Norwegian Cruise Line Holdings Ltd (NCLH) — Q1 2021 Transcript

Thank you, Josh, and good morning, everyone. Thank you for joining us for our first quarter 2021 earnings call. I'm joined today by Frank Del Rio, President and Chief Executive Officer of Norwegian Cruise Line Holdings; and Mark Kempa, Executive Vice President and Chief Financial Officer. Frank will begin the call with opening commentary, after which Mark will follow to discuss our financials before handing the call back to Frank for closing remarks. We will then open the call for your questions. As a reminder, this conference call is being simultaneously webcast on the company's Investor Relations website at www.nclhltdinvestor.com. We will also make reference to a slide presentation during this call, which may also be found on our Investor Relations website. Both the conference call and the presentation will be available for replay for 30 days following today's call. Before we discuss our results, I'd like to cover a few items. Our press release with first quarter 2021 results was issued this morning and is available on our Investor Relations website. This call includes forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from such statements. These statements should be considered in conjunction with the cautionary statements contained in our earnings release. Our comments may also reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures contained in our earnings release and presentation. And with that, I'd like to turn the call over to Frank Del Rio. Frank?

Thank you, Andrea, and good morning, everyone. As always, I hope that all of you joining us today, as well as your loved ones, remain healthy and safe. Today, we will focus our commentary on the progress we have made thus far towards the resumption of cruising, the overall strength of the booking and pricing environment, and our efforts to bolster our liquidity and maximize financial flexibility, as we've methodically returned our fleet to operation. Over a year since the suspension of voyages worldwide, our team in Norwegian has accelerated that the time has finally come to where we shift our focus to what I like to call, our Great Cruise Comeback, even if the comeback starts from international ports. As you can see on Slide 4, our return to service plan is centered around three key phases. First, we developed our multi-layered SailSAFE health and safety strategy, including mandatory vaccinations for all guests and crew at its cornerstone, which I will touch on in more detail later in the call.

Thank you, Frank. My remarks today will focus on the continued execution of our COVID-19 financial action plan and our planned return to cruising later this summer. I am pleased to say that we are beginning to see light at the end of the tunnel, with the significant progress we have made in recent months on our return to cruising. Despite this positive momentum, we have not lost sight that the pandemic is not yet over, and we remain focused on maintaining our cost discipline and pulling all levers available to conserve cash and maximize financial flexibility in what is an improving, but still uncertain environment. As I've said before, our team is focused on what we can control and we continue to adapt our strategy as needed as the pandemic evolves. Slide 10 illustrates the three focus areas of our action plan and the additional proactive measures taken since the beginning of the first quarter. First, we continue to tightly control operating expenses and capital expenditures through a number of initiatives, including the significant reduction or outright deferral of near-term demand generating marketing expenses and non-essential capital expenditures. As an example, our non-new build capital expenditures continue to be less than half our pre-pandemic expectations for 2021. In addition, we finalized €50 million of incremental deferrals of new build related shipyard payments since our last earnings call, resulting in a total deferral of €270 million through the end of the second quarter 2022. Second, we have made significant progress on improving our debt maturity profile to provide additional near-term financial flexibility. In March, we repaid the Pride of America and Norwegian Jewel facilities, which were set to mature in 2022, leaving no significant debt maturities until 2024. We also worked with our lenders to amend certain credit agreements to free up approximately $2 billion of additional debt capacity, most of which is on an unsecured basis. While we believe our liquidity position today is strong, this incremental debt capacity meaningfully improves our financial flexibility and gives us additional optionality should the need arise. And the final focus of our action plan is securing additional capital. We successfully tapped the market, which resulted in approximately $1 billion of incremental liquidity in the quarter. Slide 11 illustrates the two highly successful capital market transactions executed in March. First, we issued $1.1 billion of senior unsecured notes consisting of $575 million tack on to the December unsecured notes offering and $525 million of new unsecured notes due 2028. These transactions generated approximately $650 million of incremental liquidity after repaying the Norwegian Jewel and Pride of America facilities, both of which were to mature in 2022.

Thank you, Mark. And before we wrap up our prepared remarks, I'd like to provide an update on our global sustainability program, Sail & Sustain, which is reflected on Slide 15. Despite the current public health challenges we face, our commitment to drive a positive impact on society and the environment and to the advancement of our ESG strategy remains at the core of our everyday operations. Throughout the crisis, we have remained committed to supporting our local communities and the destinations we visited. Earlier this week, we announced that we are providing $10 million cash support to six Alaskan port communities to help families and small businesses with basic relief programs in the localities that have been really impacted by the ongoing cruise suspensions. My heart breaks for Alaska and its wonderful people as we face a potential second year of zero or at best limited cruise operations during the all-important summer tourism season, which would deal another blow to Alaska's hard-hit tourism economy. We are doing everything in our power to resume cruising in the U.S. as soon as possible so that we can provide additional much-needed relief to this important region. In addition, we also joined the Shop Local Alaska program, which is a joint initiative between buyAlaska and voyage.com to encourage support for severely impacted small businesses in Alaska. This virtual platform allows consumers live around the globe to browse and purchase a wide range of items from virtual Alaska shops. In our local Miami community, we provided $100,000 worth of Visa gift cards to the cruise members of the International Longshoremen’s Association Local 1416, who saw over 60% of their business wiped out nearly overnight with the suspension of cruise voyages. We were proud to support this pillar of the local communities, which has been providing longshore labor to Port Miami for over 85 years and holds their historic position as the oldest black union in Florida. As part of our ongoing humanitarian efforts and in the spirit of giving back, we also provided more than $2 million in in-kind humanitarian relief to support various community organizations worldwide throughout 2020 and 2021. This support was directed to a variety of efforts, including local food banks, disaster relief, and COVID-19 recovery efforts. In addition, in celebration of teacher appreciation week on Monday, we re-launched our Giving Joy contest, which provides educators with 100 free cruises and a chance to win up to $25,000 in cash awards for their schools. Throughout this unprecedented period, countless teachers have worked tirelessly to give their all to their students, and we believe that now more than ever, they deserve our recognition and gratitude. On the environmental front, we are honored to receive the prestigious 2021 AGC Build America Merit Award for environmental enhancement for our newly constructed double ship pier at Ward Cove in Ketchikan, Alaska. Through this project, we were able to transform Ward Cove, a superfund site, into a sustainable, environmentally friendly and entertaining site for the local community and cruise visitors alike. Going forward, we continue to be focused on enhancing our ESG disclosures to provide additional transparency. And I look forward to sharing additional details with you as we continue on our ESG journey. Turning to Slide 16, I'd like to leave you with a few final key takeaways. First, we are putting health and safety at the forefront of our return-to-service plan as demonstrated by our science-backed SailSAFE health and safety program, which includes 100% vaccination of all guests and crew in addition to comprehensive protocols. We will continue to work with our expert advisors to evolve these protocols over time with the latest science and technology developments. We are focused on our Great Cruise Comeback with our phased voyage resumption plans, both within and outside of U.S. ports. At the same time, we are keeping our longer-term strategic and financial priorities in focus as we execute on our recovery plans. And lastly, we continue to experience strong future demand for cruising across all three of our award-winning brands with very positive booking and pricing trends for 2022 and beyond. Overall, I am more hopeful today than when I spoke with you last. I can't thank enough our dedicated and passionate team members around the globe for all their hard work and perseverance, which has brought us to this critical point and which will propel us forward. We still have a long road to full recovery ahead of us, but we are optimistic and encouraged by the progress we have recently made towards the resumption of cruising, as well as the continued robust demand we are seeing from our loyal guests. We can't wait to get back to what we do best, providing guests with incredible experiences and lifetime memories, and our shareholders with industry-leading financial in year-over-year improved financial results. And with that, Josh, please let's open the call for questions.

Thanks. Good morning. I guess a quick clarification on pricing. If we look at the individual ship brands, what are you seeing in pricing both including and excluding FCCs?

Hi Steve, good morning. They're up, and they're up sequentially; we raised prices beginning at the start of the second quarter. I'm just amazed at how much pricing power we actually have, given the difficulties that we all know about and the relatively low marketing spend that we have put out in the last quarter and a half or so. And so it's – you hear about inflation; inflation means prices go up, and it's good to see that we too are seeing the positive side of inflation, which is pricing power, so we're very pleased with that.

And I guess as a follow-up, since you mentioned the inflation, there has obviously been a lot of talk of labor shortages in the hospitality industry, but of course, you have a bit of a different labor model. So I'm curious, as you start prepping for resume sailing, what are you seeing on the labor front, and how should investors generally be thinking through the puts and takes between inflation versus the efficiency actions on your overall cost structure?

Yes, and we were just talking about it before the call. Over 95% of our crew are non-American nationals, so we're not seeing any kind of pressure on the labor side. The biggest issue on labor for us getting the crew back on the ships is the various travel restrictions that still exist around the world. Visas, consulates, and embassies are slow in issuing visas, and of course, we've committed to 100% vaccination of crew. So putting the crew together with a vaccine is a challenge that may impact our ability to stand up ships in the future. But we don't really believe that it will, with vaccines coming on – the surplus of vaccines now coming on pretty strong, at least around the U.S., we feel that we'll be able to stand up the vessels at a pretty good clip.

That's helpful. Thanks. I'll go to the Florida, looking back out there.

Thanks, Steve.

Hey, good morning, everyone. Thanks for taking my questions. Frank, I was hoping you could provide a little further on the CDC's announcement yesterday. And wondering if you thought that the spirit of the update from them was aligned with the CDC's own goal of getting you guys sailing back in July. And then, specific to your comment, which parts of the CSO, which I know may not apply to you in the end, did you think were more rocky or steeper than expected?

Look, I think everybody has the same goal of getting the industry back in operation. The CDC themselves have stated that cruising or any activity cannot be zero risk. They've acknowledged that vaccines are the game changer, that's why society is racing towards vaccinations as fast as possible, which is why we proposed to the CDC back on April 5, an ironclad multi-prong approach to the situation, which is everyone on board has to be vaccinated. So I have to tell you that I am disappointed at first read; I'm going to give the CDC an opportunity to expand and clarify. We have a call with them this afternoon on some of their requirements; for example, as we read yesterday's pronouncement, even though everyone on board would be vaccinated, in between bites of your meal and in between sips of your beverage, you have to put on your mask, take off your mask. So nobody should order soup because your mask might get sloppy. So that's, to me, just preposterous; it's not in the spirit of where the country is heading, where President Biden wants to open the country, 70% of American adults will be vaccinated by the beginning of the third quarter. So we hope we're reading it wrong; we hope that there would be clarification. Quite frankly, we're hoping that these – some of these more onerous requirements in Phase 2b only apply to cruises or ships or brands or companies that are not going to vaccinate 95% of passengers and 98% of crew, as mandated by the CDC. We hope that if you do achieve 95%, 98%, or even better, the 100% that Norwegian is proposing, that there won't be a need for such impractical, onerous, burdensome requirements. So we'll see what happens over the next few days as we engage with them – reengage with them on these particular phases. But certainly on first read, we were disappointed.

That's really helpful. Thanks for that. And then a follow-up, maybe an impossible hypothetical. But if everything went well from here on out with the CDC in the very near term, like you get those positive revisions you're looking for in July, and it looks like the July is going to happen best-case scenario, and again, you find this out, let's say tomorrow, best-case scenario, how many additional ships do you think you could launch for July in the U.S.?

None. I mean, the July U.S. launch, at least from our company, is just not possible. It was possible back in early April when we proposed to the CDC 100% vaccination; we've always said it takes about 90 days to stand up a vessel. So, from April 5, when we submitted our proposal, 90 days would have been early July, and that was possible, but today we're in early May, so now we're looking past that. But look there is more to it than just what the CDC says; there is only so much capacity to be able to stand up vessels. Standing up a vessel after a 15, 18 month cold layup is not an overnight exercise. It takes a while, and making it more complicated is the travel restrictions for crew and the vaccination mandates that we are imposing for crew. So we are focused on standing up our first five vessels that we've announced – first six vessels that we've announced for Norwegian Ocean and region outside the U.S., as you know, we the industry, we our company regularly operate vessels outside the U.S., especially in the summer season where Europe is the big drop. And so July, August, September is summer, and the best and highest use for our vessels is to operate in Europe, and that's what we're doing. In a couple of occasions, we are standing up vessels in the Caribbean, because the CDC up to now has not given us a pathway. We'll see how things progress over time. But remember it is a seasonal industry and outside of Alaska, which is in doubt, not only because of the CDC but because of the Canadian situation. Outside of Alaska, the world’s cruise leads are typically outside of the U.S. in the summertime; we're cruising elsewhere, primarily in the Mediterranean and Northern Europe, etc. So seasonality plays a big role, as well the final CDC regulations will play a big role.

And Brandt, as we've always said, we're not in a race. We want to do this properly; we want to instill confidence in our passengers, our guests, all of our constituents. So we want to do it in a methodical manner, and it's important that we just start the momentum going; that's the key.

Got it. Thanks for that, guys, and good luck.

Hey guys, good morning. So Frank, I guess I'm a little bit confused here. I mean, you guys have already indicated that all of your guests and all your crew are going to have to be vaccinated. So am I not reading this right from the CDC yesterday that you would be able to skip the simulated cruises and be able to start North American cruising sooner rather than later? And, if you did go down the path of participating in the simulated cruises for certain ships that don't meet those vaccine mandates, do you believe that 60-day wait period would still be in place, or would that get accelerated?

Good morning, Steve. We're going to have one rule and one rule only, and that is at least at the beginning, 100% of our guests and our crew will be vaccinated. We're not going to pick and choose that this ship is less safe than another ship; it's one rule covers everyone, whether you're sailing in Europe, sailing out of the Caribbean, or sailing out of the U.S. So, I really haven't paid too much attention to the latest simulated voyages because we don't plan on participating in that program. We're going to be fully vaccinated and therefore we won't have to. So I just – I don't know the answer to your question in terms of timing.

Okay. Got you. And let me ask this a little bit differently then. So you obviously have been in front of the CDC and you've had conversations with the CDC, and I'm sure you've asked this question to them. But how can they differentiate between you guys and, let's take, for example, the airline industry? So if I'm going in an airline, I don't have to be vaccinated; there are no social distancing requirements. If I go on a cruise line on one of your ships, everybody is going to be vaccinated. How are they differentiating there?

Steve, you just threw a piece of red meat at me. I – listen, they just won't answer it. We're perplexed or flabbergasted; we're outraged. Airplanes, casinos, just about every venue. And when we talk about – we're willing to vaccinate every single person aboard the cruise ship. There isn't another venue on earth, not a school, not a factory, not your office building, apartment building, much less an entertainment venue like a casino, hotel or resort that can make that claim. We will have – we will be the safest place on earth by definition. On top of that vaccination mandate, we're going to implement the 74 healthy sail panel recommendations; that one-two punch is unbeatable; no one on earth has it, yet the CDC continues to treat us differently, we dare to say unfairly. And look, it's not like the CDC has done a great job of controlling the virus around the country. We ranked number one in the world for the most infections, the most hospitalization, I think the most deaths; yet they pick on the cruise industry to an extreme that is just unbelievable, unexplainable and frustrates us and no one. We're hopeful that the discussions that we've been having lately with them, these two times a week calls will result in continued improvement. We saw improvement when they announced last Wednesday night, clarifications to the original Phase 2a; we're certainly going to let them know this afternoon that what they published for a Phase 2b and Phase 3 is unacceptable in many areas. And that we're again, hopeful at this point, I can't say more than hopeful that clarifications will come soon to alleviate the pain points that we've identified.

And if I could ask one more quick one for probably for Mark. Mark, whether you started North American cruising, July, August, September, whatever timeframe, obviously you're going to have some operations around Europe and other parts of the Caribbean in the near-term. I guess the question mark is, your current liquidity position, do you feel that it's pretty adequate at this point, meaning you feel comfortable enough with where you sit today?

Hi, Steve. Look, we have a very solid liquidity position today, almost $3.5 billion at the end of the quarter. So we feel like we have a great foundation going forward. We still have a sufficient amount of tools in our toolbox, should we need it? But the key really is we have to stay ahead of our needs, but the key is that they're still relatively uncertain; there is a lot of uncertainty out there. So we have to watch that while we're certainly encouraged with the recent momentum and the discussions that have taken place and with the restart that certainly bodes well for us and the rest of the industry; so we just need to see that continued momentum going forward. But we do have tools should we need it, but we feel we're in a very strong position as we sit here today.

Okay, great. Thanks guys. Best of luck.

Hi, good morning, everyone. Frank, you had talked about having complete vaccinations to start with out of the U.S. overcoming a hurdle with the CDC; however, you have Florida prohibiting customers and patrons of businesses from providing any documentation regarding certifying a COVID-19 vaccine. How do you plan to deal with that Florida law in this situation? Thank you.

Yes. That's an issue, Patrick. We’ve had discussions with the Governor's office; those continue. But it is a classic state versus Federal Government issue. Legally, lawyers believe that federal law applies and not state law, but I'm not a lawyer. We hope that this doesn't become a legal football or a political football. But at the end of the day, cruise ships have motors, propellers, and rudders, and God forbid we can't operate in the state of Florida for whatever reason, then there are other states that we do operate from. We certainly hope that doesn't come to that. Everyone wants to operate out of Florida; it's a very lucrative market, it's close drive market. But it is an issue we can't ignore. And we hope that everyone is pushing in the same direction, which is, we want to resume cruising in a safe manner, especially at the beginning. Things might be different six months from now or a year from now, but today, with the pandemic still being front and center in everybody's mind, and we're just getting out of the worst part of it just weeks ago, I think everyone should be wanting to start cruising in the safest possible manner. And that's exactly what the Norwegian Cruise Line Holdings plan does: a 100% vaccination of both crew and passengers. For the life of me, I don't understand 98% and not 100% percent. So you have a big ship. You have 1,800 crew members on board, and you're going to vaccinate 1,764 of them, but not 36. I mean, what a loophole to allow potential COVID to be introduced in the crew area. 100%, at least at the beginning, should be the model. And if the CDC wants to go in a different direction, the rest of the industry wants to go – great, we want to go 100%. We want clearance for 100%. And as of today, which is a little over a month since we submitted our proposal to the CDC, we've not yet heard back from them. And that is very disappointing.

Okay. Thank you for that detailed answer.

Thank you. Like everyone else, I have questions about the restart and timing, but I know that there aren't all the answers. So I actually, I'm going to ask a question. One of the slides talking about the recovery plan mentioned private island infrastructure and even ahead of maybe some de-leveraging. So I'm just wondering if that is something relate to the reopening plan that you felt you needed, given that there may be limited capacity to private islands and just kind of wanted to hear what that reference may be. Thanks.

Hi, Robin. It's Mark. So look, as we look at our path going forward in our plans, medium and long term, certainly de-levering is a critical component of what we want to do. We're continuously looking at that. When we talk about our islands and our infrastructure, we've been talking about this for a while that we believe the private islands are a unique destination that we can continue to monetize in a positive economic way. That said, we are not targeting anything with our comeback that would force us to have significant CapEx around that. We're simply keeping it on our radar that as we recover and as we rebuild, those are opportunities where we can invest and see a significant return on. So I wouldn't read too much into it, but as we go forward, we're going to balance all needs, whether it's de-levering, trying to take out some debt, investing in the fleet, investing in our islands, investments to become more efficient. That's all going to be in our playbook, and we'll balance the needs accordingly.

Okay, great. Thank you very much.

Hi, good morning. I don't think you guys have mentioned the demand that you've seen on the three ships that you put into the Caribbean and announced last month. So if there's any insight into how pent-up demand has played out for those itineraries, I'd love to hear it. And then I do think the sourcing of cruisers has been a little bit more geographically homogeneous for some of the other cruise lines and what they have currently announced in Europe. So are there any logistical difficulties we should be thinking about when you're sourcing across geographies, or because of the vaccination requirement, is that not as much a problem? Thanks.

Yes. Thank you, Jamie. Your first question: all three of the initial sailings we announced for Norwegian – one vessel out of Athens for the Greek Isles is doing incredibly well. And to tie that with your second question, consistent with our prior history, a little over 80% of the people who are booked on those cruises out of Greece are American. So Americans are willing to get on an airplane and fly over there. The two sailings out of the Caribbean are doing better than expected. Remember that normally Caribbean sailings out of Miami and out of South Florida – this is the low season. So we have two shifts; we normally have one. So in relative terms, they're not going to be the highest producing vessels in terms of yields, but given what we expected, they were doing better than expected, especially given the fact that we introduced them only about a month ago. And so the booking window is very, very compressed, but again, speaking to the pent-up demand, it's filling up quickly. I'm glad we did it; it certainly beat keeping the ship laid up. We would have preferred to start those vessels in Alaska, start those vessels in Europe, but because of other reasons, we couldn't until the next best thing was to start new home ports. We'll see what happens. We're very encouraged, especially with the vessel out of the Dominican Republic. The DR has a very good airlift to the U.S. I believe it's the number one destination for Americans to the Caribbean, and who knows; that vessel might prove to be so profitable there that it never returns back to U.S. waters, which would be again one of the economic casualties of this prolonged CDC-induced suspension.

Thank you.

Hi, thanks. Question on longer-term supply/demand dynamics; pre-COVID, there was concern in the industry of elevated capacity additions, limited pricing power based on what you're seeing today with scrapping or delaying of the scheduled arrivals. How much lower do you think industry capacity ends up shaking out over the next couple of years? And what are you seeing early on right now for longer-dated sailings in 2022 and 2023? And how does that shape your view of industry pricing going forward?

So that's nine questions in one. I'll try to remember them. Look, I think the narrative of too much capacity coming online pre-pandemic had pretty much been debunked. All the cruise industries were taking on the new delivery, digesting that new capacity very nicely and increasing pricing. And so our comeback always was, we only have 28 ships. There are many unserved – underserved markets that we simply don't have shifts to operate in. We're eager to get our hands on our new vessels, all nine of them across the three brands. And what we're seeing now with the pandemic is pricing is strong; demand is stronger than ever. To give you a nugget of data: the Oceania and Regent brands reached their 50% load factor for 2022 over 100 days earlier than they did for the record year of 2019. Nearly four months, they hit their 50% load factor mark earlier than ever before, and at higher prices. So pricing power is there. In terms of capacity exits, I think from what I can see – and I don't know because different companies, you've got to ask any individual company – but from what I can see, the capacity exits that have already occurred. We have the youngest fleet in the industry, so we never considered any exits and still haven't. The order book in the future hasn't changed; so they're coming with very, very few delays, and whatever is delayed is delayed by a few weeks, a month or so. Look, the industry was healthy as heck before the pandemic. We're seeing during the pandemic how resilient it is and how much pent-up demand there is. We just need to get started; we just need to get all these ridiculous regulations, this overreach eliminated. And I'll tell you this: if we could operate given what's on the books right now for 2020, if we can operate the itineraries that we're actually selling, 2022 could be a record year. That's how good things are, but the big risk is can we operate? Are we going to have to continue to cancel sailings because of this rolling conditional sail order, which is very difficult to comply with? And it's not just the CDC; let's say, let me try to be a little fair here. The rest of the world has got to open up as well. The CDC affects U.S. embarking, disembarking guests, but the rest of Europe has to open up; Asia has to open up; South America has to open up. Remember, this is a global industry; cruise companies visit 500 ports around the world, and only a handful are open today. And so that's the risk: how quickly can the world return to normal in opening up the ports, lifting the travel restrictions, etc. But from a pure market dynamic point of view, 2022 would be a record year.

That's really helpful. Thank you.

And Josh, we have time for one last question.

Thank you for taking my questions, and congratulations on fighting this good fight and almost getting there. Just a kind of a couple of quick questions. Do you think that the demand is even greater than you're experiencing? Because a lot of people may be hesitant to book, but once they know they can book and the rules are clear, that you will see maybe travel agents are saying, I have a bunch of people ready to book once it's ready to go. And also, which ones of your lines are seeing the strongest demand and the best pricing? And then, one last thing: a lot of the travel industry has started to embrace the concept that’s been driven by a certain company that books houses as working from home doesn't have to be your home, and the work from anywhere can be anywhere. And maybe there's an opportunity to address people that want to work from anywhere, including a cruise ship from time to time; that would be a great place to work.

Yes. I don't know. I think that's a little far-fetched. And then when you work from home, because you have this incredible fast internet service, as you know, internet service on a cruise ship in the middle of the ocean is not optimal. So I wouldn't get too carried away on that one, Ivan. Look, in terms of overall demand, we're hitting only on partial cylinders. The U.S. is by far the biggest driver of new demand. Even though we have 50,000 cases a day and all the restrictions that we still have to live with and the news cycle and everything else, Europe for the most part has not reopened in terms of robust marketing. The UK is doing okay; Australia, New Zealand, which I think you know, has always been number three, number four top source market for us, is completely closed down. So the fact that we're doing as well as we're doing with marketing spend that is in the neighborhood of 30% to 40% of what we normally spend, indicates that the news cycle and the travel restrictions are creating uncertainty. The international source markets for the most part have been sub-optimal. Like I said, in my prepared remarks, the pent-up demand is deep; 50 million people. By the time summer rolls around, 33 million people cruise a year; we will have been shut down 18 months. That's 50 million people that would have cruised, and so I think we have a pent-up demand tail that we're going to be able to enjoy over the next couple of years, certainly in 2022 and 2023, and perhaps beyond because look, it's sort of like a yin and yang. We've gone with no cruising was zero. These people want to cruise, and they're going to cruise in the future. We believe that sets up a beautiful dynamic for increased pricing, and we're taking advantage of it to be as well booked as we are. And again, I gave you a nugget that Oceania and Regent hit their 50% load factor for 2022 over 100 days earlier than they ever had before, and their pricing is up. Even with the FCC dilution, it's just unbelievable. Just let us cruise, CDC, and we'll have incredible financial results. Just let us cruise.

And Ivan, your comment on the demand getting better. I think you're spot on; we are seeing that with data points. When we talk about our booking volumes that have doubled, we see our ATS continually growing. So as consumers get more certainty and more comfortable, I think there are good signs that should continue and continue strong. So we're very hopeful around that.

Well, congratulations on managing this so well and really all on your own because, like other industries, you have received so far no help. So hopefully we're getting there soon. So good luck.

Before we go, I'd like to remind everyone that our annual general meeting is coming up on May 20. This year, we have a number of very important proposals on the ballot, including an increase in our authorized share capital. We're extremely appreciative of the support we've received from our shareholders during this extraordinary time, and we're asking for our shareholders' continued support. Please vote and support our board's recommendations for our annual general meeting proposals so that we have the flexibility to continue to respond to the unprecedented challenges of the pandemic. Thank you again, everyone, for your time and support. And as always, we'll be available to answer any of your questions. Have a great day and stay well.