CRUISELINES WAVE AN EARLY GOODBYE TO 2014 WHAT DOES THE EARLY START TO WAVE MEAN FOR CCL/RCL/NCLH?

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1 CRUISELINES WAVE AN EARLY GOODBYE TO 2014 WHAT DOES THE EARLY START TO WAVE MEAN FOR CCL/RCL/NCLH? JANUARY 9, 2015 Todd Jordan Felix Wang, CFA HEDGEYE.COM JANUARY 9,

2 CALL TO ACTION Wave Season promotions began earlier than usual for many of the operators. Given the difficult 2014 environment in the Caribbean, we re not surprised. The early promoters seem to be the relatively struggling brands bookings curve could be pushed out a little bit at the expense of lower pricing and promos. WAVE PROMOS Below we compare the Wave-related promotion for many of the major cruise operators for 2015 and Obviously, some of the promotions could also vary depending on the travel agency. Here are some takeaways: Celebrity fired the first salvo in early November Many of the operators who had been discounting heavily in the Caribbean in 2014 (Princess, Holland America, Celebrity, and Royal Caribbean (ex Quantum/Anthem)) announced their 2015 Wave deals earlier than last year by 1-3 weeks. Pricing at some mass brands such as Carnival/MSC/Norwegian were already under pressure and as such, wave promotions were not accelerated In some cases, operators stagger the timing of multiple Wave deals Wave offerings from the upper premium/luxury brands focus more on offering perks rather than price savings Red 2014 promo Black 2013 promo Azamara 12/15/2014: Wave Choices : 1) Up to $1,000 per couple in onboard credits; or 2) $1,000 in ChoiceAir Credits or 3) stateroom upgrade 12/12/2013: Onshore On Us : Up to $2,000 per couple in free shore excursions on select 2014 Med voyages HEDGEYE.COM JANUARY 9,

3 Carnival 12/16/2014: Early Saver : Save up to 20%. Up to $50 onboard spend. 12/26/2014: Real Deal : Up to $100 onboard spend. Two category upgrades. 12/1/2013: Save Now, Spend Later : Best available rate + 50% reduced deposits 12/12/2013: Wave Season : Savings up to $200 per stateroom on two- to five-day departures and savings of up to $400 per stateroom on voyages of six days or longer. Celebrity 11/10/2014: GO (Upscale upgrade) 11/29/2013: GO Costa Cruises Not released yet but started major Ad campaign on Dec 21, /22/2014: Costa Cruises: Free cabin upgrades Cunard 12/16/2014: 175th Anniversary Sale: Free balcony upgrade; up to $150 onboard credit 12/18/2013: Royal Upgrade Celebration: Free cabin upgrades Holland America 12/8/2014: ReadySetSail : Applies only to the cruise portion of Alaska Land+Sea Journeys. Free cabin upgrades for Alaska, 10% off shore excursions 12/23/2013: Above and Beyond : Above and Beyond promotional fares; a free Signature Beverage Package when booking ocean-view staterooms or above on select Europe cruises or an onboard spending credit of up to $400 per stateroom if booking other destinations; free or reduced third and fourth fares; up to 10% savings on select summer shore excursions when booked before Feb. 28, 2014; and reduced deposits of 50% off the normal deposit rate MSC Cruises 1/5/2015: Greatest Cruise Sale Ever : $200 in stateroom credit, free beverage package with Fantastica Experience 12/6/2013: $150 in onboard credit with ocean view. Sailings for April 12 - Oct 11, 2014 will receive up to $300 in shipboard credit. HEDGEYE.COM JANUARY 9,

4 Norwegian 12/17/2014: 3 offers : Customers who book a cruise of five nights or longer by Jan. 31 can choose a free Ultimate Dining Package, a free Ultimate Beverage Package or up to $300 in on-board credits. Customers booking a cruise in Europe or Hawaii can choose two of three offers. 12/10/2013: Free cabin upgrades Oceania 12/1/2014: 2 for 1 : 2 for 1 cruise fares and free airfare on select Europe sailings. 12/23/2013: 2 for 1 : Alaska cruises receive 2 for 1 cruise fares, free airfare, and early booking savings of up to $2000 per stateroom 1/6/2014: 2 for 1 : Caribbean cruises get 2 for 1 cruise fare, free airfare from 91 gateways, early booking savings up to $3,000 per stateroom Princess 12/3/2014: Anniversary Sale : Up to $500 in savings, up to $200 onboard spending, free specialty 12/16/2013: Make new memories : 3 for free with a free balcony upgrade, $100 shore excursion credit and a free framed formal photograph. Regent 1/5/2015: offerings on select sailings: 2-for-1 Fares Free Roundtrip Air Free Roundtrip Business Class Air* in Penthouse Suites and higher on European Voyages Free Unlimited Shore Excursions Free Luxury Hotel Package in Concierge suites and higher Free Specialty Restaurants Free Unlimited Beverages Including Fine Wines and Premium Spirits Free Open Bars and Lounges Plus In-Suite Mini-Bar Replenished Daily Free Pre-paid Gratuities Free Wi-Fi throughout the Ship in Concierge suites and higher Free Transfers between Airport and Ship 12/31/2013: 2 for 1 European sailings include 2-for-1 fares as well as round-trip airfare. 1/8/2014: Why Choose up to $1,000 per suite shipboard credit, FREE Unlimited WiFi, and Business Class Air from $999 on select sailings. HEDGEYE.COM JANUARY 9,

5 Royal Caribbean 1/1/2015: Vow to WOW sale : $200 onboard, BOGO 50% 1/9/2014: $75 credit when booking an ocean-view cabin. Booking a balcony cabin will get a $150 credit and suite passengers will receive a $300 credit. Will receive an additional $100 in credit when booking a European sailing. Silversea 12/3/2014: Silver Wave : Onboard spend of $500-$1,000 12/16/2013: Two grade upgrade Seabourn 1/5/2015: Signature Savings Event : Free upgrade, reduced rates 1/9/2014: Signature Savings Event : Complimentary veranda suite upgrades, additional savings up to 15% on Combo voyages, US$1,000 per suite shipboard credit for penthouse and premium suites HEDGEYE.COM JANUARY 9,

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8 CONCLUSION While Wave Season usually begins in early January, some Wave offers for 2015 were distributed to agents and the public as early as November. This could be a sign of a longer period of promotional activity and while booking levels should look good on a YoY basis, pricing could be at risk. HEDGEYE.COM JANUARY 9,

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