Good morning, and welcome to the Norwegian Cruise Line Holdings First Quarter 2017 Earnings Conference Call. My name is Elizabeth and I will be your operator. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions for the session will follow at that time. As a reminder to all participants this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Andrea DeMarco, Vice President, Investor Relations and Corporate Communications. Ms. DeMarco, please proceed.

Thank you, Elizabeth. Good morning, everyone, and thank you for joining us for our first quarter 2017 earnings call. I'm joined today by Frank Del Rio, President and Chief Executive Officer of Norwegian Cruise Line Holdings; and Wendy Beck, Executive Vice President and Chief Financial Officer. Frank will begin the call with opening commentary, after which Wendy will follow to discuss results for the quarter as well as provide guidance for 2017 before turning the call back to Frank for closing words. We will then open the call for your questions. As a reminder, this conference call is being simultaneously webcast on the company's Investor Relations website at www.nclhltdinvestor.com and will be available for replay for 30 days following today's call. Before we discuss our results, I would like to cover just a few items. Our press release with first quarter 2017 results was issued this morning and is available on our Investor Relations website. I would also like to review information about forward-looking statements and the use of non-GAAP information as a part of this call. The company's comments today may include statements about expectations for the future. Those expectations are subject to known and unknown risks, uncertainties and other factors that may cause the company's actual results and performance in future periods to be materially different from any future results or performance suggested by these expectations. The company cannot guarantee the accuracy of any forecast or estimate and we undertake no obligation to update forward-looking statements. If you would like more information on risks involved in forward-looking statements please see the company's SEC filings. In addition, some of our comments may reference non-GAAP financial measures, a reconciliation of the most directly comparable GAAP financial measure and other associated disclosures are contained in the company's earnings release. With that I'd like to turn the call over to Frank Del Rio. Frank?

Thank you, Andrea, and good morning, everyone. 2017 has started out strong and I'm pleased to report solid Q1 results. The lively booking momentum we witnessed leading up to our last earnings call continued through the rest of the quarter and into the second quarter to-date, resulting in the best wave season that we and likely the industry has experienced in quite some time. This momentum has resulted in strong booking volumes, coupled with double-digit pricing growth versus same time last year. This positive trend was seen across all our major destinations for all three brands from North American and internationally sourced business. Europe sailings in particular continue to show renewed strength as a result of robust demand from North American consumers with pricing up well into double digits over the last 16-week period, compared to the same time last year. The Caribbean market continues to show strength as well, and is ahead low single-digits in load factor and up high single digits in pricing for the full year versus 2016. In addition, the newest destination in our portfolio of itineraries, Cuba, has and is performing extremely well, both in booking volumes and pricing, which is complementing the overall positive momentum for the year. Since our last call, all three of our brands have now sailed to Havana, and the load factors and pricing premiums on these initial voyages have been very encouraging. This robust operating environment is driven by a strong consumer demand, reasonably priced airfares especially to Europe, and buoyed by a stock market at all time highs. And is being complemented by both our revenue optimization strategies and effective marketing campaigns. Additionally, we have been able to improve the quality of international booked business year-over-year, which is now booking at parity to North American business. These factors…

Thank you, Frank. Good morning. Unless otherwise noted my commentary compares 2017 and 2016 adjusted net yield and adjusted net cruise cost excluding fuel per capacity day metrics on a constant currency basis. I'll begin with commentary on our first quarter results followed by color on booking trends, and then we'll close with our outlook and guidance for second quarter, and full year 2017. I'm pleased to report another quarter of strong financial performance with record revenue. This quarter also marks the 35th consecutive quarter of adjusted EBITDA growth. First quarter results came in ahead of expectations with adjusted earnings per share of $0.40 above guidance of approximately $0.36, driven by strong close-in demand in the Caribbean, coupled with strength in onboard revenue, which drove outperformance in top-line results. Adjusted net yield increased 5.5% or 4.9% on an as-reported basis versus the prior year, outperforming guidance expectations of up 4.5%. Looking at costs, adjusted net cruise cost excluding fuel increased 5.8% on both a constant currency and as-reported basis. Higher than expected expenses related to repairs and maintenance and other ship operating expenses primarily related to technical issues with Norwegian Star, resulted in costs coming in slightly higher than guidance. Turning to fuel, our fuel expense per metric ton net of hedges increased 3.4%, to $453 from $438 in the prior year. Taking a look below the line, interest expense net decreased to $53 million, compared to $59.8 million in the prior year, reflecting a decrease in average debt balances outstanding partially offset by an increase in LIBOR rates. Interest expense was favorable to guidance in part due to favorable rates, as well as the timing on the closing of the committed financing for Project Leonardo. Now let's discuss our outlook for the second quarter. Capacity is expected to increase…

Thank you, Wendy. Another important topic I would like to touch on is the issuance of our 2016 environmental report. As diligent and active custodians of protecting the world's natural resources, including the very oceans on which we make our living, our inaugural report focuses on corporate environmental practices and showcases our programs and initiatives in this critical area, including our newly launched Sail and Sustain program which articulates our mission to continually improve our sustainability culture through innovation, education, and collaboration. Looking beyond 2017, we have an upcoming ship introduction that will make 2018 another exciting and rewarding year. As mentioned earlier, the Norwegian Cruise Line brand will launch Norwegian Bliss in late spring 2018 in the Alaska market becoming the largest cruise ship to ever sail Alaska's pristine waters from our newly upgraded terminal in Seattle. Bliss's many first at sea feature innovations, some of which will first debut on Norwegian Joy, are resonating extremely well with travel agents and consumers. Bookings have been extremely strong, making her now the best-booked ship in the Norwegian Cruise Line fleet at this time for 2018. In addition, at the end of the first quarter, our booking window expanded approximately 25% versus same time last year, to what I believe is now close to the optimal balance between load and pricing. And this should enable us to maximize yields with 2018 fully benefiting from the demand we are seeing across our three brands from all source markets. And finally, I would just like to say a few words about how honored I am to lead this amazing organization, that has now grown to 25 ships across three award winning brands. Throughout the years, this company has pioneered many firsts in the cruise industry, and today with seven ships on order, Norwegian Cruise Line Holdings has further solidified its growth trajectory over the next eight years in this $50 billion industry. Our tremendous growth would not be possible without the countless contributions of our 30,000-plus hard-working team members. Our incredible ship board staff and crew, our shore side employees are dedicated to providing our guests with a truly exceptional vacation experience and I sincerely thank each and every one of them for their many contributions. As we progress through our 50th year of operation, I am confident we are well positioned for another record-breaking year, and we look forward to updating you all on our continued success in August. And with that, I'll turn over the call to the operator for questions.

Thank you, Mr. Del Rio. Our first question comes from Felicia Hendrix of Barclays.

Hi. Good morning, and thank you. Frank, in the color in your prepared remarks for the second half stated that pricing for new bookings will moderately exceed prior year levels, but if we're doing our math right, your guidance for the second half seems to imply a slight reduction to net yields relative to where consensus is now. So I'm just wondering is that because some of that has to do with what was booked previously, so I'm wondering if you could just talk holistically about what you are seeing in the second half, ex-China, and then maybe how much China is offsetting that. Thanks.

Yeah. Thank you, Felicia, and good morning. The velocity and the quality of bookings that we have seen throughout the year thus far, I commented on what we've seen the last 16 weeks, has been very, very – very, very strong, across all destinations from our North American channels, from our international channels. So the outlook and the actual bookings have been very strong, especially on the pricing side. If you recall last year, pricing began to slide, and it slid throughout a good portion of the year, before recovering late. And so all those factors are contributing to a very – a very good platform to raise prices across all destinations. As you know, we are now better booked versus same time last year for the first half – not only better booked but at mid-single digits up in pricing, and for the full year, we're also up, both in load and in pricing. The second half, we believe that given the trends that we're seeing, if they continue, we will likely surpass last year's pricing levels, and that's why this statement is made. As to your point as to the implied guidance, then is flat for the second half, that has quite a bit to do with the built-in conservative nature of our overall outlook, that includes the South Korea situation and China. We believe we're taking a very appropriate, conservative approach, perhaps more conservative today than we would be under the same circumstances a quarter from now, certainly a year from now, simply because, as you know, we have yet to operate our first sailing in China, and therefore, our history is, you know, literally non-existent, and we want to be appropriately conservative with our overall guidance. So to wrap up, our 24 ships ex-China are doing fantastic. Very, very happy with their performance, and we're being cautious with what's happening in China. As I said earlier, Joy had been booking tremendously well, and even though there has been a significant slowdown since early March in new charter contracts, where we stand right now on her charter contract business compared to the rest of the Norwegian fleet, Joy is still outperforming. But, again, because of our limited history in China, we are being conservative in our overall outlook.

And I would just add as a reminder that for Q3 we're also rolling over the Getaway Rio charter from last year that garnered very high yields, as well as the Explorer inaugural launch, which again, significantly benefited us in both Q3 and Q4 last year.

Okay. So just maybe to paraphrase, if we – if it was possible to kind of lift China out of your forecasts, would you see the second half yields as growing versus being flat year-over-year?

Yeah, potentially if things continued to perform as they have been performing over the last 16 weeks or so, I would say that's a fair statement.

Okay. And then as my follow-on, I just wanted to kind of pull back the layers a little bit more on China. So, you know, there was this travel ban to South Korea, and I think we all know just from listening to a lot of things coming out from other companies, that, you know, there is a bit of – kind of a disruption, right, in general. Now your big slowdown in new charter contracts, I'm just trying to understand that a little bit more. Because I think from how we all understand it, you know, there was obviously – you know, you had travel agents kind of booking South Korea, and then they had to stop, and so that created disruption, but I think a lot of us understand that there's now been more stability. So, what has been driving this big slow down in new charter contracts per se? Like, why is this South Korea travel ban affecting that so much?

Well a couple of things. One, the disruption caused travel agents to be distracted from focusing on contracting charters further out into the year, then trying to book, in some cases re-book, find new customers who no longer wanted to go on sailings that didn't include Korea. But it's also – had a bit of a chilling effect on overall demand. You know, again, we don't have history of our first sailing is not until June 28, so still some seven weeks away, and as you know, it's a very close-in booking environment, where more than half the bookings occur, inside 30 days or so. But certainly, the events related to South Korea have had an impact on the overall business in China. And given, again, our limited history there, and being the new guys in town, so to speak, we've been very, very cautious in our outlook for China, and that's been included in our guidance. So in many ways, all the good things that I have to say about how our business is operating on the other 24 ships is being somewhat tempered by the potential that could arise in China. Not saying that it will, but I think it would be, you know, prudent of us, given our limited history there to be cautious about how the situation in China evolves. Good news yesterday that the South Korean elections bode better for, perhaps, solving this issue, than had another candidate won, so we're hopeful that the South Korea situation corrects itself sooner than later.

Okay. That's helpful. I just have a quick final one on D&A, Wendy, just housekeeping really. Your D&A came in higher in the quarter than your expectations, so I was just wondering what was driving that. And as we're thinking about D&A for next year, we're calculating roughly a 15% increase in 2018 over 2017 for D&A. Does that make sense?

Yeah, so one of the items that I would just caution everybody on is it's definitely best to model out your D&A not growing it as a percentage of sales, but instead taking into account the new ships as they come online. So when we get into 2018, there's going to be a step up in D&A because we are going to have a half year of Norwegian Joy as well as a half year of Norwegian Bliss. And on top of that, then there will be roughly $250 million in maintenance CapEx, that I would say on average I would use a seven-year life to depreciate that over. So when you adjust for the amortization of the customer relationships of approximately $26 million, in 2018, the adjusted D&A is expected to be up approximately 18%. And as a follow-on, on that, too, I would just also say that make sure that you are also keeping up with the interest expense because as you bring in these new ship additions, the interest expense also steps up in a similar way.

Okay, and why was it higher in the quarter than your previous expectations?

Yeah, I think it was just timing, Felicia.

Okay. Timing. Okay. Thank you very much.

Our next question comes from Harry Curtis with Nomura Instinet.

Good morning, everyone. Wanted to shift gears briefly to Europe. Can you give us a sense of how much capacity in the second quarter and third quarter is left to sell in Europe?

We're not going to comment on individual ships or individual regions, Harry, but I will tell you it is a lot less than this time last year. We have sold a lot more, so therefore, there is a lot less inventory. In many ways, I wish I had more inventory to sell, because we're getting very good prices on it. So we believe it's a combination of less inventory at this point in time versus last year and the very positive market conditions that we commented on, is resulting in very, very strong sales in Europe at significantly higher prices than same time last year.

I guess where I was going with this, Frank, is is there enough in this inventory left to sell in the second and third quarters to move the yield needle for the year?

You know, I think, we have given you a fair representation of what we believe the final yield growth number is. We raised yield – net yield growth a full point, and as I said earlier, all the good things that we're seeing across our markets, Europe – you know, leading the way. Again, we're being cautious against what could be the case in China.

Okay. And the other question I wanted to ask about China, is I was with one of your – the other brands last week, and their sense in China was that now that the itineraries have been reset that the customer demand has been picking back up over the past maybe three weeks or four weeks. Have you seen the same thing?

Well, again, it's a very close-in booking environment, Harry. As I said earlier our first sailing on June 28th is a full seven weeks away. Where we sit right now with the first handful of sailings, of which some bookings from the end user should be on it, are consistent with our expectations. It does, nevertheless, concern us that there was this slowdown for a six-week period of new charter contracts. As you know, it's a two-step process in China, the charter contract with the travel agents and then they in turn market it to the end user. We have seen a slight pickup in the last two weeks, perhaps consistent with the other comments you heard from our peers on the charter contract side. And so that was helpful. And again, I'll remind you that even though there was this significant slowdown, she is still better booked by a significant margin compared to the rest of the Norwegian fleet for the second half of the year. And the contracts that we have signed, and continue to sign, are still at price points that are consistent with our expectation of a 20% premium to the rest of the Norwegian fleet. Nevertheless, which has happened in China, and our limited experience there, we think it's prudent to be appropriately conservative.

Very good. Thanks. Thanks, Frank.

Thanks, Harry.

Our next question comes from Mark Savino with Morgan Stanley. Mark Savino - Morgan Stanley & Co. LLC: Hey, good morning, you talked about improving the quality of your international customers, just wondering if you could maybe elaborate a little bit on that. What are you doing differently, and what's really driving that improved customer mix?

Yeah, that's a good question. As you know last year, demand from North American consumers slowed a bit because of the geopolitical events and one had to source more business internationally. If anything, it forced us to accelerate a little bit (35:06) perhaps we otherwise would have – our marketing, our penetration, in some of these international markets. I think it's paid off, and so the combination of a strong North American consumer, that is buying more of the available inventory, combined with those in-roads that we made last year, has allowed us to raise prices in international markets, and so we did so. What was surprising to us in a very positive way was that not only were we getting higher prices, but we were also getting higher loads. It's part of the booking curve. Not only are Americans – North Americans booking further out, but international guests are also booking further out. So today we've reached a point where we're pretty much indifferent where the booking comes from, whether it's a North American base or international base, and that's a very good place to be. Mark Savino - Morgan Stanley & Co. LLC: Great. Thank you. And then just wondering if you maybe could give us a little bit more color on trends you are seeing within, you know, your premium and luxury brands. I think last quarter you had mentioned that pricing for those brands was still tracking down. So wondering if that's still the case, or if you have seen an improvement there?

Yeah, I think you heard me say before, if I had to grade the three brands last year, the Norwegian brand performed best, and the up-scale brands performed worst. Typical situation when you have geopolitical events and you rely on the North American consumer as these two brands do. The good news is that the turnaround story for us in 2017 is the performance of the up-scale brands. Their pricing has been stronger compared to last year, and so the pricing gap that existed early in the year is now narrowing where we expect both brands to outperform on a full-year basis, their pricing. And on a load-factor basis, both brands are performing very, very well, significantly outpacing the new bookings and therefore the full-year load for 2017 and I dare say also into 2018. Mark Savino - Morgan Stanley & Co. LLC: Great. Thank you very much.

Our next question comes from Steve Wieczynski with Stifel. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Hey, good morning, guys. So if I can go back to China real quick, and I think – you know, maybe a better way to ask about that market right now, is maybe, can you help us think about what's embedded in your guidance for China yields in the second half of the year? Meaning, are you basically maintaining what you've been witnessing for the last month or so? Or do you have yields decelerating from, you know, from where they were a couple months ago.

Steve, we don't provide guidance by individual markets or by individual ships, and obviously, China is a single-source market, enjoys the single-source market shift, so we're not going to go into a whole lot of detail. But look we have taken into account what we're seeing in China. My guess is perhaps we are being more conservative than our peers would have been, or perhaps more conservative than we ourselves will be, once we have some history under our belts. But this is a start-up market for us to begin with. We don't have any history there. It's a very different market. It's a very opaque market. We've heard throughout different industries that China is an opaque marketplace, and it's opaque in the cruise industry compared to what we're used to in the Western world. And so those situations concern us, and I think, we've reacted appropriately – appropriately conservative to reflect that in our full-year guidance, which as you know, is all in the back half of China. So, again, feel very, very good about the other 24 ships, across all markets, all brands, all source channels. China is a concern, primarily because of our lack of history. So we'll see if it continues to improve. As I said, there has been a little bit of a thaw, if you will, in the case of new charter contracts. We're now just entering for the first sailing, perhaps the first two or three sailings in early July the sweet spot of the booking curve. And so, again, we'll have much more experience under our belts once we talk to you again in August. We'll have a full six weeks of China history under our belts when we talk to you again next August. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Thanks for that color, Frank. And then second question would be just around the Alibaba agreement. I know you touched on it a little bit at the beginning of your prepared remarks, but could you give us a little bit more color on how this agreement came together. And then I guess the question is, do you think this relationship could possibly jeopardize some of your relationships with your distributors in that market as you try to go through and grow your brand?

No, not at all. I think that the relationship that we're going to have with Alibaba will improve the exposure of Norwegian Cruise Line as a brand. We'll expose cruising as a vacation alternative to China. I mean, Alibaba is huge in China. Unless you know it well, there is nothing in the U.S. that compares to it. Couple little statistics. I'm told that Amazon controls 14% of the United States e-commerce. Alibaba controls 83% of China's e-commerce. So any time you can forge a partnership with someone with an entity that has that kind of reach, that has the kind of database as to the needs, wants, psyche of Chinese consumers, I think, it's a very positive thing. Our travel agents already sell cruises on Alibaba, and we think that our partnership with Alibaba will enhance their ability to sell more inventory, our inventory, to not just any guests, but very targeted guests who are likely to pay more to go on a cruise, and that's where their incredible database and knowledge of the consumer in China comes into play. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Thanks, Frank. Thanks for the color. Appreciate it.

Yeah.

Our next question comes from Robin Farley with UBS.

Great, thanks. I wanted to clarify just one or two things when you were talking about your booked position. In your opening comments, you mentioned that you were significantly booked versus the prior year, including and excluding Joy, and then you said pricing up mid-single digits, was that including or excluding Joy? And if it's one of them, I guess I would ask what is the other, just to get a sense of the scene in the way you performed.

Yeah, the number wouldn't change a whole lot including or excluding Joy, because Joy is coming in pretty much at the corporate average.

Okay. And then I guess I'm trying to parse what it means for your implied guidance for the second half, and I think, you – it sounded like you were saying that if things continue the way they have the last 16 weeks that the second half maybe could be better than flat. So I guess it sounds like – I guess, it's Q2 where a lot of the pricing is up year-over-year, and maybe in the second half kind of what's on the book today isn't? Just trying to understand that. And also it seems like Q4 you are comping against – you had negative yields last year, and I think it was the Caribbean that was a lot of that. So I mean, is it fair to say that at least what's on the books for Q4 today is higher year-over-year? So is it really just a Q3 issue at this point?

Yeah, that was a mouthful, Robin. I'll try to remember.

Try to triangulate, yeah.

And I'll try to go in sequential order by quarter. Quarter 2 is substantially sold. There's very, very little inventory left to sell in quarter 2. So we feel very, very good about our guidance that we provided you, where year-over-year net yield growth is a healthy 5.5%, and that's being driven by primarily three things, Explorer. We didn't have Explorer last year, we only had Sirena for half the quarter, and Cuba. We will operate 11 sailings in Cuba in Q2, and as I said earlier, the performance of that itinerary is just astonishing. Q3, as we all know Q3 is the big Europe quarter, and you have to understand the booking curve. A quarter doesn't fill the quarter before or two quarters before. It starts 15 months, 18 months before. So we are lapping – have begun to lap – we have not fully lapped the effects of last year's decrease in pricing. There is a modest amount of inventory left to sell in Q3 and into Europe as well. A lot less than there was to sell this time last year. So from this time forward last year, because there was more inventory to sell last year, and prices were dropping, we're going to start – and we have already started to close the gap between where pricing was at this time last year for Q3 and where it ended. So we believe that when it's all said and done, Q3 pricing has a good chance of moderately exceeding last year's performance, and I'll say the same in general for Q4.

If Q4 is more of a Caribbean quarter than a Europe quarter, though, would your – because it wouldn't have been the same sort of security lapping issues. Your pricing today for Q4 is higher year-over-year, is that fair to say?

Yeah, last year we had Explorer and Sirena in Q4, a very, very high yielding product that we're now lapping. So that's no longer a catalyst for yield growth. But I think, the takeaway is that business is very, very strong, both in load and in the pricing of business that we're adding to our booked position throughout the quarter – future quarters, certainly for the rest of 2017, and into 2018.

And then just another question on expenses if possible. (47:17) The full year expense has gone up, it looks like by more than just the extra expense in Q1. So I don't know if you – I know you talked about some of the factors driving Q1 expense higher. Do you have a little color on the full year?

Sure. So there is some additional costs that we have added in for the full year. It's primarily related to additional marketing that we're putting into China, based on the South Korea travel restrictions. Also we're deploying additional marketing for all of our Cuba sailings to really try to seal and maintain those extremely high premiums that Frank mentioned. That's the majority of it, and then I already had mentioned some of the costs that we incurred in Q1 related to the Norwegian Star.

Yeah, in terms of Cuba, it is also important to note that we now have 41 sailings in 2017, represents about 1.8% of our full-year capacity. For 2018, we now have 56 sailings for 2018 that we want to market. It's always best to load early and get the highest prices possible, and those 56 sailings will make up 2.1% of our full-year capacity. So while, you know, roughly 2% of capacity is not, you know, significant, given the pricing premiums that could be had, based on what we have seen, that – of actuals in – for the quarter 2 sailings that we actually have either sailed or have substantially sold out at this point, it's important that we do all our best to promote that destination – it is a new destination – to garner the highest prices possible. I think, it will pay dividends down the road.

And then just as a housekeeping issue, following up on your prior question, Robin, I just wanted to mention too that for the back half of the year, when you look at the break-out between Q3 and Q4, Q3 definitely will be the lowest quarter.

Okay. Great. Thank you very much.

Our next question comes from Tim Conder with Wells Fargo.

Thank you. We'll just stay on China and Korea here if you don't mind, and we appreciate all the color so far. And Frank fully appreciate the -- again, as you said several times, you don't have a history there yet. So just to confirm what you said – given what you have seen in the last couple of weeks. One, do you believe we've passed the inflection point of some of the competitors, as implied with the South Korea, China issue? And then those last two weeks, is that already factored into your guidance here at this point? Or is two weeks does not a trend make?

Yeah, two weeks does not a trend make. I'd like to see it continue, Tim, quite frankly, and I'd like to see the pace of new groups, new charters, new half charter contracts accelerate a bit. But at least it broke the ice. For a good six weeks there was nothing, and now there is something, and that gives us hope that there will be more. As to the commentary of the others, again the others were involved in trying to fill sailings that were departing in late March, April and May, that would have had the brunt of the South Korean restrictions. Ours luckily doesn't start until late June, June 28. As I said earlier, the sweet spot of the booking curve has not yet really begun for that sailing, much less the ones in July and August. So it's too early for us to tell, and again, because of our lack of history there, we are being cautious – we're cautiously optimistic. But nevertheless, we think it would be prudent to have that level of conservatism, and that level of conservatism is reflected in our full-year guidance.

Okay, okay. And from a math perspective, I guess, some of the concerns here today have just been the flow-through, and I think you guys have fleshed that through fairly well here. But the point higher in yield we're roughly seeing only 25% of that flow through, and again, we can contribute all that – basically attribute it to the South Korea marketing, pricing assistance, however you want to frame that, and then the additional Cuba. Anyway to parse between those two buckets that differential?

I think it simply reflects our caution. We're cautiously optimistic. If things in the rest of the world, or the environment continues to be as robust as it is today, I think that bodes well for the second half. And the key for us will be China. We have a greater degree of confidence in the other markets – the markets where the other 24 ships operate, because we know those markets. We don't know China. And although Norwegian Joy only represents 8% of our capacity, we think it's prudent to be cautious.

Okay. And then one last one on Europe, clearly, that was problematic as we all well know, and that's turning, thankfully here, with the North Americans coming. If we look at history here, just remind us where historically how much of your European itineraries were sourced from North America, what it was last year, and now as it is recovering? Plus you add the Getaway, which is obviously a larger ship, how that is looking at 2017 and any color for 2018? How you anticipate the mix of North Americans throughout those periods looking for European itineraries?

Yeah, as I said earlier, we're very pleased that we've now achieved pricing parity between North Americans and the rest of the world. So now it's – and I think that parity and the strength in the overall markets is leading our ability to stretch that booking curve into throughout 2017 and throughout 2018. It gets a better quality customer on board, which helps on on-board revenue and we're seeing strong on-board revenue, we saw it in Q1. So in terms of the math on that, we have seen roughly a 13% decrease in the number of Europeans that have booked European sailings for 2017 versus 2016. And that decrease has been made up, not only by North Americans, but by other international-sourced markets that are doing very well for us, especially Australia, Brazil, and non-China Asia have really stepped up. So we now have a more diversified portfolio, if you will, of channels by which we can tap to maximize our revenue, and we're seeing it. We're seeing it, like I said, across all three brands, across all the destinations that we cruise to, and from a variety of sources.

Okay. Great. Thanks. Very helpful. Thank you, Frank.

Elizabeth, we have time for one more question.

Our last question comes from Jared Shojaian with Wolfe Research.

Hi, good morning, everybody.

How are you?

Good, thanks. Maybe I can ask this a little bit differently. Can you tell us the percentage of the second half that's booked right now, and at what prices?

I will tell you that our load factor is up mid single-digits, and our pricing overall is flat, but gaining ground every week as we begin to lap the decrease in prices last year. Now that's the book position. The velocity of bookings, the quality of bookings over the last 16-week period, pricing is up solid double-digits, where the overall load factor is down single-digits, primarily because we have less inventory to sell. You can't continue to have this huge gap in loads. At some point the curve of time and inventory merges, and that's what we're seeing. But as you have less inventory to sell, you raise prices, and the demand of that inventory pushes further out and that's why 2018, even though, very early, is shaping up so well.

Okay. And, just to understand this a little bit better. Are you saying that second half, 3Q and 4Q, the booked position, the pricing is flat, or are you saying 2Q through the end of 4Q?

I think you asked me about second half.

Right.

I answered second half.

Okay. So I guess I'm just trying to understand this is a little bit better. If second-half pricing is flat right now, but the new bookings you are getting up double-digits, that would imply second half pricing and yields are going to be up, but that gap is just the conservatism for the Joy and China? Is that a fair way to think about it?

Yes, but remember that there is a lot less inventory to sell, and so, if I had a lot of inventory to sell at high prices then I think I know where you are going with the implication. But just keep in mind, that we have considerably less inventory to sell than we did this time last year, and therefore the potential impact on full-year net yield growth is somewhat limited. And it is also somewhat being limited by our own guidance, because of the uncertainty in China.

Got it. Okay. And if I could just ask one last one. Are you committed to keeping Joy in China year-round or will you consider redeploying to the southern hemisphere during the winter season, maybe in Australia or another market? We have seen that from some of your competitors, so just curious how you're thinking about that.

Right now we're committed to keeping Joy in China. I'm glad to see that the others are leaving. That leaves us perhaps the last man standing, and that'd be great. I'll take all the demand. But, look, ships have propellers and rudders for a reason, and our goal is to always deploy them in areas that we think can maximize profitability. Today we think that place is China. The South Korea situation, we believe, is a temporary bump in the road, and time will tell.

Okay.

Thanks very much, everyone, for your time and support this morning. And as always we'll be available to answer your questions later on today. Thanks again. Bye-bye.

This concludes today's conference call. You may now disconnect.