A trader works inside a booth as screens display the Viking cruise line logo on the floor of the New York Stock Exchange.
Stefan Jeremiah | Reuters
Viking is not your typical cruise operator.
On its smaller, luxury boats, you won’t find children. In fact, the cruise line makes no secret of its pursuit of the high-income baby boomer.
Casino; Not on these cruise ships.
In Viking Holdings’ prospectus, the company said its cruises are for the “thinking man,” underscoring its efforts to appeal to the traveler seeking adventure and new experiences.
“They’ve got the money, they’ve got the time and, I believe, when you try to do everything for everybody, you know what happens? You don’t do anything well. So we’re very, very clearly focused,” said Torstein Hagen, CEO and chairman of Viking, told CNBC.
The luxury cruise line targeted a $10.4 billion valuation in its initial public offering on the New York Stock Exchange on Wednesday, making it the third-largest cruise company after Royal Caribbean and Carnival. Norwegian Cruise Line it is the fourth largest. Viking opened trading on Wednesday at $26.15 a share under the ticker “VIKafter pricing at $24 per share.
It closed the first day of trading with gains of more than 8%, ending at $26.10 per share.
Viking raised its IPO after existing shareholders decided to sell an additional 9 million shares amid strong demand from mutual fund investors, according to a source familiar with the situation.
A trader walks past a screen displaying the logo of the cruise company Viking on the floor of the New York Stock Exchange.
Stefan Jeremiah | Reuters
In 1997, Viking had four ships. It quickly grew its fleet to 92 ships, 80 of which are river-based ships that ply the world’s major rivers, including the Seine in France and the Nile in Egypt.
“We’re different because when you talk about the big cruise lines, they’re big in the Caribbean,” Hagen said. “We have a small piece in the Caribbean. The rest is Europe.”
The timing of Viking’s IPO coincides with a strong recovery in cruise bookings. On April 25, Royal Caribbean upload his tutorial to 2024 amid bright prospects for the industry.
“Cruising has really come to the fore as a competitive travel option,” Jason Liberty, CEO of Royal Caribbean, told CNBC in a recent interview. “The total travel industry is $1.9 trillion. The cruise industry is $56 billion of that. I think cruising is at a very different level than it was before the pandemic.”
While the company’s prospectus showed Viking making sales of $4.71 billion in 2023, it reported a net loss for the year. What excites investors is the company’s revenue per passenger of $7,251, which is far higher than that of any other publicly traded cruise line. Viking’s premium price allows it to make more money on each customer.
Investors will also be looking for details on Viking’s expansion plans. Earlier this month, Norwegian Cruise Line announced that it had ordered eight new ships scheduled for delivery over the next 12 years.
A model of a Viking cruise ship is on display at the New York Stock Exchange.
Stefan Jeremiah | Reuters
Carnival, Royal Caribbean and MSC Cruises all have strong portfolios, which has raised concerns about overcapacity weighing on demand. But for now, the industry is focused on how well demand has recovered from the pandemic and that, even with higher prices, a cruise is still cheaper on average than a hotel vacation.
UBS leisure analyst Robin Farley said land-based hotel prices are 25% higher than in 2019. Over the same period, cruise line prices are up 10%.
“The gap between cruising and hotels is wide. That’s what makes cruising exciting right now,” Farley said.