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Norwegian Cruise (NCLH) Stock Up on U.S. Cruise Resumption Plan

·3 min read

The long wait for cruising to return to the United States is finally coming to an end. Norwegian Cruise Line Holdings Ltd. NCLH recently announced that it will resume cruising to Alaska from Seattle, beginning Aug 7, 2021. Following the news, the company’s shares gained 4.7% on May 24.

The company is expected to receive a Conditional Sailing Certificate from the U.S. Centers for Disease Control and Prevention (“CDC”) in the coming days. Notably, all guest and crew members need to be fully vaccinated for cruising. The company is also required to implement multi-layered SailSAFE health and safety program.

Frank Del Rio, president and CEO of Norwegian Cruise said “We look forward to re-starting the broad cruise ecosystem which supports thousands of American jobs and welcoming our guests back onboard to create memories of a lifetime.”

In April, the company announced that it is planning to resume cruise operations for voyages boarding outside of the United States with sailings originating in Jamaica, Dominican Republic and Greece starting in July 2021 with Norwegian Joy, Jade and Gem.

Moreover, starting Jul 25, 2021, the company will initially provide seven-day cruises to the Greek Isles on Norwegian Jade from Athens (Piraeus). The company will also offer seven-day Caribbean journeys originating in Montego Bay, Jamaica beginning Aug 7, 2021 on Norwegian Joy and from La Romana, Dominican Republic on Norwegian Gem commencing Aug 15, 2021.


Stock Performance

Shares of the company have gained 29.5% in the past six months, compared with the industry’s rally of 19.2%. The coronavirus pandemic has severely impacted the company’s booking. While overall booking volumes remain below historical levels, it has been registering solid demand for future cruise vacations. Despite reduced sales and marketing investments, bookings have been strong, resulting in a prolonged booking window with guests booking further into the future.

Although the company invested lesser on sales and marketing, and the entire travel industry has not been working at full strength; the company has observed pent-up demand on its booking volumes. During first-quarter 2021, overall bookings, net of cancellations, were more than double the volumes during the prior quarter. The company expects this positive demand trend to continue across all brands though 2022.

Zacks Rank & A Key Pick

Norwegian Cruise — which shares space with Carnival Corporation & Plc CCL and Royal Caribbean Group RCL in the Zacks Leisure and Recreation Services industry — has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked stock in the same space is RCI Hospitality Holdings, Inc. RICK, which sports a Zacks Rank #1.

RCI Hospitality fiscal 2021 earnings are expected to soar 405.9%.

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