Cruise line Viking targets $10.4 billion valuation in IPO


Aerial view of the Viking Jupiter cruise ship anchored in the port of Montevideo, on January 5, 2022. 

Ivan Pisarenko | AFP | Getty Images

Viking is not your typical cruise operator.

On board its smaller, upscale vessels, you won’t find any kids. In fact, the cruise line doesn’t hide the fact that it is going after the high-income baby boomer.

Casinos? Not on these cruise ships.

In Viking Holdings’ prospectus, the company says its cruises are for the “thinking person,” underscoring its efforts to appeal to a traveler who seeks adventure and new experiences.

“They have the money, they have the time and, in my belief, the moment you try to do everything for everybody, you know what happens? You do nothing well. So we are very, very clear focused,” Torstein Hagen, CEO and chairman of Viking, told CNBC.

The luxury cruise line is targeting a $10.4 billion valuation in its initial public offering on the New York Stock Exchange on Wednesday, making it the third-largest cruise operator, after Royal Caribbean and Carnival. Norwegian Cruise Line is the fourth largest. Viking priced its IPO at $24 a share and will trade under the ticker symbol “VIK.”

Viking upsized 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.

Viking started in 1997 with four ships and has quickly grown its fleet to 92 vessels. Eighty of those are river-based ships that travel down major rivers around the world including the River Seine in France and the Nile River in Egypt.

“We’re different because when you talk about the big cruise lines, they’re large in the Caribbean,” Hagen said. “We have a tiny sliver in the Caribbean. The rest is Europe.”

The timing of Viking’s IPO coincides with a strong rebound in cruise bookings. Just last week, Royal Caribbean raised its guidance for 2024 amid a bright outlook for the sector.

“Cruising has really come into the forefront as a competitive choice in travel,” Jason Liberty, CEO of Royal Caribbean, said to CNBC last week. “The overall travel industry is $1.9 trillion. The cruise industry is $56 billion of that. I think cruising is at a much different level than it was pre-pandemic.”

While the company’s prospectus showed Viking brought in $4.71 billion in sales in 2023, it did report a net loss for the year. What is getting investors excited is the company’s revenue per passenger of $7,251, which is much higher than any other publicly traded cruise line. Viking’s premium price point allows it make more money on each customer.

Investors will also be looking for details on Viking’s expansion plans. Earlier this month, Norwegian Cruise Line said it ordered eight new ships that are scheduled for delivery over the next 12 years.

Carnival, Royal Caribbean and MSC Cruises all have robust portfolios, which has raised concerns of overcapacity weighing on demand. But for now, the industry is focused on how strong demand has rebounded from the pandemic and that, even with higher prices, cruising is still cheaper on average than hotel vacations.

UBS leisure analyst Robin Farley said land-based hotel rates are 25% higher than 2019 levels. During that same time frame, cruise line rates are up 10%.

“The gap between cruising and hotels is wide. That makes cruise compelling right now,” Farley said.



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