Go-to-Market Bundling Paying Off for Norwegian

Free air promotions for Norwegian Cruise Line sailings in 2019 are part of the company’s extension of its go-to-market bundling strategy, according to Frank del Rio, president and CEO of Norwegian Cruise Line Holdings.

Del Rio said it was an extension of the brand’s Free at Sea offering, which allows guests to bundle in various offerings, from internet access to food and beverage and shore excursion packages.

“The advantages of this next evolution of our unique bundling strategy are many. First, it overcomes a major hurdle of what high yielding long-haul customers need and want, easy to book in affordable air transportation,” Del Rio said, on the company’s third-quarter earnings call. “The success of Free at Sea has demonstrated that there is overwhelming demand for an inclusive contemporary cruise product. Free Air is the natural extension of that strategy.”

He said that travel agents are further incentivized to sell Norwegian products, earning an additional commission on air-inclusive packages.

“The offerings strategically focus on capturing more long haul, fly-cruise guests, reinforcing our strategy of sourcing the highest quality guests as long-haul guests tend to be higher paying consumers both in ticket purchase and in onboard,” Del Rio added.

Andy Stuart, president and CEO of Norwegian Cruise Line, explained that the free air promotion for Norwegian Joy’s 2019 Alaska sailings drove bookings, and moved pricing up.

“Because what you get is you get some people who booked inclusive product and some people who buy cruise only,” Stuart said. “And the result of that mix is that you end up with a higher overall pricing outcome. So we're very happy with it. We are in the early days of the initiative. It’s a 100per cent strategic initiative. Our goal here is to evolve the bundling strategy that has been so successful for us.”