After the market debut of the cruise line operator, Viking shares rise more than 10%


In fact, the cruise line doesn’t hide the fact that it is going after the high-income baby boomer.
Not on these cruise ships.
Norwegian Cruise Line is the fourth largest.
On April 25, Royal Caribbean raised its guidance for 2024 amid a bright outlook for the sector.
What is getting investors excited is the company’s revenue per passenger of $7,251, which is much higher than that of any other publicly traded cruise line.
Earlier this month, Norwegian Cruise Line said it ordered eight new ships scheduled for delivery over the next 12 years.
Carnival, Royal Caribbean and MSC Cruises all have robust portfolios, which has raised concerns of overcapacity weighing on demand.
During that same time frame, cruise line rates are up 10%.


Viking is not like other cruise lines.

You won’t find any children on its more elegant, smaller vessels. Actually, the cruise line is open about targeting the affluent baby boomer market.

On these cruise ships, there are no casinos.

As part of its attempt to appeal to adventure-seeking and first-time cruisers, Viking Holdings stated in its prospectus that its cruises are for the “thinking person.”.

They possess both the resources and the time, and in my opinion, when you try to please everyone, you end up doing nothing well. Torstein Hagen, CEO and chairman of Viking, told CNBC, “so we are very, very clear focused.”.

When the upscale cruise line made its initial public offering on the New York Stock Exchange on Wednesday, it aimed to be valued at $10,44 billion, which would have placed it third after Royal Caribbean and Carnival, with Norwegian Cruise Line coming in fourth. Viking initially priced at $24 per share, but on Wednesday it began trading at $26.15 per share under the ticker “VIK.”.

A person with knowledge of the matter said that Viking increased the size of its initial public offering (IPO) when current shareholders opted to sell an extra 9 million shares due to high demand from mutual fund investors.

There were four Viking ships in 1997. Its fleet has expanded rapidly to 92 ships, 80 of which are river-based vessels that navigate the largest rivers in the world, such as the Nile in Egypt and the Seine in France.

“We differ from the big cruise lines because they are well-known in the Caribbean,” Hagen remarked. In the Caribbean, we have a small portion. Europe makes up the remainder. “.

Viking’s IPO took place at a time when cruise reservations are strongly on the rise. With a positive outlook for the industry, Royal Caribbean increased its 2024 guidance on April 25.

In a recent interview, Royal Caribbean CEO Jason Liberty told CNBC, “Cruising has really come into the forefront as a competitive choice in travel.”. “The travel industry is worth $19.9 trillion in total. Of it, $56 billion is attributed to the cruise industry. In my opinion, cruising has significantly changed since the pandemic. “.

Although Viking reported a net loss for 2023, the company’s prospectus indicated that it generated $4.71 billion in sales. With a revenue per passenger of $7,251, the company is generating excitement among investors as it surpasses all other publicly traded cruise lines. Viking can earn more money from each customer thanks to its premium price point.

Details regarding Viking’s expansion plans will also be of interest to investors. Norwegian Cruise Line announced earlier this month that it has placed an order for eight new ships, which will be delivered over the course of the following twelve years.

Due to their extensive portfolios, Carnival, Royal Caribbean, and MSC Cruises have sparked worries about overcapacity negatively impacting demand. For now, however, the industry is concentrating on how well demand has recovered from the pandemic and that cruises are still generally less expensive than hotel stays, despite increased rates.

In land-based hotels, rates are 25% more than in 2019 according to UBS leisure analyst Robin Farley. Cruise line rates have increased by 10% in that same period.

“There is a significant difference between hotels and cruises. Cruise is compelling right now because of this, according to Farley.

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