Norwegian Strategic on Alaska

Norwegian Bliss

Norwegian Cruise Line Holdings (NCLH) President and CEO Frank Del Rio underscored his enthusiasm for Alaska on the company’s third-quarter earnings call.

He said the company will continue to make investments and cultivate partnerships in the region, noting the new pier NCLH has agreed to build in Ketchikan, its $20 million purchase of 2.9 acres of waterfront property in Juneau, and the construction of a second pier at Icy Point Strait.

“We are investing in port facilities and guest experiences,” he said. “Alaska is destination-centric and you much have the land capabilities in place. We have almost doubled our capacity in Alaska over the past three years and will be even stronger as we finalize our investments.”

NCLH’s Q3 Alaska capacity was up 17 per cent over the same period last year.

In Ketchikan, NCLH has entered into a 30-year preferential berthing agreement with Ward Cove Dock Group, which allows for the construction of a new double ship pier in Ward Cove.

Meanwhile, current zoning laws are said to prevent a pier from being built on the property in Juneau.

The pier will be built to simultaneously accommodate two of Norwegian Cruise Line’s 4,200-passenger Breakaway-Plus class ships and is expected to be ready for the summer 2020 season.

NCLH partnered with the Port of Seattle in 2015 on the renovation and expansion of the Bell Street Terminal at Pier 66 which was ready for the 2018 season and the 4,000-berth Norwegian Bliss.

NCLH and the port entered into a 15-year lease agreement providing its ships priority berth space in Seattle for the full term of the lease in return for passenger volume guarantees. NCLH manages the cruise operations at Pier 66, while the port operates the facilities outside the cruise season.

Next year, the Norwegian brand will have three ships in Alaska, with the Norwegian Bliss, Joy and Sun will be from Seattle. In 2021, the new Encore will take over for the Joy. Oceania and Regent will each have one ship in the Alaska market, with the Regatta and the Seven Seas Mariner from Seattle, Vancouver and Seward.

Del Rio cited what he called “incredibly strong ticket pricing and onboard spend” in the Alaska market and also noted the lengthening of the season, which now runs all the way from April to October.

“In the coming years, we will further bolster our presence and commitment to the region,” Del Rio noted.

Two cruise lines regroup after Caribbean setbacks

The Norwegian Sky in Havana in a 2017 photo.

Norwegian Sky outside Havana Port, Cuba.

Two cruise companies affected by sudden upsets in the Caribbean and Bahamas region are slowly regaining their footing.

For Norwegian Cruise Line Holdings (NCLH), the big blow was the abrupt end to U.S. cruises to Cuba in June. NCLH had bet heavily on Cuba’s reopening, scheduling not only short cruises on its contemporary Norwegian Cruise Line brand but longer visits by its two premium brands, Oceania Cruises and Regent Seven Seas Cruises.

As detailed in a conference call with investors, the U.S. government decision to shutter Cuba with no advance warning hit NCLH third-quarter earnings big-time.

“Given the suddenness of the termination and the lack of lead time we had to make any meaningful fleet redeployment changes, the third quarter bears the largest negative earnings impact from the Cuba travel ban,” said Frank Del Rio, the company’s CEO.

The hit was more than $47 million.

Overnight, high yielding routes to Cuba for the Norwegian brand turned into low-yielding routes to the Bahamas. And several months later came Hurricane Dorian, which made its own dent in NCLH’s earnings through cancelled sailings and reworked itineraries.

Del Rio said Norwegian plans to redeploy half of its Bahamas capacity to higher-yielding areas such as Alaska, the eastern Mediterranean and Asia, and will slowly get out from under the Cuba aftermath.

Even more impacted by Dorian than Norwegian was Bahamas Paradise Cruise Line, whose only destination is the Bahamas.

It suspended its two-day sailings to Grand Bahama for most of September, filling in the time by providing much-need relief and evacuation services.

The silver lining, of sorts, is that Dorian forced Bahamas Paradise into a new market, Nassau, which was not much affected by the storm. It now runs one of its ships from West Palm Beach to Grand Bahama and the other to Nassau.

Bookings for Nassau started slow, said Francis Riley, senior vice president of sales and marketing, but are now on par with those to Grand Bahama. Part of the attraction is the Cruise & Stay program where guest can vacation for two or four nights at one of four Nassau hotels:  Atlantis, The Melia, the Comfort Suites Nassau or the SLS Baha Mar.

Bahamas Paradise has a similar program in place on Grand Bahama with the Lucayan, which has reopened, and the Viva Wyndham, which plans to reopen Dec. 10.

Unlike Norwegian, Bahamas Paradise doesn’t have plans to go elsewhere, and it is busy selling the Bahamas to Canadians and New Yorkers, who have just started getting the frosty temperatures they can look forward to until next spring.

Harry Sommer Named Norwegian Cruise Line CEO; Stuart To Step Down

Frank Del Rio (left) and Harry Sommer (right)

Norwegian Cruise Line Holdings (NCLH) today announced organizational changes at the Norwegian Cruise Line brand as Harry Sommer has been named the successor to Andy Stuart, president and CEO.

Stuart is set to step down following the launch of Norwegian Encore. Sommer is currently president of international for NCLH. 

Stuart will step down from his role on December 31, 2019, and remain with the Company as Senior Advisor through March 31, 2020, to ensure a smooth transition, according to a press release.

Stuart joined Norwegian in 1988 and held several key executive positions during his tenure of more than three decades, including President and Chief Operating Officer; Executive Vice President, Global Sales and Passenger Services; Executive Vice President and Chief Product Officer and Executive Vice President of Marketing, Sales and Passenger Services. 

“I could only have dreamed about my journey at Norwegian when I joined the company in 1988 and am extremely fortunate to have witnessed firsthand the incredible evolution of this pioneering brand,” said Andy Stuart, President and Chief Executive Officer of Norwegian Cruise Line. “I am honoured to have played a role in the leadership position Norwegian now holds in this incredible industry and continue to be proud of the commitment, dedication and passion of our team for delivering a best-in-class vacation experience. I have worked closely with Harry and am confident he is the right person to take the helm and continue the journey for Norwegian Cruise Line.” 

“Andy has accomplished everything possible in the cruise industry, including leading its most storied and innovative brand. He will leave on a high note after delivering the brand’s latest ship, Norwegian Encore, the last ship in the most successful ship class in the Company’s history,” said Frank Del Rio, President and Chief Executive Officer of Norwegian Cruise Line Holdings Ltd. “We are extremely grateful for his leadership and contributions to Norwegian Cruise Line, our company and the cruise industry.”

Del Rio continued, “Over the last several years, Norwegian’s management and Board of Directors have worked closely on a comprehensive succession plan that leveraged the considerable bench strength across the organization. The Board and I are confident that Harry is the right person to succeed Andy as President and Chief Executive Officer of the Norwegian Cruise Line brand and look forward to him leveraging his breadth of knowledge and extensive experience in the industry and our Company to take the brand to new heights.”

“Andy and I have worked closely together over the last several years and I am humbled and honoured to follow in his footsteps and lead this renowned brand,” said Harry Sommer, President, International for Norwegian Cruise Line Holdings Ltd. “I look forward to working with all of our incredible partners worldwide, building off the strong position the brand holds today and charting the strategy for the next phase of Norwegian’s journey.”

Sommer currently serves as President, International for Norwegian Cruise Line Holdings Ltd. where he is responsible for all sales, marketing, public relations and office operations for Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises in all markets outside of the United States and Canada. He previously served as Executive Vice President, International Business Development and Executive Vice President and Chief Integration Officer for Norwegian Cruise Line Holdings and held various executive positions for Prestige Cruise Holdings including Chief Marketing Officer; Senior Vice President, Finance and Chief Information Officer and Chief Accounting Officer. Sommer holds an MBA from Pace University and a BBA from Baruch College.