Norwegian Cruise Line Faces Choppy Waters as Consumer Confidence Wavers

MIAMI BEACH, Florida — The cruise industry is bracing for turbulence as consumer confidence takes a hit, according to Norwegian Cruise Line Holdings. CEO Harry Sommer expressed concerns about bookings for cruises to Europe from the United States during a CNBC interview on Wednesday.

“It was actually booking really, really well till about a month or two ago. And then the American consumer seemed to be a little skittish about doing far-from-home travel,” Sommer said.

Norwegian shares fell more than 7% following the company’s first-quarter earnings report, which revealed a revenue of $2.13 billion, slightly below expectations of $2.15 billion. Earnings per share adjusted to 7 cents also missed the anticipated 9 cents.

The company has adjusted its guidance for net yield growth down to a range of 2% to 3% and indicated that revenues may continue to face pressure throughout the year. However, Norwegian maintained its projections for earnings before interest, taxes, depreciation, and amortization (EBITDA), actually aiming for cost savings through better currency rates and reduced fuel prices.

Sommer reassured investors by stating that travelers often seek cruises during uncertain economic times due to their perceived value over land-based holidays. Jason Liberty, the company’s CEO, echoed this sentiment during a conference call, noting that consumers appear to prioritize experiences and are planning to spend more during their vacations this year.

Currently, Norwegian Cruise Line is 86% booked through the end of 2025, despite the recent dip in stock prices. Year-to-date, Norwegian shares have plummeted by 37%, while Royal Caribbean‘s stock has dropped approximately 6% despite better-than-expected earnings.

Sommer pointed out that onboard spending remained steady in April, indicating a return to normalcy. He concluded, “You may have a weak month or quarter, but consumers continue to take vacations. It’s sort of one of their God-given rights and they enjoy them. And they come back.”