Q1 2025 Norwegian Cruise Line Holdings Ltd Earnings Call
Good morning, and welcome to the Norwegian Cruise line Holdings first quarter 2025 earnings Conference call. My name is Donna and I will be your operator at this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions for the session will follow at that time.
If anyone should require assistance during the conference. Please press Star then zero on your Touchtone phone.
As a reminder to all participants this conference is being recorded.
I would now like to turn the conference over to your host Sara and then Mr. Edman. Please proceed.
Speaker Change: Thank you Donna and good morning, everyone. Thanks for joining us for our first quarter 2025 earnings and business update call I'm joined today by Harry Sommer, President and CEO of Norwegian Cruise line Holdings, Mark Kempa Executive Vice President and Chief Financial Officer.
Speaker Change: As a reminder, this conference call is being simultaneously webcast on the company's Investor Relations website. We will also make reference to a slide presentation. During the call, which can also be found on our website.
Speaker Change: The conference call and presentation will be available for replay for 30 days following the call before we begin I would like to cover a few items.
Speaker Change: Our press release for the first quarter 'twenty 'twenty. One 'twenty 25 results was issued this morning and is available on our website. This call includes forward looking statements that involve risks and uncertainties that could cause our actual results to differ materially from such statements.
Speaker Change: These statements should be considered in conjunction with the cautionary statement contained in our earnings release.
Speaker Change: Comments may also reference non-GAAP financial measures, a reconciliation to semester actually comparable GAAP financial measure and other associated disclosures are contained in our earnings release and presentation unless otherwise noted all references to 2025 net yield and adjusted net cruise cost excluding fuel per capacity day are on a constant currency basis and <unk>.
Speaker Change: Parents are to the same period in 2024 with that I'd like to turn the call over to our CEO, Harry Sommer Harry well.
Harry Sommer: Well, thank you Sarah and good morning, everyone welcome to our first quarter 2025 earnings call.
Harry Sommer: Today I'll begin my comments with highlights from our strong first quarter results, where we essentially met or exceeded guidance across all key metrics.
Harry Sommer: And while we are quite pleased with our near term results. We continue to keep our focus firmly on our longer term charting the course targets. So I will discuss a number of initiatives. We are undertaking to deliver long term value to our shareholders through our proven strategy of balancing return on investment or ROI with return I'm experience or <unk>.
Harry Sommer: Some of the more important initiatives include the delivery of our groundbreaking new ship Norwegian Aqua, the recently announced enhancements for great Stirrup Cay and multiple projects underpinning our strategic fleet optimization efforts I'll wrap up with an update on booking trends and how we are navigating the current environment before turning the call back over to Mark.
Harry Sommer: Paul will provide more detailed commentary on our results and discuss our outlook for the second quarter and full year 2025.
Speaker Change: Starting on slide four I'd like to highlight the strong start to the year, our first quarter met or exceeded all key expectations. We outlined in February most importantly, net yields increased one 2% above our expectations and coupled with better than expected unit cost drove adjusted EBITDA to 453 million.
Speaker Change: Also above guidance. This brings our trailing 12 month margin to 35, 5%, a 280 basis point improvement over last year and well on our way to our long term targets lastly, adjusted EPS ended the quarter at seven slightly below guidance driven by a five cent FX hedge.
Speaker Change: Right.
Speaker Change: Moving to slide five let's take a look at one of our key initiatives for the quarter the delivery of Norwegian Aqua <unk>, the first ship and Norwegian cruise lines, New premium plus class.
Speaker Change: We took delivery of Aqua in March on time and on budget, continuing our track record within Kent CRE. That's now six ships in a row all delivered as planned.
Speaker Change: To their team and our incredible Newbuild organization.
Speaker Change: After her delivery, we plowed proudly showcased or in Europe before arriving in Miami, just a few weeks ago for her christening by her Godfather Emmy Award winning actor Eric Stone Street.
Speaker Change: Aqua is the first ship shaped by our current management team and reflects our focus on balancing ROI and ROE ex from design tool entities. Each decision was made to improve the guest experience. While also considering the impact on margin and return.
Speaker Change: Norwegian Aqua is 10% larger than our sister Prima class ships and perfectly combines ncl's one of a kind service and offerings with guests first experiences that will make new waves at sea.
Speaker Change: And Aqua, we took the strong foundation of freemen, Veeva and elevated it we redesigned our re imagine nearly 30 spaces everything from the layout and flow to enhancements in our dining venues and entirely new offerings. One standout example is replacing the go kart racetrack with the Aqua fly coaster.
Speaker Change: This innovative offering not only adds a thrilling new signature experience.
Speaker Change: It also takes up less space on the racetrack freeing up room to increase stay room capacity and add additional activities and amenities and the Aqua slide closer it's been a huge hit already garnering more than 270 million views across our traditional and social media platforms are powerful early signal that Aqua is.
Speaker Change: <unk> generated excitement and buzz.
Speaker Change: So we get off was an example of what this team can accomplish when we stay true to our vision of having our guest vacation better and experience more and keep our ROI and ROE ex philosophy at the center of our decision, making guests are happy and the company's optimizing its financial performance.
Speaker Change: Turning to slide six I'd like to highlight the exciting new developments at great Stirrup Cay, our private island in the Bahamas, which we announced just a few weeks ago during Norwegian Aqua christening.
Speaker Change: As many of you know great Stirrup Cay is already one of our highest rated Portugal and we're about to take the experience to the next level. Later this year, we'll complete construction on a new peer that will allow us to talk to ship simultaneously and eliminate the need for tendering, which can be particularly challenging during the winter months with this new.
Structure in place and increased Caribbean capacity in the years ahead, we expect to welcome more than 1 million guests annually to the islands starting in 2026.
Speaker Change: To support that growth and elevate the overall experience, we've announced a series of new enhancements, which will open concurrently with the new Pir.
Speaker Change: Include a large resort style pool was swapped borrowing cabanas, a welcome center and a new <unk> system for easier access across the island.
Speaker Change: We are also bringing the popular and exclusive adult only by Beach club from several of Ncl's vessels to the island, while also adding horizon low lagoon, a dedicated families zone, featuring a flashback and interactive play area.
Speaker Change: These additions are thoughtfully designed to drive higher guest satisfaction, providing facilities for new experiences and opportunities for stronger overall customer spend.
Speaker Change: We're confident these upgrades will further differentiate our Caribbean product and enhance our ability to drive incremental yield on itineraries that call on great Stirrup Cay, but this is just the beginning as we bring more capacity into the region. We will continue to evaluate opportunities to continue improving the island experience I'm excited to see these plans come to life.
Speaker Change: And look forward to welcome him even more guests to the island in the years ahead.
Speaker Change: In addition to enhancing the in real life experiences on our vessels and island I want to highlight a major success story that demonstrates our ability to enhance our guest experience digitally with our revamped NCL App, we completed the full rollout across the Norwegian fleet in January retiring all legacy platforms and the response has been.
Speaker Change: Mendes over 800000 guests logins during the quarter do you have does more than provide practical tools like ship maps and folio views, which reduced onboard service lines. It also proving to be a powerful pre cruise revenue driver a growing majority of our guests are logging in before the crews using the app to book things like <unk>.
Speaker Change: Sure excursion and specialty dining in advance this provides us with consumer insights, which we can use to further personalized marketing and also lift pre booked onboard spend which then creates a stickier guests and our customer ecosystem.
Speaker Change: We're incredibly excited about the progress we're making on the digital front and confident this platform will continue to enhance both upsell opportunities and the guest experience going forward.
Speaker Change: Turning to slide seven during the quarter. We also made significant progress on our broader fleet management strategy, which centers on three key pillars, breaking new ships online investigate and modernizing our existing fleet and thoughtfully repurposing older tonnage.
Speaker Change: We already covered Aqua delivery I want to highlight the progress we have made modernizing our existing fleet. This quarter, we completed dry docks for Norwegian Bliss and Norwegian breakaway each introducing new guest focus enhancements on breakaway we debuted the silver screen bistro, the first immersive cinema and dining experience at sea.
Speaker Change: We also expanded state room capacity, including in the Haven expanded our most popular specialty restaurants and expanded both premium and free guest experiences on both ships. These.
Speaker Change: These investments reflect our commitment to enhancing what matters most to our guests while continuing to focus on financial returns.
Speaker Change: Finally on the final pillar of our fleet management strategy, which is thoughtful repurposing of older tonnage. We had several important milestones during the quarter signing agreements for two Norwegian cruise line vessels, Norwegian Sky and Norwegian Sun to be chartered to Cordelia cruises, a premium operator in India beginning in 2026.
Speaker Change: 2027, respectively. We also reached agreement for Regent, seven seas, navigator and oceana as insignia to be chartered to pregnancies residential cruise line also beginning in 2026 and 2027.
Speaker Change: These agreements are a clear reflection of our disciplined long term approach to fleet optimization by transitioning these ships into markets outside our core business with established operators in their respective areas, we're able to unlock value from these assets, while remaining focused on delivering a consistent high quality experience.
Speaker Change: Across the remainder of each fleet and our three brands.
Importantly, these transactions allow us to simplify our operations reduced the average age of our fleet and drive further efficiencies all while continuing to receive cash flow from these assets under charter our projected capacity CAGR from 2023, and 2028 now moves from 6% to 4% after.
Speaker Change: Factoring in the shifts exiting the fleet. This is a smart strategic evolution of our fleet that supports our long term financial operational goals and one that positions us well for the years ahead.
Speaker Change: Moving on to booking trends on slide eight advanced ticket sales were up 3% as well as shown on slide nine while other key indicators such as cancellation rate and crews next sales and onboard revenue remained steady during the quarter and in the first weeks of April looking at the remainder of the year cruises for Q2 are nearly all fall and well.
Speaker Change: And our final payment and cancellation window. So onboard revenue is the main remaining variable, which as I mentioned continued strong.
Speaker Change: As macroeconomic uncertainty has increased we have seen some choppiness in bookings on the remaining Q3 inventory, resulting in a headwind to occupancy where we are prioritizing price overload factor believes has the potential for upside if conditions improve by protecting price. This allows us to garner harder higher yields on the remaining inventory.
Speaker Change: If conditions improve while also allowing us to protect price in the future.
Speaker Change: As we look into Q4 recall, our Caribbean capacity is up 10% year over year and represents 40% of our quarterly deployment. This results in a shorter booking curve. So our book position for the next 12 months has shifted slightly but continues to be within our optimal range and above historical averages looking forward, we expect our.
Speaker Change: <unk> expansion of more close to home itineraries, especially coupled with our recent great stirrup Cay enhancements to fundamentally improve our demand profile in the mid to long term as a result, we see potential for pressure on our topline and are modifying our full year net yield growth outlook to be a range of 2% to 3%.
Speaker Change: This guidance recognizes the reality of the situation as it exists today and also reflects our assumption that the consumer environment stabilizes as the year progresses well.
Speaker Change: While we recognize potential pressures on the top line, we are maintaining our full year 2025, adjusted EBITDA and adjusted EPS guidance. We believe continued execution of our cost savings initiatives. So this should essentially offset any topline headwinds.
Speaker Change: As part of our charting the course strategy, we have identified initiatives supporting $300 million of cost efficiencies across the organization and we are using this as an opportunity to accelerate certain initiatives to capture benefits even sooner.
Speaker Change: This is a company wide effort fully supported by the entire leadership team. We will continue to monitor the consumer closely but make no mistake. We are guided by a clear strategy. We remained focused on disciplined pricing and cost control and delivering an exceptional guest experience all while managing the business for the long term we are.
Speaker Change: Committed to optimizing every dollar of revenue controlling every dollar of cost and delivering exceptional financial and guest performance.
Mark Kempa: And with that I'll turn the call over to Mark to give more thoughts on our financial performance.
Mark Kempa: Thank you Harry and good morning, everyone. My commentary today will focus on our first quarter 2025 financial results, our full year outlook and our financial position.
Mark Kempa: Let me start with our first quarter results on slide 10.
Mark Kempa: We delivered solid results in the quarter coming in at or ahead of guidance across all key metrics.
Mark Kempa: As expected occupancy was 101 five down year over year due to increased dry dock days and related repositioning sailings. Despite this net yields came in ahead of guidance at one 2% driven by healthy net per diem growth of four 3%.
Mark Kempa: These results are indeed impressive as we are comping exceptional 13% growth in net per diem and 16% growth in net yield in the prior year. The 70 basis point outperformance in net yield was largely driven by strong results in close in bookings in our funding itineraries, including.
Mark Kempa: The Caribbean, Bahamas, Bermuda, and Hawaii, and strong pre sold and onboard spend.
Mark Kempa: Turning to cost growth in adjusted net cruise cost excluding fuel came in lower than expected, increasing 3% to $169. The.
Mark Kempa: The beat was primarily due to the timing of certain expenses that are now expected to occur in the second quarter.
Mark Kempa: Excluding the $8 impact from dry docks unit cost growth would have been one 2% well below inflation and in line with our commitment to sub inflationary cost growth.
Mark Kempa: As a result, adjusted EBITDA for the quarter was $453 million above guidance of $435 million.
Mark Kempa: Adjusted net income came in at 31 million impacted by $23 million of foreign currency losses, compared to $13 million of FX gains that benefited the prior year as a result, adjusted EPS was <unk>, <unk>, which had a <unk> impact from foreign exchange losses.
Mark Kempa: Moving on to the second quarter and full year guidance on slide 11, I'll start, but I'll start by noting that today is April 30th So we have strong visibility into the second quarter, particularly as all sailings are now within the cancellation window and they're just 60 days remaining in the period.
Mark Kempa: I'll start by focusing on the second quarter, where we expect occupancy to come in at approximately 101 or three two which is about two 7% below the prior year.
Mark Kempa: As we discussed last quarter. This was driven in part by a 6% increase in sailings in Asia Africa and Pacific versus the same period in 2024.
Mark Kempa: These longer itineraries typically command higher pricing, but have fewer third and fourth guests per cabin, which results in slightly lower occupancy. Additionally.
Mark Kempa: Additionally, given the challenges in the current environment. We have discussed we are prioritizing price overload factor in line with our commitment to disciplined revenue management as we believe this will produce the best long term results.
Mark Kempa: As a result net yields for the second quarter is expected to grow approximately two 5% driven by healthy net per diem growth of five 2%.
Mark Kempa: Turning to cost adjusted net cruise cost excluding fuel is expected to increase 1% in the second quarter.
Mark Kempa: This is primarily due to the timing of certain expenses that shifted from Q1 into Q2, along with additional cost related to the delivery and debut of Norwegian Aqua.
Mark Kempa: As a result, we expect adjusted EBITDA for the second quarter to be approximately $670 million and adjusted EPS to be 51 cents.
Mark Kempa: Moving to our full year outlook, we expect occupancy to average 102, 5%.
Mark Kempa: This reflects a 3% increase in deployment in Asia Africa, and Pacific sailings compared to last year during the third quarter as well as our continued focus on maintaining price overload factor.
Mark Kempa: By prioritizing price, we believe we are setting a stronger foundation and when demand normalizes, we should be restarting from a place of strength.
Mark Kempa: Moving to net yield as Harry mentioned based on what we know today and assuming a stabilization in the current environment as the year progresses, we expect full year net yield growth in the range of 2% to 3%.
Mark Kempa: This assumes that our pricing remains very strong growing in the range of four 3% to five 4% with both metrics coming off record performance in 2024.
Mark Kempa: Should we see pressure on the top line. We believe we can effectively offset this with continued execution and acceleration of our cost savings initiatives and we are prepared to proactively accelerate additional efficiency measures.
Mark Kempa: As a result, we are improving our full year adjusted net cruise cost, excluding excluding fuel guidance to a range of zero to 125% growth.
Mark Kempa: We do not expect our cost to be meaningfully impacted by recently proposed or implemented tariffs, our global sourcing strategies and diversified procurement practices help insulate us from potential volatility in this regard.
Mark Kempa: Our disciplined approach to cost control anchored in a more efficient operating model and empowered by our transformation office reinforces our ability to protect margins and profitability even in a dynamic environment.
Mark Kempa: We believe this flexibility sets us apart from others of course should the macroeconomic or geopolitical environment shifts materially, we will reassess and adjust our guidance as appropriate.
Mark Kempa: That said, we remain confident in our long term strategy execution execution and growth trajectory.
Mark Kempa: Moving on as a result of balancing challenges in the current environment combined with our robust cost efficiency program. We are maintaining our full year 2025, adjusted EBITDA guidance at $2 72 billion.
Mark Kempa: Our full year adjusted EPS guidance is also unchanged at $2 <unk>.
Mark Kempa: As the reduced share count from our convertible note transaction in early April is offset by FX headwinds of four.
Mark Kempa: Moving to margins on slide 12, the combination of top line growth and a more efficient cost structure continues to drive meaningful improvement trailing.
Mark Kempa: Trailing 12 month adjusted operational EBITDA margin expanded by nearly 280 basis points to 35, 5% in the first quarter compared to the same quarter in 2024.
Mark Kempa: For full year 2025, we continue to expect further expansion, reaching approximately 37%.
Mark Kempa: As I've mentioned before we believe we have a structural advantage we've been building our cost efficiency capability for over 18 months now through our transformation office and that work is already paying off.
Mark Kempa: The fact that we continue to progress towards our charting the course margin to our target of 39% even in the current consumer environment underscores the strength of our execution and culture. The resilience of our business model and our ongoing commitment to improving the balance sheet.
Mark Kempa: Turning to slide 13, I'll walk you through our pro forma balance sheet and debt maturity profile.
Mark Kempa: As many of you know we've been active on the capital markets front since quarter end. Most recently, we refinanced the majority of our 2025 exchangeable notes with new 2030, exchangeable notes and a shareholder accretive transaction that reduced our diluted share count by approximately $15.
Mark Kempa: 5 million shares.
Mark Kempa: All without increasing our debt leverage.
Mark Kempa: Looking at the rest of our 2025 maturities of approximately $640 million, which consist of ECA backed loans capital leases and other items that we can comfortably cover with our current operating cash flows.
Mark Kempa: Looking ahead to 2026, we have just $1 billion in scheduled maturities, which we also expect to be able to service through organic cash generation.
Mark Kempa: And as a reminder, 93% of our debt is fixed rate. So movement in market interest rates will have minimal impact on our overall interest expense.
Mark Kempa: Turning to leverage on slide 14, I want to reaffirm that reducing leverage remains our top financial priority as is maintaining a strong liquidity position.
Mark Kempa: Net leverage temporarily increased to five seven times in the first quarter, reflecting the delivery of Norwegian Aqua at the end of March.
Mark Kempa: Keep in mind that when we take delivery of a new ship. We also take on the related debt onto our balance sheet.
Mark Kempa: However, because our net debt to adjusted EBITDA is calculated when calculated on a trailing 12 month basis that ship has not yet contributed any EBITDA, so our leverage calculation temporarily increases.
Mark Kempa: That said, we continue to expect net leverage to decline steadily over the course of the year improving to approximately five four times in the second quarter and ending the year at approximately five times.
Mark Kempa: This puts us firmly on track to achieve our 2026 target of reaching the mid fours.
Harry Sommer: With that I'll hand, the call back over to Harry.
Speaker Change: Well, thanks, Mark our close today with a few reminders about the long term fundamentals of both our industry and NCL edge, Chris remains a highly compelling sector with significantly runway for growth.
Speaker Change: It still accounts for just 2% of the global vacation market, yet offers a differentiated value proposition multiple destinations world class service and onboard entertainment all at a better value than comparable land based vacations, adding long booking windows rising consumer awareness and limited supply growth and it's clear that industry.
Speaker Change: <unk> is set up to outperform as friends DLH I am equally optimistic we have clearly defined brands or premium guest demographic and the leading growth profile in the space are performance is underpinned by a proven algorithm supported by our transformational cost savings program. This makes our business model sustainable in the long term.
Speaker Change: We're also backed by an experienced management team a disciplined capital allocation strategy and our firm commitment to strengthening the balance sheet and reducing net leverage we believe those fundamentals will continue to drive strong shareholder returns. Despite the uncertainty in the macro environment and based on what we know today, we are reiterating.
Speaker Change: <unk>, our full year, adjusted EBITDA and adjusted EPS guidance, underscoring our ability to perform and execute we remain committed and on track to deliver all of our 2026 charting the course targets. This includes meaningful margin expansion continued deleveraging and record ROIC driven by a clear <unk>.
Speaker Change: Strategy focus and strength of execution.
Speaker Change: While the current macro environment presents its share of challenges, we remain confident and optimistic about the long term we are managing the business with discipline staying focused on what we can control and maintaining a clear commitment to balancing cost efficiencies with guest experience.
Speaker Change: I could not be more proud of the dedication of our 41000 team members, both shoreside and shipboard around the world, who bring our vision to life every day with their unwavering focus on performance and delivering results in oil environment I am confident we are charting the right course with that.
Speaker Change: The call back to our operator.
Speaker Change: Thank you at this time, we will be conducting our question and answer session. We ask that you. Please limit yourself to one question and one follow up.
Speaker Change: I would like to ask a question. Please press star one on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first question is coming from the line of Matthew Boss with Jpmorgan Chase. Please proceed with your question.
Speaker Change: Great. Thanks.
Speaker Change: So Harry could you elaborate on recent changes in the booked position for 2025 in early 2006, maybe just how this compares to historical levels and then relative to customer behavior that you've seen in April what exactly have you contemplated in your updated guidance for volumes and pricing over the balance.
Speaker Change: Of the year.
Speaker Change: Thank you Matthew and good.
Speaker Change: Morning.
Speaker Change: So I think there are three questions there and I'll do my best to remember all three of them and I'll do it in a reverse because thats my memory works.
Speaker Change: A customer behavior listen clearly, we saw a little bit of Choppiness, that's what we've referred to it as in the first part of April.
Speaker Change: Firstly related to our Q3 itineraries.
Speaker Change: Mostly related to our European Q3, itineraries to be as clear as possible.
Speaker Change: With perhaps some hesitancy for Americans to do long haul trips during this environment, but I am pleased to say that we've already seen return to normality. For example, the week that we're at now from a booking and pricing perspective is going to equal what we were doing towards the end of March. So it's nice to see that this this slow.
Speaker Change: Weakness if you will in the short lived weakness if you will or choppiness.
Speaker Change: It was relatively short lived and we're very pleased with that listen we're not assuming any miracle or a hockey stick in the back half of the year. We think perhaps this challenge with Q3, Europe will continue but while maintaining a focus on price over occupancy will believe us we believe that as demand returns back to normal we are going to be.
Speaker Change: Operating from a position of strength in fact, if you look at our implied guidance we have by.
Speaker Change: By far the highest year over year price increases of the three major cruise lines that are out there I'm not here to talk about the competition, but it's a very healthy number for the back half of the year I think the implied guidance is something like four 5% at the midpoint of our guidance, which is really good and it leads to a recently good yield as well highest implied guidance for yield as well.
Speaker Change: In the back half of the year, so hard not to be happy with that.
Speaker Change: Turning to 2006.
Speaker Change: Right now.
Speaker Change: From a historical perspective go back to the normal years in the late teens. We are booked far ahead of where we were say in 2017 18 19 any of those three years individually or in a combined basis and of course at higher prices than last year, which is always our goal. So we remain optimistic I think there is some nuance.
Speaker Change: That may have been lost in our R&R commentary as I read some of the preliminary reports that came out. This morning, Yes, Yes, Q3, Europe is an idiosyncratic idiosyncratic thing, which I'm going to come back to in a minute, but part of the shift in the booking curve is just a reflection of the fact that we have a lot more Caribbean itineraries in Q.
Speaker Change: <unk> I think our Caribbean deployment is about 10 points higher than Q4, this year than last year and that those close to home and to some extent shorter itineraries are some three $4 seven day itineraries in that mix naturally book closer and Thats not a weakness that's just a manifestation of consumer behavior.
Speaker Change: We expect and which is why despite this perhaps what you would call a slight decrease in forward book position over a 12 month period I wouldn't even referred to it as a softness we continue to remain within the optimal book position because that takes into account the situation with the Caribbean and the somewhat different booking curve.
Speaker Change: I guess I also wanted to talk a little bit about what we're doing from a Europe perspective. If you go into 2026, we've actually shifted our deployment to be a little bit less relying on Europe, and 26 versus <unk> 25, and also are coming out with shorter itineraries seven.
Speaker Change: Seven days for a lot more seven days versus nine and 10, which we think have a couple of benefits number one that two shrinks the booking curve a little bit closer in which is good. So it allows us a further arrow longer period to book. These itineraries. It also lowers the price point and it also allows us to have a more comprehensive pre and post hotel stay program.
Speaker Change: Which we believe will adds to margin of the company without adding capacity days so to speak because we get the margin on the hotel stay a separate from the margin we get from the crude stay while for example, this year with lots of nine and 10 data center areas. We had much fewer hotels days. So I think when you look at those things all together.
Speaker Change: Very bullish about both our current position and the future.
Speaker Change: That's great great color, Harry maybe Mark just to follow up on historical lead indicators have you seen any notable change with recent onboard spending and then just on the cost side. If you could walk through flexibility with the cost structure your ability to maintain EBITDA forecast for this year and just your confidence on the 2000.
Speaker Change: Six bottom line targets.
Speaker Change: Great. Good morning, Good morning, Matt listen I think from a from an onboard revenue standpoint, we have continued to see very strong trends.
Speaker Change: Both in Q1, and where we are.
Speaker Change: Month to date in April so it seems like once guests around the ship they are very happy to spend and they continue to spend at solid levels. So we're very very pleased with that.
Speaker Change: In terms of the flexibility on the cost structure.
Speaker Change: I want to remind everybody first and foremost we've always said that we're not cutting costs just to cut we have been taking a very targeted approach.
Speaker Change: An approach, where we will not sacrifice the guest experience or the brand equity and in fact since we started our program roughly 18 months ago, and most or all areas. Our guest satisfaction scores have actually increased.
Speaker Change: We are focused on removing waste and gaining more efficiency out of the system and we've been doing this for 18 months now leveraging our transformation office, we've been gaining that muscle building that muscle and.
Speaker Change: It's really starting to pay off so as we're seeing some potential pressures in the topline we're flexing that muscle, we're simply doing things a little bit quicker than we had initially planned.
Speaker Change: Accelerating certain things in our supply chain system.
Speaker Change: Where we're leveraging better commercial note negotiations, we're leveraging technologies and in many cases, we've actually increased the product onboard the ships. So all in all we continue on our path. We've always said this was a $300 million plus program and we're very firm on that on that on that target, we're not going to stop at three.
Speaker Change: <unk> hundred its 300 plus in terms of your question on our overall 2026 targets.
Speaker Change: So very confident in our 2026 targets. We've said we have the ability to flex if there is <unk>.
Speaker Change: Pressures on the top line, we're flexing on the bottom line for any any near term softness and as we continue to gain and improve our margins. We firmly believe that we're on a solid track to meet our 2026 targets and if I could just add on for a second to marks comments, which I think you did a fantastic job I think the single biggest metric we can use to gauge guest.
Speaker Change: That is faction is the percentage of guests that book their next cruise either while they're on the ship or the immediate aftermath of when they came in and I can report that across the NCL H level. We are at a record future booked position. So if you look at the number of guests that cruise with US for example, in 2024 and how many of them.
Speaker Change: Cruise for 25, where the guests that are already crudes for us in the first four months of 25 and how many of them have accrued on the books for 26. Those are all at record levels. So I think perhaps more important than a specific guest satisfaction score or some other metric one may contemplate forget satisfaction, that's where the rubber hits the road.
Speaker Change: Road and if we can continue with those record numbers. It gives us absolutely. The signals that we are focused on the right things Mark made a very important comment that I just want to emphasize this is not cutting for the sake of cutting and this is not cutting the important things I think Marc referenced the fact that we're actually spending more money in certain areas things like meat.
Speaker Change: Protein dishes, the things that really make a difference to our guests we've actually increased our spend year over year in order to improve the quality. So despite that there are so many efficiencies in the other areas I mean, our favorite things are things like fuel, where I don't think the guest cares how much we buy fuel for as long as chip gets them from point a to point.
Speaker Change: <unk>, which were very successful at doing massive savings there and in other areas like that.
Speaker Change: Great to hear best of luck.
Speaker Change: Thank you thank you Matt.
Speaker Change: Thank you. Our next question is coming from the line of Steve <unk> with Stifel. Please proceed with your question.
Speaker Change: Hey, guys good morning.
Speaker Change: So heavier Marc I'm wondering if you could could break and I know you don't like to do this but wondering if you could break the brands down a little bit here and it can be can.
Speaker Change: Can you maybe help us think about what bookings have looked like for the Norwegian brand versus the luxury brands I guess guess, what I'm trying to get at here is that you are booking commentary.
Speaker Change: In terms of mentioning choppiness seems a little bit different versus what we've heard from.
Speaker Change: Some of your peers. So just trying to understand if this choppiness is more tied to your luxury brands versus the Norwegian brand and then maybe help us think about the recent oceana promotional work that you did around the remaining $25 ceilings and does this have something to do with the European issues that you called out Harry Thanks, I know thats probably confusing.
Harry Sommer: Very good to see thank you for the question. So I'll get into this in reverse order I think all three brands are seeing pretty much the same booking patterns. Some pressure on Q3, Europe, which perhaps is a slightly larger percentage of Oceania and regent itinerary than it is for NCL, but really just limited to that we're very happy with the winter itineraries even.
Harry Sommer: The winter exotic itineraries are doing very good for places like Asia Africa, South America, Australia, et cetera, and the world cruise on the luxury brands and 26 is looking very well from a booking perspective as well so so no weakness.
Harry Sommer: Luxury versus it <unk> seem to be doing well and it will just seem to have this one Achilles heel I think this is this thing about the oceana promotion I have seen a bit of a write up on that as well listen we do promotions. All the time. This promotion is not necessarily different in tenor.
Harry Sommer: And discounting we keep price sacrosanct I already mentioned the fact that we have we're guiding towards.
Harry Sommer: Hi for close to 5% price increase year over year for the back half of the year, which we think is fantastic obviously oceana region play a part in that mix and our helpful towards that so I think this is a little bit of a marketing packaging. If you will in terms of reality in terms of discounting.
Harry Sommer: Hopefully that that comment is clear.
Harry Sommer: Past that wouldn't necessarily say, you're right. We don't give detailed guidance by brand, but wouldn't necessarily say that we're seeing any difference between the three brands.
Speaker Change: Okay. Thanks for that Harry and then second question.
Harry Sommer: You mentioned that onboard trends remain strong.
Speaker Change: Probably also assumes that close in demand has been strong as well and I think I think mark mentioned that if I remember correctly. So as we think about your revised yield guidance is.
Speaker Change: Is the difference in the yield guidance now versus back in February the challenges just strictly the challenges that you called out around <unk> bookings or are you assuming that there is some kind of change in onboard or close in demand and then.
Speaker Change: Harry when you you mentioned the word choppiness, but it seems like you really said that was only tied to one week. So I just.
Speaker Change: Is that the way to think about it that it was really just one week or is there something else that we're kind of missing there.
Speaker Change: Well I think two things again in reverse order, yes. It was more like two to three weeks I wouldn't call. It one week because there's now been there for weeks in April I'm talking about now the last week of April doing better. So I would say it was more three weeks. If you will of Choppiness. Although we started to see some recovery last week already and as I mentioned before more this week I think listen there is also a <unk>.
Speaker Change: Realization that it's.
Speaker Change: It's hard to read the future.
Speaker Change: And.
Speaker Change: Uh huh.
Speaker Change: Not to get political here, but it's hard to know what's going to happen in the tariff environment and other things, although tariffs don't directly impact us they do impact consumer sentiment and tough to read what's going to happen. In 30, 60 90 days. So I don't I don't want to assume that every day is a perfect Sunny day ahead or everyday will narrow for example, the success we're having this.
Speaker Change: Weak and just to come back to some of these comments.
Speaker Change: Sure.
Speaker Change: There is a difference between bookings and revenue.
Speaker Change: So yes, we've seen two to three weeks of challenging bookings, but you can hear my car commentary, which should be loud and clear that we have maintained price you'll have 464, 7% price increase year over year compared to last year in the back half of the year when the back half of last year was spectacular from a pricing perspective, as well I think record price.
Speaker Change: <unk>, we think is a very strong paper.
Speaker Change: And compares well to the competitive set.
Speaker Change: I can make bookings happen by lowering prices. So when you look at our booking trends versus perhaps others I think thats, just something to think about not that I'm, suggesting anything else happening I'm, just saying that we are super focused on price and if there's two or three slower week. Some bookings that we can maintain price we're going to do it and we're going to continue doing that.
Speaker Change: In order to set us up for a foundation for a strong future we actually even saw some some of the competitive set do dollar deposits don't know if you guys track that as well.
Speaker Change: Things like that we're not going to go into Hey, Steve and then in terms of onboard revenue as we think about it going ahead look based on what we're seeing in our trading patterns. Today onboard revenue remains strong we expect and we continue to believe it's going to remain strong as I said once the passengers are onboard they continue to spend money.
Speaker Change: So so as we look forward.
Speaker Change: We're not anticipating any significant reductions in onboard spend obviously, it's always always a variable, but we have not seen any sort of.
Speaker Change: Indicators on that front of any sort of weakening in the onboard side.
Speaker Change: Okay, great. Thanks, Larry Thanks, Mark really appreciate it.
Speaker Change: Thank you. The next question is from the line of Robin Farley with UBS. Please proceed with your question.
Speaker Change: Great. Thank you.
Speaker Change: Just wanted to understand.
Speaker Change: Sort of what's on your books going forward, you mentioned kind of.
Speaker Change: Preserving price and.
Speaker Change: The booking volume being in line.
Speaker Change: Can you tell us a bit about.
Speaker Change: What price on the books is sort of.
Speaker Change: On a year over year basis.
Speaker Change: Because when I'm looking at your <unk>.
Speaker Change: Vince.
Speaker Change: Ticket sales being up.
Speaker Change: Hi, 2%, maybe rounding to 3% what's your capacity for the year is up 5%.
Speaker Change: 8% in the second half so just trying to think about what price looks like on a on a year over year basis.
Speaker Change: Actually have on your books.
Speaker Change: Understand you're guiding it to be to be up quite a bit but just kind of wondering what you have already thank you.
Speaker Change: Good morning, Robin and thanks for the question I think the first comment is when you think about Acs being up three 4% in capacity is up 5% part of that what Youre seeing is remember as we're shifting into more closer to home itineraries. Both in Q4, and then 2026 that will have an impact.
Speaker Change: On our on our Ats, obviously, we all know that that's a shorter booking window and they and tends to book closer in so nothing surprising there I think as we look forward I think the core question is where is our load and whereas our pricing today and I think we've been very very clear that as we look forward our pricing is up.
Speaker Change: And as we look at our load factor. It is in line with historical ranges.
Harry Sommer: And as Harry said, what we're seeing is we're seeing a little bit of Choppiness on rounding out that Q Q3 European destination.
Speaker Change: And as we look at where.
Speaker Change: Where we are in our overall booking curve, we remain in our optimal range. We're just seeing some a slight volatility in rounding out that Q3 European So things continue to look healthy there is a little bit of uncertainty out there but.
Speaker Change: As Terry said, we've seen an uptick in the last week week, and a half and thats very encouraging for us.
Speaker Change: Okay, great. Thank you and maybe just as a follow up.
Speaker Change: You mentioned you have more Caribbean in the second half so a.
Speaker Change: A little bit closer in.
Speaker Change: And in theory optimal range would mean that your volumes are down in terms of like visibility for that period. So I know, there's still a lot of time to go between now and through the fall Caribbean, but I guess are you seeing it feels like historically, that's sort of where the.
Speaker Change: The industry would tend to see softness is not so much like peak European summer. So I'm, just wondering how that sort of fall Caribbean understanding that it's.
Speaker Change: There's more of that it looks closer in but just what youre seeing with the consumer.
Speaker Change: Booking.
Speaker Change: For that period and that product, yes, I think first and foremost you're absolutely correct.
Speaker Change: That we do have less visibility in that product, but but what I think you've seen from from the industry and particularly the fun and Sun itineraries is that those continue to remain strong.
Speaker Change: <unk> seen that both in Q4 of last year and more recently, a Q1 close to home cruising is doing well and we believe it will we believe it will continue to do well as we go forward, we're attracting lots of new to cruise new to industry and I think those markets are perfect to cater to that.
Speaker Change: I think where we're seeing as Americans are seem to be a little bit more comfortable staying close to home.
Speaker Change: Given what's going on in the macroeconomic environment. So.
Speaker Change: That's where we're seeing a little bit of slight volatility on rounding out that Q3 European destinations, so, but all indicators from what we're seeing Q4 and the closer to home itineraries continue to build world and we expect them, we expect them to do well.
Speaker Change: Have a little bit of a tailwind with the announcements we made on our enhancements to great Stirrup Cay, which go live in mid November so so youre right, Robyn, sometimes Q4 Caribbean isn't as strong as we hoped but we think that this gives us a unique tailwind for this year.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you Robyn.
Speaker Change: Thank you. The next question is coming from the line of Ben Chaiken with Mizuho. Please proceed with your question.
Speaker Change: Yeah.
Speaker Change: Hi, good morning, Thanks for taking my questions.
Speaker Change: Switching gears, a little bit all the pricing commentary was helpful. But how do you think about the ROI of investments you are making increase from K are these investments you believe are kind of like marketable and can drive price and I guess related should we expect more in marketing of islands over the next.
Speaker Change: 12 to 18 months and I guess I ask that in the question of customers, who historically have not always reached the island on a regular basis. So curious just curious how you balance that dynamic. Thanks.
Speaker Change: So again to answer your second question first we absolutely are going to market great serve case more now.
Speaker Change: Not only in the next 12 to 18 months in the next 12 to 80 days.
Speaker Change: We've now made the announcements and we believe we have a much more competitive product both because theres more things to do and also with the peers. As you mentioned, we are going to have a close to a 100% success rate of actually visiting there. So we're very excited about that and we are eager to get the word out and so we will.
Speaker Change: In terms of ROI listen we have long term ROI growth, we've talked about them in terms of our of our charting the course.
Speaker Change: And clearly the investments in GSE have to meet or exceed that.
Speaker Change: That threshold that we would've made it and we believe they will.
Speaker Change: We absolutely believe it makes it more marketable we absolutely believe that it can drive price on the cruise and actually also drive onboard spend so to speak or spend on the island.
Speaker Change: I'll remind you that.
Speaker Change: With these improvements we've talked in the past that will go from about 400000 guests visiting her a year, which I believe with what we did last year to over 1 million guests visiting her next year and it will only grow from there which are considering where we move somewhere between two five to 3 million guests a year is a sizable percentage of our overall.
Speaker Change: Guest counts within the GSE.
Speaker Change: Got it that's helpful. And then one broader 26 question if I may.
Speaker Change: As you mentioned, Terry that's greater Alaska in Africa, and Asia capacity, which lowers occupancy this year in <unk> It was a.
Speaker Change: Mechanical headwind to yields as you think about the greater mix of Caribbean and so on and so on next year is that a yield tailwind under the context of occupancy is higher or do those fundings on itineraries have a lower relative price, thus netting out the yield benefit one would get otherwise from greater occupancy curious how you're thinking about those two kind of like opposing forces at that.
Speaker Change: Makes sense. Thanks.
Speaker Change: I think youre thinking about it right, but we still believe that net of that is going to be a yield tailwind.
Speaker Change: If you net those two things together and we're excited about that but in addition to being in a yield tailwind. It's also going to be a cost tailwind because of the cost to operate. These itineraries I mean, you think about the logistics of shipping food for a 3000 passenger ship to places like South Africa, or Argentina, or Asia places like.
Speaker Change: That so it's really a double benefit a modest yield tailwind and actually are a real cost tailwind.
Speaker Change: Got it understood. Thank you.
Speaker Change: Thank you. The next question is coming from the line of James Hardiman with Citi. Please proceed with your question.
James Hardiman: Hi, good morning.
James Hardiman: Thanks for taking my question. So I wanted to connect the dots on maybe a couple of comments.
James Hardiman: That have been made so far so I think in the prepared remarks, there was some reference to the idea that the 2025 guidance.
James Hardiman: Whatever choppiness and see stabilizing.
James Hardiman: Stabilizes.
James Hardiman: The year progresses.
James Hardiman: I guess my question is stabilizes from what we've talked about the idea that and I think everybody can appreciate that sort of the weeks around liberation day that would sort of maximum.
James Hardiman: Uncertainty and fear.
James Hardiman: Things have gotten better since then so I guess.
James Hardiman:
James Hardiman: You will need trim, you improve from here and I know I can.
James Hardiman: Also appreciate that.
James Hardiman: To extrapolate the last week into the rest of the year, but if the current run rate.
James Hardiman: And is that enough to get to your your numbers for the year or do you need continued improvement from from the most recent data.
James Hardiman: Yeah.
James Hardiman: Really good question, something we think about a lot.
James Hardiman: Listen I think I've mentioned in the response to a previous question that this current week that red looks like it's got a about match, but last week of March which actually is a tailwind because of this time of year is usually a little bit slower than the last week of March the last week of March still being within wave in this period being sort of more traditional.
James Hardiman: <unk> slower summer period. So we are actually a bit encouraged by that but James I would never extrapolate from one week of bookings to the rest of the year, that's a little bit of wishful thinking that that being said if the current pace and pricing continues we absolutely will hit our guidance for a for the year I.
James Hardiman: I don't think we would have.
James Hardiman: Adjusted our guidance for the year, if we didn't believe that it was that it was achievable.
James Hardiman: Our concern as we've talked about before is it is difficult to tell whether the current conditions are going to continue or not.
James Hardiman: I'll leave it at that.
Speaker Change: That's really helpful. And then I guess, maybe a similar question as we think about 2026 and I think one of the people on the call are are much more focused on 2000.
James Hardiman: It's there.
James Hardiman: And I guess.
Speaker Change: Weather.
What's the takeaway you should ultimately be as we think about adjusting 2026, maybe the answer is.
Speaker Change: We haven't seen enough of anything towards the 26 at all.
Speaker Change: But maybe if I think about what you are saying for 2025 rate higher price.
Speaker Change: Lower occupancy.
Speaker Change: And that sort of slightly lower yield.
Speaker Change: Better cost.
Speaker Change: Is that how we should be thinking about 2020 as well.
Speaker Change: Too early.
Speaker Change: It really draw much of any conclusion on 26 relative to a couple of months ago.
Speaker Change: Yeah, I think it's a little early of course.
Speaker Change: Where we are buoyed by the fact that our book position as I mentioned prior is well ahead of historical averages. When we look at <unk> 26, compared to say a year like 17, 18, and 19, which we consider to be a pretty good time in this industry. So to be ahead of that and we started April ahead. We ended April ahead.
Speaker Change: It didn't really move that significantly one way or another in terms of the lead during the month of April. So we are buoyed by that.
Speaker Change: But to draw to draw conclusions on the full year based on a few week booking pattern is a little bit difficult, but I think we have enough visibility to confirm as mark had earlier in the call that are charting the course targets for 2006 are real obtainable and we we are very confident that we can achieve them.
Speaker Change: Got it.
Eric: It's helpful. Thanks, Eric.
Speaker Change: Thank you. Our next question is coming from the line of Conor Cunningham with Melius Research. Please proceed with your question.
Conor Cunningham: Hi, everyone. Thank you.
Eric: Just on the.
Speaker Change: You've talked about bookings a lot, but just when when when the soft patch does happen.
Eric:
Eric: How does your inventory management philosophy changed at all Mike are you you talked a lot about being at the optimal book position, but does this is an environment like this make you look at that in general and just how you may put out inventory to folks.
Eric: In general just any thoughts on how that May change. Thank you.
Eric: Yes, it's a good question.
Eric: I hate to get too granular on this call. So I'll try to keep this at a high level of US certainly a granular question listen clearly over this last three week period, we did look at our revenue management techniques.
Eric: <unk> regularly with our heads of revenue management across the three brands to discuss at a high level, what we did or what we should do and clearly we've made a few changes, but this pricing integrity. It's not just a cliche, we're super focused especially for the longer term.
Eric: The further out periods Q4 Q1.
Eric: Summer of 'twenty six to maintain price integrity, so while yes, we did.
Eric: A little bit of close to discounting for Q3 around this problem there in Europe as we describe super passionate about keeping price integrity, because as Mark mentioned in his prepared comments that provides us with a solid foundation for further growth as things start to return back to normal.
Conor Cunningham: And Connor keep in mind, we have a lot of tools in our.
Eric: The Arsenal that we go to before we really hit price.
Eric: With our bundling packages, it's all about value and what we're giving the customer. So we tend to flex those in and out which is a normal course part of our business.
Eric: Certain pricing promotions, they happen tend to happen in very small pockets very isolated need sailings and I'll also point out.
Eric: I don't think anyone asked this question along the way so a volunteer an answer we are not cutting our marketing spend in fact, we are increasing our marketing spend and the guide that we provided a zero to 1.25% year over year NCC cost increase assumes a higher marketing budget than we would have normally done in our.
Eric: Base case as Mark mentioned is one of our levers in order to increase demand and.
Eric: Keep pricing at the levels that we'd like to see.
Speaker Change: Ironically that was my next question just on the marketing front have you gone.
Eric: Hi, Rich I read your mind.
Eric: Maybe you could talk about it a little bit different so some marketing.
Marc: And then Marc you've talked a lot about.
Eric: Cost efficiencies.
Speaker Change: Not entirely clear like where.
Speaker Change: Those adjustments and costs are coming from marketing.
Speaker Change: Increases so if you could just maybe double click a little bit on what's going on on the cost side, where youre seeing a lot of success and John Thank you yes.
John: Yes, Carter look it as Ive always said its system wide.
Speaker Change: It's not.
Speaker Change: Not cutting product on the ship, we're actually increasing product what we're doing is we're eliminating waste and we're gaining efficiencies and that is system wide both whether it be on our ships, but also also on our back office systems as I said earlier I said, we are really starting to leverage our new commercial capabilities out of our supply.
Speaker Change: Pain management system, we have.
Speaker Change: Really made big strides there those are things that do not impact the customer we've really made big strides on our commercial negotiations around there, but also technology. We've made some some some soft minor technology investments that are really allowing us as well to gain more efficiencies on the back end on the back office. So again.
Speaker Change: Everything we're doing it's all around the margin all with the lens of not impacting the guest experience and in fact, we're focused on increasing the guest experience is as I said earlier and that's testament to both our guest satisfaction scores as well as our crews next increase certificates. So it's a lot of little things Connor.
Speaker Change: As we gain the muscle, we're able to execute faster and still maintain that that philosophy of not impacting the guests, but providing more to the guest in many cases.
Harry Sommer: So Dana we have time for one more question.
Speaker Change: Thank you. Our final question is coming from the line of Brett <unk> with Barclays. Please proceed with your question.
Brett: Good morning, everybody and thanks for taking my question. So you covered a lot of ground. So far this morning, I'm wondering Harry.
Brett: Double click on Europe, which you do keep coming back to that kind of thing.
Brett: Get the messaging that Europe is where you.
Brett: Are you seeing the most acute challenge why do you think Theres American hesitation to go to Europe.
Brett: This summer when Youre not seeing any hesitation for your for Americans to go.
Brett: Elsewhere around the world is it just the supply and demand issue in Europe, particularly but maybe you can touch on a little bit more about the American hesitation.
Speaker Change: Yeah, It's a really good question and I wish I had a better answer for you Brad.
Speaker Change: I don't Wanna Pontificater make things up all I can tell you is what we're seeing.
Speaker Change: Yeah.
Mark Kempa: I don't know what to say I know Mark if you have any color on that you've either yeah look I think.
Mark Kempa: As we've said it's about rounding out the European product, we have a very very good base of business. There on the books, we have good load factors there, but it's about rounding out that those last few percentage points of load and best we can see is that.
Mark Kempa: Consumers going on those a little bit of a longer haul trips or possibly a little little more hesitant at this stage.
Mark Kempa: We're not seeing that in other markets, but we are seeing I'm seeing that in the round rounding out of European itineraries, and it's coming from the North American customers. So that's the best we can see and I think it's just.
Mark Kempa: Generally related to the larger macroeconomic uncertainty that's out there.
Speaker Change: Okay. Okay. That's helpful. Maybe a supply issue there and then my second question is a follow up on that.
Speaker Change: I would I would hesitate I don't believe it's a supply issue I think those are two different things supply issue versus maybe some consumer hesitancy.
Speaker Change: Want to make that very clear before you go into your next question.
Mark Kempa: I appreciate that Mark a fair enough the follow on would just be Europe into 'twenty six.
Mark Kempa: It's a faraway timeframe for Americans to book Summer 'twenty, six but not necessarily for your luxury brands and those folks are older.
Mark Kempa: Book further out these are more expensive more expensive itineraries and.
Mark Kempa: And you would expect to see those sort of youre moving into our core booking season for 'twenty six or thereabouts for those customers now and so I guess the question is.
Speaker Change: Is that something where you're seeing hesitancy for Americans to go to go to Europe for.
Mark Kempa: For some of our 2000.
Mark Kempa: 26 already or is it just too far out or people, saying look we'll book 26, now because we're not worried about what's happening in the macro now thats just far enough away that we can go ahead and book.
Mark Kempa: So I think there are three answers I can give you. The short answer is no. We are not seeing any challenges with Europe 26. The medium answer is listen the first week of April was not a great week anywhere, but taking that week or the week. After out we're back to normal booking patterns for next year that we're happy with and our book position is.
Mark Kempa: Is doing well similar to the rest of the 26, so no I'm not I'm not we're not seeing any challenges that go back to my original answer not seeing any challenges there.
Mark Kempa: Excellent thanks, everybody.
Speaker Change: Thanks Ralph.
Speaker Change: I want to I want to thank everyone for joining us today I just want to reiterate that we're super focused on our long term strategy, we are not going to do anything that will.
Speaker Change: Eat into all the progress, we're making on things like our new ships are on more product.
Speaker Change: Our deployment.
Speaker Change: Our deployment patterns, our investment in GSE, our improvements to our brand. All these things are alive, and well and I have tremendous tailwind for the future. We're very excited about Q4, Q1, or <unk> 26, and we look forward to welcome you all to the Aurora, which.
Speaker Change: Inaugurates later this year I think continuing our dialogue. Thank you all very much.
Speaker Change: Thank you ladies and gentlemen, this does conclude today's teleconference and webcast. We thank you for your participation and you may disconnect. Your lines at this time.
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