Q2 Caribbean pricing remains a headwind for both companies but Europe is a positive offset for RCL
OVERALL SURVEY SENTIMENT
- RCL: Neutral
- NCLH: Negative
CALL TO ACTION
We are not expecting much change to RCL’s 2014 guidance but Q2 could be lower than consensus. NCLH still has the most risk to 2014 yield guidance.
- North America
- As Chart 1 shows, FQ2 sequential pricing jumped into positive territory thanks to a rebound in Alaska pricing (although numbers are skewed due to absence of Celebrity in the Caribbean for May/June). In the Caribbean, sequential pricing was flat; on a YoY basis, pricing remains lower in the double digits for FQ2 and FQ3.
- Quantum pricing for Nov/Dec remain unchanged
- Pullmantur pricing steady
- Chart 2 shows strong YoY pricing for FQ2. In Chart 3, on a sequential basis, there was a price drop in FQ2 but that is more than offset by gains in FQ3 and FQ4.
- RC brand – pricing up high double-digits for F2Q and high single/low double digits YoY for F3Q-F4Q
- Overall, Celebrity pricing improved in late April. There was some discounting for FQ2.
- Azamara pricing was mixed
- Pullmantur pricing showed good growth considering very easy comps. The Baltic/North Sea regions particularly stand out.
- Anthem pricing for 2015 remain unchanged
- Asia/Australia/South America
- Slight growth in RC brand and Azamara pricing
Chart 4 shows NCL pricing continue to be under pressure for FQ2
- Will the bleeding stop? FQ2 Pricing continued its descent in late April.
- Pricing stabilized in April. On a YoY basis, pricing remains modestly lower.
- NCLH has 10% and 18% exposure to Alaska in FQ2 and FQ3.
- Europe pricing looks outstanding for the summer
- Hawaii FQ2 summer pricing was weaker in late April
STOCK VS SURVEY
Survey has suggested mixed signals for RCL in the past 6 months
Survey has been bearish on NCLH since the 02/12/14 survey