NCLH: Tickets and Onboard Drive Q2; Food Spend Down

Increased ticket and onboard revenue drove Norwegian Cruise Line Holdings (NCLH) record second quarter (Q2) earnings.

Despite carrying fewer passengers than last year, 569,857 down from 574,838, NCLH posted more passenger cruise days, 4,517,788 up from 4,237,020, and higher gross and net ticket and onboard revenue per passenger day.

The passenger number was down due to longer cruises, according to NCLH.

Operating costs were also up, except food costs that were down for Q2 and for first six months of the year, despite an increase in passenger cruise days.

The reduction in food costs were primarily due to a series of purchasing initiatives undertaken over the past year. In a prepared statement to Cruise Industry News, NCLH said: “We have been successful in finding significant efficiencies across our food distribution through a concerted effort to improve processes in delivering consumables to our vessels around the world. In addition, we have leveraged our buying power to deliver substantial hard savings across our food purchasing without compromising quality.

“For example, on a number of key proteins that represent the highest cost items across our food costs, we have been able to cut costs significantly simply by purchasing directly from the suppliers and cutting out middlemen. These initiatives have resulted in savings while providing the same, or in many cases, better quality protein.

“During this period we have also been refining the dining experience across our fleet, and with the benefit of guest research and feedback, we have refined our menus to better meet the preferences of our guests and, as a result, we have seen our guest experience scores improve year over year.”

NCLH spent $47.3 million on food in the second quarter of this year and $95.5 million for the six-month period, compared to $49.8 million and $100.8 million, respectively, last year.

Gross revenue per passenger day was $297.52 this year, up from $280.11 last year. Net revenue per passenger day was $229.63 this year, up from $216.55.


Norwegian Joy Welcomed to New Shanghai Home Port

Norwegian Joy Welcomed to New Shanghai Home Port
PHOTO: Norwegian Cruise Line’s new Norwegian Joy docked in Bremerhaven, Germany. (photo by Jason Leppert)

Following maiden calls in Singapore, Qingdao, Shenzhen and Hong Kong, Norwegian Cruise Line’s newest ship, the Norwegian Joy, was welcomed to its new home port of Shanghai, China.

The Norwegian Joy was engineered in Germany and designed specifically for the Chinese market.

During a preview voyage that departed from Shanghai June 10, the new ship welcomed more than 1,700 VIP members and guests of the Alibaba Group for a four-day preview cruise.

Norwegian Cruise Line’s preview voyage aboard the Norwegian Joy called on the Japanese port of Kochi before returning to Shanghai, and the ship’s christening ceremony will take place on June 27 with its Godfather, ‘King of Chinese Pop,’ Wang Leehom.

Year-round voyages on Norwegian Joy from Shanghai begin June 28, with sailings from Tianjin from August 26 to September 15. The vessel was designed with several major attractions, including the first race track at sea, virtual reality experiences, plus 28 local and international dining options.

“Norwegian Cruise Line is extremely proud to welcome the newest addition to our fleet, Norwegian Joy, to her home port of Shanghai, China,” NCLH China president David Herrera said in a statement.

“Norwegian Joy’s arrival demonstrates our commitment to the Chinese cruise market.  She was custom-built with Chinese cruise guests in mind.”

The Norwegian Joy will cater to the modern Chinese family, with amenities that include staterooms designed for multi-generational families, Las Vegas-style performances and a variety of luxury shopping options.

The new features, services and amenities found on the Norwegian Joy will help Norwegian Cruise Line make a massive impact in the Chinese market.

NCL, Oceania and Regent get permission to sail Cuba cruises

The Norwegian Sky will sail Cuba voyages from Miami.

After waiting for six months, Norwegian Cruise Line Holdings (NCLH) finally got the call it had been seeking from the Cuban government allowing it to start cruises to Cuba from Miami, beginning in March.

The authority is temporary and will expire in May. But it covers three brands (Norwegian Cruise Line, Regent Seven Seas Cruises and Oceania), the first time a cruise company has won approval to marshal multiple brands in a strategic foray into the Cuban market.

“We are tremendously excited to have all three of our award-winning brands receive approval from authorities in Cuba to offer cruises to Cuba from the United States,” said Norwegian Cruise Line Holdings CEO Frank Del Rio, who was born in Cuba.

“This is truly a dream come true for me, and I cannot wait for our loyal guests to experience the sights and sounds of my hometown of Havana and get to know its rich culture and its warm and welcoming residents,” he said.

Cruises will sail on the 1,928-passenger Norwegian Sky, the 1,250-passenger Marina and the 700-passenger Seven Seas Mariner.

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Seven Sea’s Mariner,

The first Oceania cruise to Cuba will depart Miami on March 7, leaving less than three months to prepare the ship, the itinerary, the crew and to sell the cruises. The Marina voyages will include “many multiple-day calls to allow guests to explore Havana and its environs,” the company said.

The Norwegian Sky will sail a series of four-night voyages over nighting in Havana in May, while Seven Seas Mariner will call on Havana during two cruises in April.

Pricing was not released. On Carnival Corp.’s Fathom, the only other cruise line to gain approval to sail between Miami and Cuba, fares start at about $1,900 for a seven-day cruise.

Fathom’s ship, the Adonia, is older and much less luxurious than the Marina, which was built in 2011. The Adonia is about the same age as the Norwegian Sky.

It isn’t clear why Cuba is giving NCLH such a small window in which to operate. However, Fathom’s authority to sail to Cuba will also expire in May.

The opening for NCLH comes at a crossroads in relations between the U.S. and Cuba with both countries going through a transition in top leadership. Some analysts had expected a pause in new business approvals, while others saw an acceleration to take advantage of the Obama administration’s open stance towards Cuba.

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Fathom Cruise entering Havana

Cruise tourism to Cuba remains bound by the “people-to-people” framework in place since 1982. That requires shore excursions to be structured to promote exchange activities, such as cultural and humanitarian visits. Norwegian said its cruises would comply with Treasury Department rules.

To sail the new itinerary, Norwegian and Oceania will have to re-accommodate guests already booked. The March 7 Marina departure is currently listed as a 14-day cruise to ports in the western Caribbean, Central America and Colombia. The ship was scheduled to leave for Europe on April 10.

The Norwegian Sky does three- and four-day cruises from Miami that typically attract late bookings.

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Regent Seven Seas Explorer

NCLH’s application to sail to Cuba has been pending for at least a year. At a July news briefing onboard the new Regent Seven Seas Explorer, also an NCLH-owned ship, Del Rio said he was “literally waiting on a phone call for the final, final approval” from Cuba.

But after the Adonia’s authority was granted in March, no other cruise ship approvals followed until now.

Royal Caribbean Cruises Ltd. is among the cruise companies with applications pending. It plans to use Royal Caribbean International’s Empress of the Seas to ply the Florida-Cuba route.

MSC Cruises sails to Cuba but does not market the cruises to U.S. residents. Celestyal Cruises offers seasonal Cuba cruises that Americans can take by flying to either Havana or Montego Bay, Jamaica, and enrolling in a people-to-people group program for shore excursions.