Mismanagement of Namesake Brand Weighs on Norwegian's Near-Term Growth and Leverage Potential

Thanks to travel demand that has more than recovered since the pandemic, Norwegian Cruise Line Holdings' economic performance should generate excess economic rents over the back half of our forecast. When consumers returned to cruising in 2021 after a 15-month sailing halt, they regained an appetite for travel, bolstered by the value proposition cruising provides. With ships fully deployed at optimal occupancy levels, pricing had risen to record levels in 2025. However, prices are falling in 2026 due to executional missteps (misaligned deployment and commercial initiatives), an issue we believe will take at least a few quarters to remedy.