Norwegian Cruise Line Holdings (NCLH) CEO Harry Sommer has expressed optimism that ongoing diplomatic efforts to resolve geopolitical tensions in Israel and Ukraine could provide a major boost to the cruise industry. Speaking during the company’s fourth-quarter earnings call, Sommer highlighted that a peaceful resolution to these conflicts could serve as a “significant tailwind” for the company in 2026.
The cruise industry has faced disruptions due to the wars in Ukraine and Israel, impacting itineraries and forcing cruise lines to adjust their operations. NCLH, which operates Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises, has had to modify its European routes due to the ongoing war in Ukraine. Additionally, security concerns in the Middle East have affected travel demand in the region.
Sommer noted that if diplomatic efforts lead to peace, the cruise industry could see a revival in certain markets. He specifically pointed out that NCLH plans to base 11 ships approximately one-third of its fleet in Northern Europe in the summer of 2026. While St. Petersburg, Russia, is currently not included in the company’s itineraries, a peaceful resolution to the Ukraine conflict could allow for its return as a destination.
“If St. Petersburg was to become available in the ’26 season, I think as a company with one-third of our fleet based in that region of the world, we could disproportionately benefit from positive developments in that region,” Sommer said.
While acknowledging the humanitarian importance of peace, Sommer also emphasized that a resolution between Russia and Ukraine could create new business opportunities for NCLH in 2026 or 2027.
Sommer’s remarks also come in the wake of comments from U.S. Secretary of Commerce Howard Lutnick, who suggested that the Biden administration might consider taxing the cruise industry. During a Fox News interview on February 19, Lutnick indicated that new tax policies could be introduced, though no specific details have been provided.
Sommer refrained from speculating on the potential impact of such a tax, stating that it was too early to assess what it would mean for NCLH. However, he commended the administration’s efforts to resolve geopolitical conflicts and emphasized the importance of stability for the travel industry.
“We’re here for the long term, and we are very pro the work that the administration is doing in trying to bring peace to those two regions,” Sommer stated.
Despite uncertainties in some global markets, NCLH has seen strong performance in key regions. Sommer reported that bookings for summer cruises in Europe and Alaska have “outperformed,” helping the company maintain a strong position for the next 12 months.
NCLH’s luxury brands, Oceania and Regent, have experienced slightly slower booking rates than anticipated, but Sommer reassured investors that overall demand remains stable. He noted that the Norwegian Cruise Line brand has been performing better, balancing out the slower growth of its luxury offerings.
“In exchange, the NCL brand is performing a little bit better, but nothing major. It’s not a huge shift from one to another. I think bookings are where we need them to be,” Sommer said.
NCLH executives reported that 2024 was a record-breaking year for the company. The cruise operator achieved total revenue of $9.5 billion, an 11% increase over 2023. Net yield growth increased by 9.9%, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 32% to a record $2.45 billion.
The company also saw an increase in occupancy rates, which climbed to 104.9% for the year, up from 102.9% in 2023. Fourth-quarter occupancy also improved to 100.8% from 99.2% the previous year.
Additionally, NCLH has refinanced $1.8 billion in debt, positioning itself for financial stability as it continues to navigate market changes.
As Norwegian Cruise Line Holdings moves into 2026, the potential for geopolitical stability in Israel and Ukraine could significantly impact its growth strategy. While uncertainties remain regarding possible taxation policies, the company’s strong financial performance and strategic positioning in Europe and Alaska provide a solid foundation for future expansion.
If peace efforts prove successful, NCLH could regain access to key destinations such as St. Petersburg and further strengthen its European market presence, making it a potential beneficiary of diplomatic resolutions in the coming years.
