An aerial view of the Viking Jupiter cruise ship anchored in the port of Montevideo on January 5, 2022.
Ivan Pisarenko | AFP | Getty Images
Viking is not your typical cruise operator.
Aboard its small, high-end vessels, you won’t find any babies. In fact, the cruise line does not hide the fact that it is going after the high-income baby boomers.
Casino? Not on these cruise ships.
In Viking Holdings’ prospectus, the company said its cruises are for the “thinking person,” emphasizing its efforts to appeal to travelers seeking adventure and new experiences.
“They have money, they have time and, I think, the moment you try to do everything for everybody, you know what happens? You don’t do anything good. So we There’s a very, very clear focus,” Torstein Hagen, CEO and chairman of Viking, told CNBC.
The luxury cruise line was targeting a $10.4 billion valuation in its initial public offering on the New York Stock Exchange on Wednesday, making it the third-largest cruise operator. Royal Caribbean And Carnival. Norwegian Cruise Line The fourth is the largest. Viking opened trading on Wednesday at $24 a share under the ticker “VIK”.
Viking extended its IPO after existing shareholders decided to sell an additional 9 million shares amid strong demand from mutual fund investors, according to a source familiar with the situation.
In 1997, Viking had four ships. It has rapidly expanded its fleet to 92 vessels, 80 of which are river vessels that ply the world’s major rivers, including the Seine in France and the Nile in Egypt.
“We’re different because when you talk about the big cruise lines, they’re big in the Caribbean,” Hagen said. “We have a small silver in the Caribbean. The rest is Europe.”
The timing of Viking’s IPO coincides with a strong recovery in cruise bookings. On April 25, Royal Caribbean Picked up his guidance Amid a bright outlook for the sector for 2024.
“Cruising has really come to the forefront as a competitive choice in travel,” Royal Caribbean CEO Jason Liberty told CNBC in a recent interview. “The travel industry as a whole is $1.9 trillion. The cruise industry is $56 billion of that. I think cruise travel is very different from pre-pandemic levels.”
While the company’s prospectus showed Viking had sales of $4.71 billion in 2023, it reported a net loss for the year. What’s exciting investors is the company’s revenue per passenger of $7,251, which is much higher than any other publicly traded cruise line. Viking’s premium price point allows it to make more money per customer.
Investors will also look for details on Viking’s expansion plans. Earlier this month, Norwegian Cruise Line said it had ordered eight new ships for delivery over the next 12 years.
Carnival, Royal Caribbean and MSC Cruises all have strong portfolios, which has raised concerns about overcapacity weighing on demand. But for now, the industry is focused on how well the pandemic has boosted demand and that, despite higher prices, cruises are still cheaper on average than hotel vacations.
UBS leisure analyst Robin Farley said land-based hotel rates were 25% higher than in 2019. During the same period, cruise line rates are 10% higher.
“The gap between cruising and hotels is huge. That’s what makes cruises compelling right now,” Farley said.
Credit : www.cnbc.com
