In a recent report, Susquehanna Financial Group reports that meetings with the management
teams of CCL, NCLH, and RCL underscored its bullish stance on the cruise business, fueled by "improving net yields, moderate capacity growth and improving geographic diversification.”
This is just one of many recent reports that underscore positive themes on the cruise business, but Susquehanna's content has positive ramifications for the trade. Some highlights from their meetings:
Improved data-mining: “This allows the companies to target the right cruise to the right customer on the right occasion.”
More pricing discipline: "We expect to see operators renew their focus on yielding up as the booking window shortens and in some cases even be willing to sacrifice small amounts of occupancy to enforce pricing discipline.”
Spending Trend Reversal: “Onboard spend has outpaced ticket prices for the last 3 years. We believe this trend could reverse itself later in the year as companies focus on bundling packages - offering more, 'free, free, free' - instead of cutting price.”
Cruise Week recalled the words from Avoya Travel co-President Brad Anderson in a recent interview: “I think all the products are still radically undervalued, so the quicker we can get fair return for the value of the product, minimize NCFs, book faster, everyone will sell more cruises. One of the problems is there are an awful lot of agencies out there on the mass market side who want to sell land, because they make more money, the customers come back happy so they book land again.”
Assuming that ticket prices go up and the value-add strategies by some lines continue and strengthen (essentially undoing some of the NCFs) this trend might be reversed, with both suppliers and sellers benefiting.