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Speaker 1: The signs of a consumer slowdown continue to mound, at

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Speaker 1: least in certain corners. Norwegian Cruise Line Holdings, Carnival and

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Speaker 1: Royal Caribbean all boosting their year end outlooks amid record

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Speaker 1: setting demand. Harry Summer, Norwegian Cruise Line Holdings President and

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Speaker 1: chief executive Officer, joins us. Now, Harry, thank you so

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Speaker 1: much for being with us. I want to just start

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Speaker 1: with what you're seeing in terms of whether demand is

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Speaker 1: sort of plateauing, accelerating or falling off. Just a touch

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Speaker 1: on the margins.

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Speaker 2: Well, good morning, Thank you for having me. On Demand

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Speaker 2: in the cruise industry right now is great. We're very,

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Speaker 2: very happy with what we're seeing with the consumer. You know,

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Speaker 2: keeping in mind that the demographic that we're pursuing is

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Speaker 2: mostly upper middle class, upper class demographic across our three brands,

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Speaker 2: and those consumers certainly continue to have money to spend

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Speaker 2: and are continuing to spend it on crucifigations.

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Speaker 1: At this point, Harry, I guess there's this key question

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Speaker 1: of how divorced the upper echelons are from the rest

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Speaker 1: of the economy. Essentially, do you find that you're this

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Speaker 1: a somewhat insulated from a cycle where you have consumers

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Speaker 1: that aren't necessarily feeling the same kind of pinches elsewhere.

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Speaker 2: So I think there's a number of criteria, a number

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Speaker 2: of things that really do help insulate us. As you

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Speaker 2: mentioned now. Number one, we are fishing in the upper

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Speaker 2: demographic pool. As I mentioned, but we also have a

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Speaker 2: very long lead time for booking. So unlike hotels and

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Speaker 2: air which are dependent on a lot of close in bookings,

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Speaker 2: our average booking curve is six eight months into the future,

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Speaker 2: so we have tremendous visibility into trends. If there is

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Speaker 2: ever any weeknes that we're not seeing any but every

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Speaker 2: once in a while there's a few sailings that perhaps

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Speaker 2: are doing less well, we can make adjustments six eight

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Speaker 2: months in advance, small adjustments that put things back on track.

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Speaker 2: It's really a unique feature of the cruise industry that

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Speaker 2: allows us to continue to have more stable and higher returns.

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Speaker 2: You know, fundamentally, cruises is a tremendous value. Our average yield,

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Speaker 2: you know, versus a hotel ADR is anywhere from thirty

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Speaker 2: to forty percent below what they'd spend on hotel. And

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Speaker 2: I think consumers, whether times are good, but especially if

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Speaker 2: times are less good. Certainly recognize that value and that

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Speaker 2: accrues to us. I mean, the last couple of quarters,

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Speaker 2: we've reported eight and six percent year over year yield

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Speaker 2: increases compared to last year, where we're guiding to another

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Speaker 2: six percent for Q three. We see that as a

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Speaker 2: very strong consumer.

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Speaker 3: Harry, I just wonder about prices. I mean, are you

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Speaker 3: in a position where you might even be able to

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Speaker 3: rise raise prices given that level of demand?

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Speaker 2: You know, I think, yes, great question. I think what

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Speaker 2: we showed in our financiers for the last few quarters

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Speaker 2: is pricing has been going up. We're guiding in Q

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Speaker 2: three and Q four for prices to go up. I

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Speaker 2: mean you may imagine, you know, with the long lead

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Speaker 2: time I described, Q three and Q four substantially sold out,

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Speaker 2: So we have great visibility and we stand behind the

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Speaker 2: guidance we just issued a few weeks ago in our

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Speaker 2: quarterly Earning School. Pricing will absolutely go up in both quarters,

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Speaker 2: and it looks that way for twenty twenty five.

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Speaker 3: Certainly, well, Harry, I want to get your thoughts As

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Speaker 3: a CEO of a major company. Lisa mentioned this fascinating

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Speaker 3: statistics of ceo is being let go from companies at

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Speaker 3: an unprecedented pace going back to twenty seventeen, I wonder

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Speaker 3: how you think about this moment in time. You're obviously

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Speaker 3: the CEO of a company that's successful, but when you

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Speaker 3: look among your peers again, not just the cruise industry,

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Speaker 3: but CEOs of large companies, has something changed that there

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Speaker 3: is more pressure in a way there hasn't been before.

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Speaker 2: So I'm guessing there's always been pressure in the CEO role.

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Speaker 2: But I think we're in a world of a rapidly

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Speaker 2: involving consumer. You know, tastes change over time and consumers

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Speaker 2: change over time, and we have to be constantly thinking

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Speaker 2: and innovating in the future. I mean, right now, as

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Speaker 2: an example, we're planning for ship deliveries through twenty thirty six.

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Speaker 2: I mean, we have to have a pretty good crystal

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Speaker 2: ball and a pretty good feel for what the consumers

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Speaker 2: are going to want for you know, years, even a

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Speaker 2: decade into the future. And it's really important to keep

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Speaker 2: that future focus if we're going to be successful.

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Speaker 4: Harry, we had the Sea of Marriott on yesterday, and

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Speaker 4: I'm talking about Marriott yachts. Now, are you a concern

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Speaker 4: on the higher end consumer the competition that's coming into

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Speaker 4: the industry.

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Speaker 2: You know, I've always said that our competition is not

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Speaker 2: other cruises. I mean, cruises in general make up about

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Speaker 2: two to three percent of the overall vacation market. You know,

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Speaker 2: we're keenly focused on what hotels do in general, and

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Speaker 2: we believe cruising is a wonderful vacation alternative to hotels.

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Speaker 2: I mentioned before the huge gap and value or price

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Speaker 2: thirty to forty percent below hotel. But also, you know,

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Speaker 2: hotels have their asset light model as being a competitive

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Speaker 2: advantage in their industry, it's also a competitive disadvantage because

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Speaker 2: they lose control of the product. We own all thirty

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Speaker 2: two ships in our fleet, fully own them one hundred

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Speaker 2: percent ourselves. We have thirteen more ships on order, by

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Speaker 2: the way, and we can ensure that we deliver an outstanding,

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Speaker 2: consistent product across the fleet. And I think guests are

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Speaker 2: beginning to realize that that consistency is something you don't

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Speaker 2: always get in the hotel spence.

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Speaker 4: I've been on cruises before. I mean, you get on

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Speaker 4: board all the extras, you have to spend more on,

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Speaker 4: especially things like some of these excursions. Are you seeing

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Speaker 4: consumers start to ratchet back some of that spending, you know,

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Speaker 4: not at all.

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Speaker 2: Our onboard spend continues at record levels, you know, you know,

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Speaker 2: we get weekly reports, you know, as our ship's travel

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Speaker 2: of our fifty five to sixty thousand guests that we're

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Speaker 2: carrying at any given time, on board spend shows no cracks.

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Speaker 2: We're very very happy. You know. It's another advantage I

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Speaker 2: mentioned the long lee time that consumers have in making bookings,

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Speaker 2: so they're paying for their cruises four or five months

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Speaker 2: in advance. By the time they come on the cruise

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Speaker 2: that money spend, it's already paid for off their credit card.

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Speaker 2: They come on the ship with the full wallet, ready

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Speaker 2: to spend more. And unlike hotels where people don't really

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Speaker 2: stay at a hotel although they fend to sleep, people

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Speaker 2: stay on the ship to do everything, shop, spa casino.

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Speaker 2: They arrange their short tourists for us. So we really

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Speaker 2: have we really getting much larger share of the consumers

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Speaker 2: whilet on the ship as well.

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Speaker 1: It is literally a captured audience. Harry Summer, thank you

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Speaker 1: so much for being with us. Harry Summer, Norwegian Cruise

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Speaker 1: Line Holdings, President and Chief executive Officer,