Mark Kempa: Steve, and related to the margin improvement and flow-through, let me highlight what Harry just said on the cost side. We really are changing the DNA of the company. This is not a one-time opportunity. This is a continued culture change. So we want to stress that, and we are committed to it. I think one of the things that sets us apart on in terms of whether if there’s a slowdown, what are the opportunities to try and mitigate that. Look, I think, first and foremost, we have perfected — almost perfected the bundling strategy. And I think that’s been a very good tailwind for us. In addition to that, when you think about the onboard spend, we continue to get smarter and we continue to get better at getting more of the customers’ wallet over time from the point they enter our ecosystem.
And we talked about in our prepared remarks that our pre-cruise revenue sales were up over 80% versus same time in 2019. So I think that is a strategy that we’ll continue to fine-tune. We never get it exactly right. but I think that provides us some additional protection, again, to get that wall over a longer period of time. We are very focused on margin improvement. We’ve said this will be — in our case, this will be a multiyear effort. We don’t see anything structurally in the business that would preclude us from getting back to 2019 margins and better. But given our fleet and our deployment mix, I think it’s going to take us a little bit longer on our path to do that, but we are ultra committed to do so.
Steve Wieczynski: That’s great color. I appreciate that, Mark and Harry. And then second question is maybe if you could give some more color around how 2024 is really kind of shaping up from a booking perspective. And look, I fully understand you guys talked about in the release that you’re booked in an optimal position. But wondering if you could maybe give some more color around the brands themselves, meaning are you seeing any material differences between, let’s say, the Norwegian brand and the two luxury brands into next year?
Harry Sommer: We don’t, Steve, typically comment on a brand-specific basis. I can just reiterate some of the color we gave already. We are in a record booked position for the next 12 months. We’re in a record book position for 2024. If you just want to look at that time period and pricing is higher. So I think past that, we’re going to take some time over the next few months to develop this long-term strategy, which will impact everything from our choices on deployment, investments, CapEx onboard product. And at the end of the process, we’ll be in a good position to give not just guidance for 2024, but clear the clear financial guideposts, if you will, for 2025, 2026 and beyond.
Steve Wieczynski: Okay. Got you. Thanks, guys. Appreciate it.
Operator: [Operator Instructions] The next question comes from the line of Vince Ciepiel with Cleveland Research. Please proceed with your question.
Vince Ciepiel: Great. Thanks. So within the updated 4Q yield guide, it seems like pricing is probably more in line with what you were thinking 90 days ago, while more of the change has been in occupancy. Curious, how much of that is related to Israel, Hawaii? And then as you think into 2024, I believe there previously was a view of maybe one to two points structural headwind from changes in the fleet since pre-COVID times, is that still a good way to think about the occupancy recovery path into next year?
Mark Kempa: Yeah. Hi, Vince, I think when you think about the occupancy, I think that is still a good way to think about it on a normal annualized basis that it will be down somewhere 200 to 300 points about in the zone of 105 to 106. When you think about Q4, it really is all about occupancy. If you look at our metrics, we were guiding or expecting somewhere about 101 to 102 for the fourth quarter. And right now, we’re forecasting roughly 98 and that really is the vast majority related to Israel and the broader Middle East region. We have seen, as we said, an elevated number of cancellations, as well as a lower volume for the close-in sailings, which essentially top off the ship. As well as, as we talked about, we did see some minor hiccups in our late season Asia itineraries, which we believe we fixed from a structural standpoint.
But on the pricing side, look, Q4 pricing was strong. We’re still expecting to deliver 15% to 16% pricing. So when you think about the change in Q4 revenue, it really is the vast majority on the back of the load, which results in about somewhere in the zone of $40 million to $50 million as a result of these isolated conflicts.
Harry Sommer: Yes. And Vince, the only thing I’d add and just to sort of tie this in for a question earlier today, this reinforces our commitment to price integrity, because we didn’t chase trying to fill these close-in cancels with low-yielding business. It makes no sense for us to divert our attention away from 2024 to chase another 100 basis points of occupancy of guests who won’t necessarily be high yielding guests and won’t likely come back. We prefer to keep our focus on 2024, which as we’ve now repeatedly said is shaping up quite well with a record booked position on those forward 12-month basis and for 2024 on a stand-alone basis.
Vince Ciepiel: Thanks and best of luck.
Harry Sommer: Thank you.
Operator: And the next question comes from the line of Robin Farley with UBS. Please proceed.
Harry Sommer: Hi, Robin.
Robin Farley: Hi. How are you? I wonder if you could give a little more color. You mentioned some of the product outside of the Middle East and Hawaii having sort of softer close in? You mentioned Asia and maybe other exotics as well. Can you talk a little bit about what you think may be happening there? Because clearly well-understood what’s happening with Hawaii and the Middle East, but just a little less clear on what you think may be happening in some of those other destinations?
Harry Sommer: I would say that Hawaii and Middle East was widespread. The other area was more what would I say on – what’s the word I’m looking for. It was just partial, it was not as widespread. So, for example, we’ve seen a couple of cruises that go through Turkey. When we talk about Eastern Med that have had a few more than normal closing cancels not so much a suppression of demand for next year, more on the closing cancel. And similarly, we’ve had some cruises as an example, that go from Dubai to India or in those type of regions, which has also seen slightly more closing cancels. But clearly, Hawaii, Middle East are the ones that were widespread across all three brands and most of our Q4 departures, those are the ones for more sporadic.
