Viking Cruises: 'We Don't See Any Sign of Weakness'

22.08.2024 - 22:45 / skift.com / Royal Caribbean / Torstein Hagen / Dawit Habtemariam

If there’s a slowdown in travel, Viking‘s CEO doesn’t see it. Torstein Hagen said Thursday that bookings on his luxury cruise ships and river cruise lines look strong through next year.

“We haven’t seen anything that gives us an impulse for [concern] for 2025,” said Hagen during an earnings call for Viking Holdings. “As a matter of fact, July was an extremely strong month for us. One of the weeks was the strongest booking week we’ve ever, I’ve ever, seen.”

Viking has been seeing strong demand for bookings across its core products, including its river and ocean cruises. As of August 11, about 95% and 55% of the company’s passenger cruise days for 2024 and 2025 were booked. Advance bookings were 20% higher than in 2024 at the same point time.

“I don’t think we’ve seen any sign of weakness,” said Hagen. “It may come, but we haven’t seen this.”

Other cruise executives have also not seen any signs of consumers cutting back on spending. In July, Norwegian Cruise and Royal Caribbean executives told investors they’ve seen strong growth in guest spending and bookings for 2025.

Hagen’s comments came as some hotel brands noted a slowdown in consumer demand for travel. Both Choice Hotels and Hilton told investors they’re seeing a softening in domestic U.S. leisure demand.

But Viking appeared to be benefiting from a “wealth effect” where higher-end travelers are proving more resilient.

Responding to an analyst’s question about whether Viking would use discounts to maintain 2025 demand, Leah Talactac, chief financial officer, said: “We have a number of levers to use, and pricing would not be our first lever.”

American demand for river cruises in Egypt is growing again despite the ongoing war in Gaza and geopolitical tensions in the Middle East.

“The Americans have been surprisingly willing to go Egypt,” said Hagen. “Of course, [occupancy] has been a little bit hurt. But it’s been picking up again.”

“The economics of those ships are so phenomenal it’s been okay,” said Hagen. “Egypt is very profitable for us. So we are not concerned at all.”

This week, the company, which calls itself the world’s largest river cruise line operator, took delivery of another ship built for the Nile River and that can carry 82 passengers.

Some cruise companies have suspended trips to the Middle East due to ongoing conflicts. Norwegian Cruise rerouted its Oceania and Regent brands to avoid stops in the region.

In the second quarter, Viking Holdings’s revenue hit $1.6 billion, up 9.1% from last year.

Viking said its adjusted EBITDA rose 11.6% year-over-year. Its “adjusted gross margin rose 9.5%. Executives said that costs related to going public earlier this year had led to some unusual one-off expenses over the course of the past two