tours, at the spa and in the casino.

Royal Caribbean Group and Norwegian Cruise Line Holdings (NCLH) both said during earnings calls in August that that high onboard spending had pushed profits on early, low-capacity sailings.

Jason Liberty, Royal's CFO, cited "record onboard revenue" on those ships.

"This is very encouraging as we are not only seeing pent-up demand for cruises, but we are also seeing pent-up demand for our onboard revenue experiences. Guests are really enjoying our shore excursions, casinos, spas and restaurants after spending a year in isolation," Liberty said. "We are also seeing an increased demand for our wi-fi services as more and more consumers have flexibility to take vacations and work remotely."

Frank Del Rio, CEO of NCLH, said that on the Norwegian Jade sailings in the Mediterranean, "onboard revenue was through the roof" and "significantly exceeded our target, which was focused on 2019 actual results, by over 50%."

Windstar Cruises, which launched ships in the Caribbean and Europe in June, said that its sailings experienced "strong spending onboard and are typically surpassing goals."

Bar revenue on its ships is up by more than 30% compared with pre-pandemic sailings, and most people are booking beverage packages, the line said. Shore excursion purchases are up, and the Star Boutique, the new and expanded shop on Windstar's recently renovated Star Breeze, is "exceeding sales goals by more than 25% on a daily basis."

American Cruise Line's vice president of trade relations, Susan Shultz-Gelino, said that the line has seen "an increase in guests booking our more specialised excursions, which cost extra... Plus many guests are extending their cruises by upgrading from our one-night complimentary hotel stays to longer pre- and post-cruise packages.

"Demand for super-unique, small-group experiences is booming," she said.

NCLH's onboard revenue spike is based on the one ship it had sailing at the time it reported Q2 earnings, the Norwegian Jade. CFO Mark Kempa said the comparison was to a similar itinerary from 2019, a record year for onboard spending. The Jade's passengers were predominantly from the U.S., followed by Europeans.

"When you look at the spending trends, it was in your normal areas," he said. "Shore excursions were very intense, food and beverage and then casino.

Source: Travel Weekly

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