Travel Demand Holds Firm, Supporting Norwegian's Continued EBITDA Expansion

With pandemic-related changes in consumer behavior around travel well behind, economic performance of Norwegian Cruise Line Holdings is set to generate excess economic rents over our forecast. As consumers returned to cruising in 2021 after a 15-month sailing halt, they regained an appetite for travel that has yet to abate, bolstered by the value proposition the holiday provides. With ships fully deployed at optimal occupancy levels, pricing has continued to rise after surpassing prepandemic levels in 2023, and is showing further growth in 2025. While Norwegian could intermittently see pricing competition in periods of macroeconomic distress, we believe its attractive itineraries, tactical revenue management (including its More at Sea bundle program), and data-driven marketing will keep elevating sales across the brands. On the cost side, while higher oil prices and unfavorable foreign exchange could raise costs at times, we expect management will focus on extracting further efficiencies as the business continues to scale. Over time, we expect both pricing and costs to normalize at low-single-digit rates.