While the cruise industry is seeing a boom in passengers, and popularity like never before when it comes to families, it’s good for the cruise companies to remember that a simple downturn could leave them with massive financial debts, considering the amount of new cruise ships being built in 2011/2012.
This year, Norwegian Cruise Line made a loss of $10.6 million in the first quarter ($495.5 million revenue), although 2011 is an improvement on the first quarter of 2010 ($416.5 million revenue), which saw losses of $16.1 million.
Reasons have been given for the loss, and these include the building of Norwegian Epic that can hold 4,100-passengers. Cruise companies are investing in new ships to cope with the demand for cruising, with Norwegian Cruise Line seeing a “19% surge in revenue” for the first quarter of 2011.
The interest expense was another reason for the loss, which saw a jump of 34% from a year ago, in the same quarter. You can read more details on this on USA Today.
We expect the cruise business to continue growing over the next few years, although the companies building the new ships are taking risks with the investment, so do not be surprised if they find new ways to take more of your money on board.