Viking will not be your typical cruise operator.
You won't find children aboard the smaller, more upscale ships. In fact, the cruise line doesn't hide the undeniable fact that it's targeting high-income baby boomers.
Casinos? Not on these cruise ships.
In Viking Holdings' prospectus, the corporate said its cruises were for the “thinking person,” underscoring its efforts to appeal to the newborn boomer traveler in search of adventure and recent experiences.
“They have the money, they have the time and in my opinion you know what happens when you try to do everything for everyone? You don't do anything well. So we are very, very clearly focused,” Viking CEO and Chairman Torstein Hagen told CNBC.
The luxury cruise line was in search of a valuation of $10.4 billion when it went public on the New York Stock Exchange on Wednesday, making it the third-largest cruise operator after itself royal Caribbean And carnival. Norwegian cruise line is the fourth largest. Viking began trading Wednesday at $26.15 per share under the ticker symbol “VIK“after a price of $24 per share.
The company closed its first day of trading up more than 8%, trading at $26.10 per share.
Viking expanded its IPO after existing shareholders decided to sell an additional 9 million shares due to strong demand from mutual fund investors, according to a source familiar with the situation.
In 1997 Viking had four ships. The fleet has quickly grown to 92 ships, 80 of which are river vessels, plying the world's largest rivers, including the Seine in France and the Nile in Egypt.
“We are different because when you talk about the big cruise ships, they are big in the Caribbean,” Hagen said. “We have a tiny part in the Caribbean. The rest is Europe.”
The timing of Viking's IPO coincides with a powerful rebound in cruise bookings. April twenty fifth, Royal Caribbean increased its guidelines for 2024 given the positive outlook for the sector.
“Cruising has really come to the forefront as a competitive travel option,” Royal Caribbean CEO Jason Liberty said in a recent interview with CNBC. “The entire travel industry is $1.9 trillion. The cruise industry accounts for $56 billion of this. I think the cruise industry is at a completely different level than it was before the pandemic.”
While the company's prospectus showed Viking had revenue of $4.71 billion in 2023, the company reported a net loss for the year. What excites investors is the company's revenue per passenger of $7,251, which is much higher than any other publicly traded cruise line. Viking's premium pricing allows you to make more money with each customer.
Investors will also be looking for details on Viking's expansion plans. Earlier this month, the Norwegian cruise line announced that it had ordered eight new ships, scheduled for delivery over the next 12 years.
Carnival, Royal Caribbean and MSC Cruises all have robust portfolios, raising concerns about excess capacity weighing on demand. But for now, the industry is focused on how well demand has recovered from the pandemic and that, despite higher prices, cruises are still cheaper on average than hotel vacations.
UBS leisure analyst Robin Farley said land-based hotel prices were 25% higher than in 2019. During the same period, cruise ship prices rose 10%.
“The gap between cruises and hotels is huge. That’s what makes cruising attractive right now,” Farley said.
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