Cruise lines may counter virus-related losses with incentives

Cruise lines may counter virus-related losses with incentives

Cruise lines facing a global bookings downturn because of
the coronavirus Covid-19 outbreak may start offering incentives.

Norwegian Cruise Line Holdings CEO Frank del Rio said during
the company’s earnings call Thursday that the outbreak has caused a slowdown in new
bookings
and increased cancellations across its global fleet.  

“You will see yields decrease and pricing deterioration in
the short term,” CEO Frank del Rio said during this week’s earnings call. 

To counter that, he said that the NCLH brands (Norwegian
Cruise Line, Oceania and Regent Seven Seas Cruises) will try to stimulate
bookings. 

“We can’t stick our head in sands and say we’re not going to
respond,” he said. “We’ll compete for that elusive customer. We’ll do it in a way
that price is not the main driver. But you will see a combination of pricing
action from us but heavily skewed toward the value proposition to lure the
customer.” 

Cruise Planners CEO Michelle Fee said there are already many
incentives right now for 2020 sailings. 

“However, since the crisis coincides with Wave Season, we
normally have many incentives happening anyway,” she said. “We are starting to
see some cruise lines offer additional incentives to help spark bookings for
the Bahamas, Caribbean, Alaska and Europe.”

Del Rio said that while the bookings impact has been “pretty
even across the board,” a deeper dive indicates that American customers are
more comfortable booking close-to-home destinations right now, like the
Caribbean (in many cases, guests can take a Caribbean cruise by driving to the
port) and even Alaska. 

“Exotic and far-flung destinations” are hurting more, he
said.

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