Imagine waking up to a new, beautiful view every day. Instead of packing and unpacking your bags, all you need to do is wander around the ship and enjoy the various activities! Whether you’re looking for an adventure or a relaxing escape, a cruise can provide it all. Plus there’s the added convenience of having everything in one giant floating hotel. Cruises also provide wonderful activities to ports of call in exciting destinations. And when it’s time for dinner, there are countless delicious options to choose from. No wonder cruises are so popular!
So, are there benefits to owning Norwegian Cruise Line Holdings stock? Yes! One benefit of going on a NCL cruise – if you are a shareholder – is the ability to avail of onboard credits (OBCs). When you are a shareholder, it is YOUR company after all. So why not take some benefits? We’re not talking about upside down pineapples here, just onboard credits. I will leave the pineapple discussion for the others! So how do OBCs work and how can you claim them? Let’s dig in!
Norwegian wants to acknowledge its shareholders who also become customers, so if you own 100 shares or more of NCLH (NYSE:NCLH), then you’re all set to receive some perks through onboard credits! You will receive one OBC per shareholder-occupied stateroom. Onboard credits are a type of currency that can be used onboard Norwegian’s cruise ships. Guests can use their onboard credits to purchase drinks, souvenirs, spa treatments, book shore excursions, and more. The benefits vary based mainly on the duration of the cruise so it’s important to pay attention to this. I discuss this further below.
How to apply for Onboard Benefits for Norwegian Cruise Line Holdings
The process for the applying for the onboard credits is very straight forward. You simply have to submit NCL’s dedicated electronic application form.
Please have the following information ready with you:
- Ship and sailing date
- Reservation number
- One of the following:
- A photocopy of your shareholder proxy card; or
- A brokerage statement which shows your ownership of the 100 NCLH shares (NCLH shares that are traded on the NYSE). Note that the name on the brokerage statement must match the name on the reservation.
You can then send them form by regular mail or email to the appropriate address, as provided below.
Norwegian Cruise Lines
Email: [email protected]
Shareholder Benefit Department
7665 Corporate Center Drive
Miami, FL 33126
Email: [email protected] oceaniacruises.com
Regent Seven Seas Cruises
Regent Seven Seas Cruises
Shareholder Benefit Department
1401 NW 136th Avenue, Suite 101
Sunrise, FL 33323
Email: [email protected]
Exclusions and Important Conditions
There are some important exclusions to keep in mind. You are not eligible to receive these benefits if:
- You are trying to combine these benefits with another offer.
- You are an employee or agent of Norwegian Cruise Line Holdings Ltd. or its subsidiaries and affiliates, a travel agent or tour operator.
- You are on a chartered sailing.
It is also important to note that the benefit is not transferrable, so you cannot pass on the benefit to someone else. You must be going on the cruise and the OBC will only be given to you (and the people in your party in your stateroom).
All taxes have to paid out of pocket and your OBC expires when your cruise ends.
When to apply for Onboard Credits for a NCL cruise
Norwegian does not specify when to apply for the onboard credits, but other cruise lines Carnival and Royal Caribbean recommend that you must apply for the onboard credits at least 3-4 weeks prior to your departure.
I would therefore stick to the same timeline – and perhaps give it even a few extra weeks, if you have that time luxury. It’s better to be safe than sorry. There’s no point waiting till the end and letting 1 week get in the way of you, a great vacation, and some nice perks!
The Onboard Credit provided to shareholders and stockholders is based primarily on the duration of the voyage.
|Onboard credit per stateroom|
on sailings of:
|15 or more days||US $250|
|7 to 14 days||US $100|
|6 days or less||US $50|
These benefits apply to all three of NCLH’s brands: Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises.
In the post-Covid world, I do not think it is worth buying NCLH shares simply to claim the shareholder benefits. As you may be aware, the cruise industry was hit very badly during Covid as all voyages were cancelled. In order to pay the bills, all the cruise companies had to borrow huge sums of money from banks and from the financial markets. This meant that the balance sheets of all the cruise lines went from being reasonable to now being in a vary precarious state.
While President Trump was favourably disposed to bail out the cruise lines with cheap financing, the fact that cruise companies pay zero income tax meant that Congress did not want to be seen bailing them out using taxpayers’ funds.
NCL’s net debt level has ballooned from around $6.8 billion at the end of 2019 to $13.5 billion in Q3 2022. Meanwhile, earnings at the company have yet to recover from the Covid shock are have been consistently negative since 2020. Put the two together – around 2x higher net debt with a loss-making operation – and you have a recipe for disaster. It will likely take NCLH several years or more of running at pre-Covid profitability levels to reduce their debt back to their pre-Covid level. This is a very long time!
Due to Norwegian’s significantly worsened financial position, the shares have also become significantly more volatile. The shares easily move 5-10% in one day. And while that might not seem like much, it’s important to remember that the shares have declined by 30% just between January and December of 2022. In late September, the shares were down 50%!
For these reasons, you can easily end up losing more on the shares than you will gain in OBCs.
Let’s look at the numbers: based on the current share price of $15.35 for NCLH, and the minimum 100-share ownership requirement, you’re looking at a minimum investment of $1,535.
Based on this investment, a 10% decline in the share prices (whether in one day or over a few days or months), would cost you $153. This is significant in comparison to the benefits on offer, so in my mind it’s not worth the risk – especially if you’re buying these shares just to claim the benefits.
Yes, if the shares go back up, you could gain a lot of money too. But at this point, that’s just pure speculation. Sure you can have a little fun with the shares if they go up, but unless you really know what you are doing, you’re better off just going on that cruise. Plus its more enjoyable to get lucky in the stateroom than pray and hope that maybe you can get lucky in the markets! If you want to make money in the markets, there are better options to consider.
Is NCLH a good stock to buy?
Given Norwegian’s ridiculously high debt level and the difficult position that they’re in, unfortunately for no fault of their own, I do not feel that NCLH is a good stock to buy as an investment. One could buy NCLH in the hope that they recover, but that would purely be speculation, not investing. Unfortunately, the situation is similar across the industry, with other companies like Carnival and Royal Caribbean also struggling.
Investing means you are taking a calculated bet and you only take that bet when the risk vs reward dynamics are skewed heavily in your favour. At this point, for the reasons I laid out above, I do not feel that rewards heavily outweigh the risks.
Will Norwegian stock recover?
The path to recovery for NCLH shares is murky. The company has to pay off a significant amount of debt in order to bring its balance sheet to a healthy level, or at least back to its pre-Covid levels. Based on the expected free cash flow generation of around $1.2 billion annually, starting in 2024, it will take a long time to pay off the $6 billion of incremental debt that they have taken on since 2020.
While all of this is doable, there may be many more macroeconomic and geopolitical challenges that they company may face during that period. The first few years are the most crucial, as that is when the company is most vulnerable. Also it’s entirely possible that the company might issue more shares, so this would dilute your existing share ownership and reduce the eventual price that you would receive.
If the management can effectively steer the company through the next 3 to 5 years without any hiccups – this means generating profits and paying off debt with it – the stock may recover in the years beyond that. But do you want to own the shares during such a volatile period?
You are likely better off investing in opportunities where the odds are in your favour. I would recommend monitoring NCL’s financials over the next few years and if it looks like they’re on track, it would be worth buying for an eventual recovery. But not right now!
Does NCL stock pay dividends?
No, Norwegian Cruise Line Holdings stock (NYSE:NCLH) does not pay dividends and has never paid dividends. I do not expect NCL to pay dividends for the foreseeable future as their debt load is simply too high. It may take them another several years before they can start paying out a dividend without jeopardizing their balance sheet.
In order to buy NCLH shares, you will need to have a brokerage account that allows you to buy shares. Many brokerages allow you to open an account easily, but there may be a minimum amount of deposit required first.
If you are in the UK, you can buy Norwegian shares through brokerages such as Fineco, Moneyfarm, Hargreaves Lansdown, and Interactive Investors. You can learn more about other options on our articles covering the Best Way to Buy US Stocks in the UK and the Best Investment Apps.
Can I claim onboard credit multiple times with Norwegian?
Yes, you can request this benefit multiple times! However it can only be claimed once per trip per shareholder. This means that if you book 3 separate trips with NCL, then you can claim this benefit 3 times, once for each trip! All their terms and conditions apply.
No, Norwegian Cruise Line (NCL) shareholders do not receive any discounts for booking a cruise. Instead, shareholders receiving benefits in the form of Onboard Credits. The value of these credits ranges from $50 to $250, depending on the duration of the cruise.
Yes, there is. The electronic form is available at this link. You will need to have ready the details of your trip along with a brokerage statement that shows proof of ownership of 100 RCL shares. Please do this at least 3-4 weeks prior to your departure date.