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Showing posts with label Regent Seven Seas Cruises. Show all posts
Showing posts with label Regent Seven Seas Cruises. Show all posts
According to Regent, the result is the best performance of a top-tier product the cruise line has ever experienced on an opening day.
“I’m absolutely thrilled, but not surprised, by the phenomenal results that the Seven Seas Prestige has produced – we knew that luxury travellers were extremely eager to reserve their suite on this incredible ship,” said Jason Montague, chief luxury officer for Regent Seven Seas Cruises.
“The Seven Seas Prestige promises to begin a new legacy for the entire ultra-luxury cruise sector, and we cannot wait until she joins the fleet in December 2026. I’d like to thank our valued guests and Travel Partners, as well as Regent’s highly talented and professional teams around the world, who all contributed to this fantastic achievement,” he added.
Set to be delivered in late 2026, the Seven Seas Prestige will be the first in a new class of ships developed by the company.
The 77,000-ton vessel will be 40 per cent larger than Regent’s previous ships, yet it will accommodate just ten per cent more guests, the company said.
Built at the Fincantieri shipyard in Italy, the ship will host 822 guests in all-balcony suites, as well as 630 crew members.
Frank Del Rio To Retire from Norwegian Cruise Line Holdings, Sommer Named Next CEO
Norwegian Cruise Line Holdings today announced that Frank J. Del Rio has decided to retire and step down from his position as the company’s President and Chief Executive Officer, and from its Board of Directors, effective June 30, 2023, according to a press release.
Del Rio will serve in a consultant capacity as a Senior Advisor to the Board through 2025. Harry J. Sommer, who has served as President and Chief Executive Officer of NCL since 2020, has been appointed to succeed Del Rio and will also join the company’s Board of Directors, effective July 1, 2023.
David J. Herrera, who has served as Chief Consumer Sales and Marketing Officer of NCL since 2021, will succeed Sommer as President of NCL, effective April 1, 2023.
According to a company statement, Del Rio’s well-deserved retirement is the culmination of a remarkable career spanning three decades in the cruise industry.
Del Rio has led the company since 2015 and prior to that led Prestige Cruise International, Inc., or its predecessor, which operated and Regent Seven Seas Cruises, from 2002 until its acquisition by Norwegian. Del Rio founded Oceania Cruises in 2002, creating a new “upper premium” market space in the cruise industry. During his tenure, Del Rio successfully led the company in welcoming eight new and innovative ships since 2015, introducing the company’s second private island destination, Harvest Caye, and achieving industry-leading yields and financial results. Del Rio also led the company through the COVID-19 pandemic, the most tumultuous time in its 56-year history, and was a vocal leader and advocate for the entire cruise industry through unprecedented times as it worked to resume cruise operations globally.
Sommer, 55, has more than 30 years of cruise industry experience across sales, marketing, revenue management, passenger services, itinerary development and international business development and operations. In addition to his role as President and Chief Executive Officer, NCL, Sommer expanded his responsibilities in recent months to include oversight for all of the company’s other revenue-generating functional areas, including Oceania Cruises, Regent Seven Seas Cruises and the tri-branded Onboard Revenue department. Previously, he served as President, International and throughout his career also held executive roles at various cruise operators.
“On behalf of the Board and the entire organization, I thank Frank for his invaluable contributions to this company and the cruise industry throughout the last 30 years,” said Russell W. Galbut, chairman of the Board of Directors of Norwegian Cruise Line Holdings. “He has delivered superior financial results, expanded our fleet with luxurious and innovative ships, strengthened our global footprint and delivered unparalleled experiences for our guests. His passion and dedication will have a lasting impact on both our business and the industry at large.”
Galbut continued: “The Board is thrilled to appoint Harry to succeed Frank as the company’s next CEO, – the culmination of a thoughtful succession planning process. A highly experienced leader and operator, Harry has worked alongside Frank for many years and helped drive the success of our largest, award-winning brand during a critical time. He successfully relaunched the NCL fleet following a more than 500-day pause, delivered the game-changing Norwegian Prima, the first of six ships in the brand’s new class, and led the team to a record-breaking booking year in 2022. Harry is undoubtedly the right leader to lead our company forward into the next chapter of growth.”
“Leading Norwegian Cruise Line Holdings has been one of the most rewarding experiences of my professional career,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings. “My heartfelt gratitude goes out to our 39,000 team members around the globe whose innovation, tenacity and collaboration have strengthened this company and built the industry’s most passionate and loyal base of cruisers. With the company solidly positioned for 2023 and beyond, I am confident that now is the right time to pass the baton to Harry. Having worked closely with Harry for decades, I know firsthand that his talent and skills are ideally suited to take this company into its next era. I look forward to continuing to work closely with Harry, the Board and our management team during the coming months to ensure a seamless transition. I am delighted to continue to serve as a Senior Advisor to the Board after the transition.”
“I am incredibly humbled to succeed Frank as this iconic company’s next President and CEO, and I’m grateful to have the unwavering support of him and the Board to lead the company as we embark on the next chapter for our storied brands,” Sommer said. “I am proud to have been a part of the company’s successes during the last 15 years, and I look forward to the bright future ahead, including the transformational growth we have in the pipeline. I am honoured and excited to lead and work alongside what is unquestionably the best team in the industry to deliver on our business and financial goals.”
Sommer added: “I’m particularly happy that David will be leading Norwegian Cruise Line as he has been a key contributor to NCL’s success in recent years. With his strong financial, sales, marketing and business development background, David will be further empowered to guide the NCL brand on an accelerated path forward. I am confident that he is the right person, at the right time, to lead this amazing brand into a bright future ahead.”
“I look forward to continuing to work alongside Harry and our leadership team to build on our strong momentum and continue to provide NCL guests with industry-leading experiences,” Herrera said. “I am honoured and grateful for this incredible opportunity to lead this premier cruise line and our world-class team.”
Norwegian Cruise Line Holdings (NCLH) has entered 2023 with a record-booked position at a higher price, with each of its three brands experiencing "record-breaking" wave periods.
The Norwegian Cruise Line (NCL), Oceania Cruise and Regent Seven Seas Cruises parent has seen "very strong" demand so far in 2023, according to a recent trading update covering the fourth quarter and full year to 31 December 2022.
The company entered the year with a cumulative booked position of approximately 62% for 2023, in line with previously outlined expectations and within the firm’s optimal 60% to 65% range, and at higher prices than 2019 at a similar point in time.
Booking volumes have accelerated in recent months buoyed by strong wave season demand, NCLH said, with its brands achieving several booking records in recent months.
As a result, the full-year 2023 cumulative booked position is ahead of 2019 levels inclusive of the company’s 19% increase in capacity.
NCLH expects this positive momentum to continue throughout the year, with occupancy expected to average 100% for the first quarter and is on track to reach "historical levels" for the second quarter.
As of 31 December 2022, the company’s advance ticket sales balance, including the long-term portion, was $2.7 billion, approximately 9% higher than the prior quarter and approximately 30% greater than at year-end 2019.
Frank Del Rio Forecasting Record 2023 for Norwegian Cruise Line Holdings
Norwegian Cruise Line Holdings (NCLH) will generate record EBITDA and net yield in 2023, according to a very upbeat and confident Frank Del Rio, CEO and president, who spoke at a two-hour presentation aboard the Norwegian Prima in New York City on Thursday morning.
Del Rio said that bookings for 2023 were up from 2019, including a 16 per cent capacity increase, and at significantly higher prices.
Talking about the so-called key value drivers, Del Rio asked analysts not to lump NCLH in the same pool as the other cruise companies, and that the company differentiates itself in many ways, including targeting a more upmarket demographic, featuring ships for its three brands that are at the top of each market segment, and premium itineraries.
Other companies, he said, have so many brands they are sabotaging each other. In contrast, Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises (the NCLH brands) are clearly differentiated, each in a different market segment. Del Rio described the brands as stand-alone that do not compete against each other.
Del Rio went on to say that itineraries are the number one driver of pricing and that he spends more time on itinerary planning than anything else. Another key driver is the cabin mix and he noted that the brands have a richer mix of cabins, with a higher percentage of outside balcony cabins.
He said that NCLH’s go-to-market strategy is focused on filling the ships, offering consumers value and deals they are happy with, while not discounting, and noted that they are beating their competitors by a large margin.
Pricing is almost irrelevant, according to Del Rio, who said the key is to have consumers feel they get a deal. And when products are bundled in that consumers buy dining and beverage packages up front, as well shore excursions, they come onboard with a so-called “fresh wallet” and spend more.
He noted that onboard spending on the Norwegian Prima on its trans-Atlantic crossing had been double of the company’s average.
By comparison, in 2018, 52 per cent of the passengers bought packages in advance of their cruise. For 2022, Del Rio said that number has increased to 85 per cent. He added that also means that more cruises are “sticking,” meaning there are fewer cancellations and higher advance deposits.
The average booking curve is now more than eight months out, he noted. From 171 days in 2016, the booking curve is now 245 days. The extended booking window also gives the company more visibility and the ability to manage pricing to maximize ticket and onboard yield.
Another key factor contributing to a strong 2023 is that NCLH is a U.S.-centric company, according to Del Rio, who said that 78 per cent of the passengers come from the U.S.
Among the trends noted were more direct bookings with the travel agency community constricting during the pandemic and with consumer behaviour changing to more online purchasing.
Looking forward, Del Rio and Mark Kempa, CFO and executive vice president, said the brands will continue to benefit from the underserved and unserved markets while continuing to be U.S.-centric.
They also said that NCLH has a lot of “headroom” to raise prices while comparing cruise to land vacations.
Among the key takeaways from the presentation, Del Rio underscored that not all cruise companies are created equal and that NCLH has laid the foundation for a strong 2023, surpassing 2019, targeting a higher-end demographic, which is reflected in its stronger pricing and bookings.
Norwegian Cruise Line Holdings Drops Pre-Cruise COVID-19 Testing
Norwegian Bliss in Ponta Delgada Azores, photo credit Spacejunkie2
Norwegian Cruise Line Holdings today announced it will no longer require guests to complete pre-cruise COVID-19 testing unless required by local regulations, according to a press release.
This policy will go into effect across Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises beginning August 1, 2022, the company said.
The pre-embarkation testing requirement will remain in place for guests currently travelling on voyages departing from destinations with local testing regulations, including but not limited to the U.S., Canada, Greece and Bermuda.
Norwegian said that the relaxation of the testing policy is in line with the rest of the travel, leisure and hospitality industry worldwide as society continues to adapt and return to a state of normalcy. The company added that it continues to strongly recommend all guests be up to date on vaccination protocols and test at their convenience prior to travel.
Norwegian Cruise Line Holding today reported financial results for the fourth quarter and full-year ended December 31, 2021, and provided a business update.
“We launched our Great Cruise Comeback in late July 2021 and in five short months, the teams at Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises have restarted operations on 75% of our capacity, safely carrying over 230,000 guests and delivering the unique vacation experiences that our award-winning cruise brands are famous for,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings.
“These last few months have also had their share of challenges caused by the impacts from the Delta and Omicron COVID surges, but despite these challenges which were mostly out of our control, our booked position and pricing remain strong, particularly for the second half of 2022 and into 2023, demonstrating the strong fundamental demand for our cruise offerings.”
The company continues to execute the phased relaunch plans for its 28-ship fleet. By year-end 2021, the company had approximately 70% of its capacity operating, or 75% when including a vessel that had returned to service and subsequently paused due to the inoperability of its scheduled voyages in South Africa during the height of its Omicron surge. Norwegian said strong ticket pricing and onboard revenue spend drove positive contribution from the fleet that operated in the quarter. Occupancy in the fourth quarter of 2021 was 51.4% reflecting the company’s self-imposed occupancy limits, the effect of COVID-related booking cancellations and a significant capacity increase from the prior quarter.
As a result of Omicron-related disruptions, the Company now expects to have 85% of its capacity operating by the end of the first quarter of 2022 with the full fleet expected to be back in operation during the early part of the second quarter of 2022. In addition, the company expects to reach a critical inflexion point during the second quarter of 2022 with net cash provided by operating activities turning positive. Based on the current booked position and trajectory, the company expects to have a positive Adjusted Net Income1 for the second half of 2022.
Norwegian said that net booking volumes at the beginning of the fourth quarter of 2021 continued to demonstrate substantial week-over-week sequential growth after the slowdown in booking activity caused by the Delta variant of COVID-19.
Net booking volumes in the latter part of the fourth quarter of 2021 began to be negatively impacted by the Omicron variant of COVID-19, primarily for close-in voyages in the first and second quarters of 2022. In recent weeks, as the Omicron wave subsided, net booking trends have improved sequentially.
As a result, the company’s current cumulative booked position for the first half of 2022 is below the extraordinarily strong levels of 2019 at substantially higher prices even when including the dilutive impact of future cruise credits (FCCs), while the booked position for the second half, when the full fleet is expected to be back in operation, is in line with the comparable 2019 period and at higher prices, also including the impact of FCCs. Booked position for each quarter compared to the comparable quarter in 2019 improves sequentially through the year. Booking trends for 2023 demonstrate continued strong demand for sailings in the medium and long term with booked position and pricing meaningfully higher and at record levels when compared to bookings for 2020 in 2019.
Of note, the company's monthly average cash burn for the fourth quarter of 2021 was approximately $345 million, slightly below the prior estimate of approximately $350 million. Looking ahead, the company expects the first-quarter 2022 monthly average cash burn to increase to approximately $390 million driven by the continued phased relaunch of additional vessels. This cash burn rate does not include expected cash inflows from new and existing bookings or contributions from ships that have re-entered service.
“Momentum continues building as we approach 85% of our capacity expected to be in operation at the end of the first quarter. We are keenly focused on executing our financial plan on the path to our next significant milestone as we expect to achieve positive Operating Cash Flow in the second quarter,” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd. “We continue to be opportunistic in accessing the capital markets to optimize our capital structure by eliminating high-cost debt incurred during the crisis.”
Pride of America
The full Year 2021 Results
GAAP net loss was $(4.5) billion or EPS of $(12.33) compared to a net loss of $(4.0) billion or EPS of $(15.75) in the prior year. The Company reported Adjusted Net Loss of $(2.9) billion or Adjusted EPS of $(8.07) in 2021. This compares to Adjusted Net Loss and Adjusted EPS of $(2.2) billion and $(8.64), respectively, in 2020.
Total revenue decreased 49.4% to $0.6 billion in 2021 compared to $1.3 billion in 2020. The adverse impact on revenue was due to the suspension of all cruise voyages in March 2020 through the first half of 2021 and the phased relaunch of certain cruise voyages with ships initially operating at reduced occupancy levels in the second half of 2021 as a result of the COVID-19 pandemic, which resulted in a decrease in Capacity Days of 18.1%.
Total cruise operating expense decreased 5.0% in 2021 to $1.6 billion compared to $1.7 billion in 2020. In 2021, our cruise operating expenses prior to the resumption of cruise voyages were primarily related to crew costs, including salaries, food and other travel costs; fuel; and other ongoing costs such as insurance and ship maintenance, including Dry-dock expenses. The reduction in cruise operating expense in 2021 reflects lower direct costs, such as commissions, in the second half of 2021 due to fewer Capacity Days partially offset by increases in expenses related to our return to services, such as costs related to crew and passenger testing for COVID-19.
Fuel price per metric ton, net of hedges increased to $690 from $599 in 2020. The Company reported a fuel expense of $301.9 million in 2021.
Interest expense, net was $2.1 billion in 2021 compared to $482.3 million in 2020. The increase in 2021 primarily reflects losses on extinguishment of debt and debt modification costs of $1.4 billion related to the repurchase of certain exchangeable notes as well as additional debt outstanding at higher interest rates, partially offset by lower LIBOR. 2020 included losses on extinguishment of debt and debt modification costs of $27.8 million.
Other income (expense), net was income of $124.0 million in 2021 compared to the expense of $(33.6) million in 2020. In 2021, the income is primarily related to gains from derivatives not designated as hedges and foreign currency exchange.
Income tax expense was $5.3 million in 2021 compared to $12.5 million in 2020. In 2020, the tax expense is primarily due to a valuation allowance of $39.6 million recognized in the fourth quarter on certain net operating loss carryforwards partially offset by tax benefits generated by operating losses.
Fourth Quarter 2021 Results
GAAP net loss was $(1.6) billion or EPS of $(4.01) compared to a net loss of $(0.7) billion or EPS of $(2.51) in the prior year. The Company reported Adjusted Net Loss of $(765.0) million or Adjusted EPS of $(1.95) in 2021. This compares to Adjusted Net Loss and Adjusted EPS of $(683.8) million and $(2.33), respectively, in 2020.
Revenue increased to $487.4 million compared to $9.6 million in 2020 as cruise voyages resumed in the quarter.
Total cruise operating expense increased 246.7% in 2021 compared to 2020 as cruise voyages continued to resume in the quarter. In 2021, cruise operating expenses were primarily related to crew costs, including salaries, food and other travel costs as ships were prepared to return to service, fuel, costs related to health and safety protocols and other ongoing costs such as insurance and ship maintenance.
Fuel price per metric ton, net of hedges, increased to $737 from $574 in 2020. The Company reported a fuel expense of $125.9 million in the period.
Interest expense, net was $950.0 million in 2021 compared to $159.2 million in 2020. The increase in interest expense primarily reflects losses on extinguishment of debt and debt modification costs of $771.6 million related to the repurchase of certain exchangeable notes as well as additional debt outstanding at higher interest rates, partially offset by lower LIBOR.
Other income (expense), net was income of $66.5 million in 2021 compared to the expense of $(1.3) million in 2020. In 2021, the income is primarily related to gains from derivatives not designated as hedges and foreign currency exchange.
Norwegian Cruise Line has extended the suspension of all its proposed sailings until the end of November.
All Voyages for Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises with embarkation dates from 1 November until 30 November 2020 are cancelled.
Guests with bookings are being told to contact their travel agent or NCL direct.
NCL said: “The Company will continue to work in tandem with global government and public health authorities and its Healthy Sail Panel expert advisors to take all necessary measures to protect its guests, crew and the communities visited.”
NCL operates 28 ships with 59,000 berths and plans to add nine additional vessels by 2027.
Norwegian Cruise Line Holdings postpones return until November
Norwegian Jade
Norwegian Cruise Line Holdings’ three lines – Norwegian Cruise Line, Oceania and Regent Seven Seas Cruises -- will not sail until November.
NCLH is the latest cruise company to push back the suspension of sailings beyond the Centers for Disease Control and Prevention’s No Sail Order through Sept. 30.
Most of the major cruise lines serving the North American market have extended their pause to conform to the CDC order, including the Royal Caribbean Group brands, Carnival Cruise Line and MSC Cruises. Princess recently extended its suspension of nearly all cruises through mid-December, and many Holland America ships are not slated to set sail until mid-October or November.
Windstar Cruises recently pushed back its Tahiti sailings, which are to be the line’s first cruises to resume service, from Sept. 10 to Oct. 15, to align with the CDC order.
Christie Brinkley named Seven Seas Splendor godmother
Former supermodel Christie Brinkley will be the Seven Seas Splendor godmother when the ship is christened in Miami on Feb. 21.
"Christie Brinkley is a universally beloved icon who is synonymous worldwide for her beauty, style and commitment to health and happiness," said Jason Montague, president and CEO of Regent Seven Seas Cruises.
"It's fitting that the godmother of Seven Seas Splendor reflects timeless elegance, vitality and sophistication, as Regent has perfected all the details of luxury onboard Seven Seas Splendor."
Brinkley gained fame with her three consecutive appearances on the cover of the Sports Illustrated swimsuit issue, starting in 1979. She is also known for her appearance in "National Lampoon's Vacation" as the girl in the red Ferrari and as a longtime model and spokeswoman for CoverGirl cosmetics.
The Regent Seven Seas Cruises ship is a 750-passenger sibling of the Seven Seas Explorer.
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.
Norwegian Cruise Line boss nets $1.3m in the share sale
Norwegian Cruise Line boss Andy Stuart netted $1.3 million from the sale of shares.
He sold 25,000 shares in parent company Norwegian Cruise Line Holdings in two tranches last week, according to a filing with the US Securities and Exchange Commission.
The sale at $50 per share came after the company reported record second-quarter financial results with earnings of $240.2 million for the three months to June 30.
The lift in profits came despite the impact of the abrupt US government ban on cruise ships calling into Cuba and a technical problem with the ship Norwegian Pearl which forced one cruise to be amended and another to be canceled.
Company president and CEO Frank Del Rio said at the time: “The underlying fundamentals of our business remain strong across all core markets, and we continue to expect record financial results in 2019, despite the impact from the change in federal regulations which resulted in the cessation of premium-priced Cuba sailings.”
NCLH has a market capitalization of $10.88 billion and controls NCL alongside Oceania and Regent Seven Seas Cruises.
Norwegian Cruise Line Holdings CEO Frank Del Rio said the company's decision to return to the Eastern Mediterranean in 2019 is working out so far.
After pulling out of the region in 2016 because of terrorism fears and political instability in Turkey, NCLH has scheduled 12 sailings this year and has an additional 20 on the calendar for 2020.
"All 12 sailings in 2019 are better loaded and at higher pricing than the surrounding sailings that do not include Turkey," Del Rio said.
He told investors on a conference call to discuss fourth quarter and 2018 earnings that Turkey is the key to the itinerary.
"The fact that the North American consumer, who is the one booking most of these Eastern Mediterranean cruises, seem to want to come back to the eastern Med and is willing to pay a premium price bodes very well for 2020," Del Rio said.
The risk is that itineraries must be developed and sold 18 to 24 months in advance of sailing, he continued.
"So you test the waters, you see what happens, and it takes you a while to really ramp up. So at this point, assuming there are no other disruptions -- reasons to not go to the Eastern Med -- I expect that we along with the rest of the industry will probably increase the number of deployments to the Eastern Med beginning in 2020 and even more in 2021."
Del Rio, who has a hand in all itinerary planning at NCLH, said that when the eastern Med is good, "it's as good as any, if not the best, of all itineraries."
On the call, Del Rio said NCLH enters 2019 in the best-booked position in its history, giving yield managers more leeway to raise prices.
"We're pushing prices higher wherever we can," Del Rio said. "While we still have a lot of cabins to fill, the emphasis will be on raising prices -- on all three brands."
In addition to Norwegian Cruise Line, NCLH operates Oceania Cruises and Regent Seven Seas Cruises.
The company had net income of $954.8 million in 2018, up 25.6% from the $759.9 million recorded a year earlier. Revenue rose 13% to $6.1 billion.
Last year, NCLH decided to redeploy the Norwegian Joy from China to Alaska, where it will cruise starting in April alongside sister ship Norwegian Bliss. That will increase NCLH's presence in Alaska to 9% of total capacity, up from 7% last year.
Capacity in the Asia Pacific region will drop to 6% from 12% last year. NCLH will have six ships in Europe this summer and capacity there increases to 23% from 20% last year, while year-round capacity in the Caribbean is pegged at 36%.
Norwegian Cruise Line Holdings confirms two more Leonardo-class ships
Norwegian Cruise Line Holdings has confirmed options to build fifth and sixth Project Leonardo-class ships for Norwegian Cruise Line with Fincantieri.
Frank del Rio, NCLH’s president and chief executive officer, said the decision to build two more 3,300 passenger-capacity ships, due for delivery in 2026 and 2027, showed “strong growth trajectory”.
He said: “Our six-ship Leonardo Class fleet will allow us to broaden our deployment into strong performing and mature unserved and underserved markets and offer new experiences to our guests.”
In a statement, the company said the focus of the new ships’ design was energy efficiency and building a size of vessel that would encourage broad deployment opportunities.
Andy Stuart, NCL’s president and chief executive officer, said: “The highly-anticipated Leonardo Class will fuel future growth with exciting and innovative offerings that will meaningfully drive demand from new and loyal returning guests alike.”
With Thursday’s announcement, NCLH has seven ships on order for Norwegian Cruise Line and one for Regent Seven Seas Cruises for delivery through 2027.
The company will take delivery of its newest ship, Norwegian Encore, in autumn 2019.
Norwegian Cruise Line entered the Chinese market last year with the Norwegian Joy.
Norwegian Cruise Line Holdings CEO Frank Del Rio told analysts that his ships were "in the right place at the right time" in 2017 but admitted that there were plenty of spots on the map he'd like to cover with new ships.
"We have so many markets that are unserved by us or grossly underpenetrated by us," Del Rio said in a question-and-answer session with analysts to discuss fourth quarter and 2017 earnings in February.
"We don't have a presence in the Mid-Atlantic states," he said. "We're not in Baltimore. We're not in Charleston. We don't have a presence at all in the world's second-largest port, which is Fort Lauderdale."
And the list kept growing.
"We don't have a presence in the Gulf states of Texas or Alabama," he said. "We don't have a year-round presence in Tampa or New Orleans or Los Angeles. We only have three ships in Alaska, which is a very high-yielding market. Some of our competitors have up to eight vessels."
Del Rio said that given the fleet size and the company's intention to build only one new ship a year for its Norwegian Cruise Line brand, it could be a couple of years before he would consider adding a second ship in China, because, although profitable, it was not a banner year in China in 2017.
"I don't think China is hitting on all cylinders as it can," he said, referencing the continued tensions with South Korea and the resulting uniformity of short cruise itineraries, which only visit Japan.
Del Rio said that the Wave season for 2018 started strong and the company's outlook is bullish, driven by a strong economy and consumer demand.
"Our overall booked position during the first seven weeks of 2018 further improved compared to the same time last year," he said.
In addition to Norwegian Cruise Line, NCLH owns Oceania Cruises and Regent Seven Seas Cruises. The three lines operate a combined fleet of 25 ships with some 50,400 berths, offering itineraries to more than 450 destinations.
On average, guests of NCLH brands are booking five weeks earlier than they did at the end of 2016, Del Rio said.
NCLH net income rose 23% last year, to $780 million, as European pricing and bookings recovered faster than expected and the booking curve extended to a near-optimal length.
Norwegian Cruise Line Holdings' momentum accelerates into 2018
Norwegian Cruise Line Holdings' net income rose 23% last year to $780 million, as European pricing and bookings recovered faster than expected and the booking curve extended to a near-optimal length.
Revenue rose 10.7%, to $5.4 billion.
The Wave season for 2018 has started strong and the outlook for 2018 is bullish, driven by a strong economy and consumer demand, CEO Frank Del Rio said.
"This year is by far the most excited, the most energized and the most optimistic I have ever been at the start of a new year," Frank Del Rio said.
He said the strong demand environment of late 2016 and 2017 has "accelerated through this year's early Wave season, as both the number of bookings sold and the price points achieved reach record levels" across all three brands -- Norwegian Cruise Line, Regent Seven Seas Cruises and Oceania Cruises.
"Our overall booked position during the first seven weeks of 2018 further improved compared to the same time last year," he said.
He said on average NCLH guests are booking five weeks earlier than at the end of 2016.
Del Rio said the weak link if there is one, is China. "I don't think China is hitting on all cylinders as it can," he said, referencing the continued tensions with South Korea and the resulting uniformity of short cruise itineraries, which can only visit Japan. Nevertheless, he said China was profitable in 2017.
A big change is coming to Norwegian Cruise Line Holdings Ltd.
Pending a shift from the Nasdaq Global Select Market to the New York Stock Exchange, ordinary shares of the parent corporation to Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises are anticipated to make the switch on December 19, 2017, while remaining under the existing “NCLH” ticker symbol.
“We are pleased to partner with the New York Stock Exchange as the new home for our stock listing and look forward to joining the collection of preeminent companies listed on the exchange,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings, in a press release.
“This move marks the latest initiative in our continuous drive to increase our Company’s profile in the marketplace and enhance shareholder value by drawing on the NYSE’s unique competencies and capabilities which make it the ideal listing platform for our Company. We are grateful for the support Nasdaq has provided us over the last five years since our successful IPO and our inclusion in the prestigious Nasdaq-100.”
Until the transfer is finalized, Norwegian will continue to be traded on Nasdaq.
“We are delighted to welcome Norwegian Cruise Line Holdings to the NYSE community,” said NYSE President, Tom Farley, in the release.
“As the operator of three award-winning cruise brands — Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises — Norwegian Cruise Line Holdings has been creating treasured vacation memories for its guests for over 50 years. We are committed to a long-term partnership with Norwegian Cruise Line Holdings and its shareholders and look forward to being a valued partner in the company’s future growth by providing the highest quality markets and services.”
Several cruise lines employ butlers in their exclusive accommodations. Onboard Royal Caribbean International's ships, they are called Royal Genies.
As the co-owner and president of a Virtuoso-affiliated agency, Paul Largay never had much interest in Norwegian Cruise Line. The Waterbury, Conn., travel seller had cultivated a luxury clientele who preferred upscale lines such as Silversea Cruises, Regent Seven Seas Cruises and Seabourn.
But after Norwegian added the Haven to its ships, Largay began selling the line.
"It's a very viable alternative," he said.
The Haven, a secured enclave of luxury cabins around a courtyard, has re-engineered Norwegian into a line with both a mass-market and a luxury clientele, and its arrival on the scene has led almost every other operator of large cruise ships to tout some sort of exclusive accommodation.
Each has its own variation: MSC Cruises has the MSC Yacht Club, Royal Caribbean International and Celebrity Cruises have Suite Class, Disney has Concierge Level and Holland America Line offers the Neptune Lounge.
Even Carnival Cruise Line, the most egalitarian of the bunch, offers the Havana Cabana enclave on its newest ships.
The reasons that luxury enclaves have evolved on ships are many, but a common thread is the premium pricing that cruise lines can command by creating an aura of exclusivity to which guests can aspire.
Suites in the enclaves tend to be among the largest at sea, an attraction for some guests and yet another revenue enhancement.
In most cases, these cabins come with exclusive use of other areas, such as private pools, restaurants and lounges.
Guests with Suite Class accommodations aboard the Celebrity Silhouette have access to the exclusive Michael’s Club lounge.
Kimberly Wilson Wetty, co-president of Valerie Wilson Travel, said, "I think it has created the aspiration for people to say, 'How do I get to that next level? I want that perk, that experience. What do I have to do to get there?'"
Several agents compared the rise of luxury enclaves at sea to similar choices in other hospitality sectors, such as a business class on international airlines or private luxury railcars added to trains.
Airlines have started opening unadvertised invitation-only dining venues in some airports for their best customers. And hotels-within-hotels are proliferating, especially in Las Vegas. At the Wynn Tower Suites, located in the 2,716-room Wynn Las Vegas, guests have a private entrance, a personal shopper, an exclusive restaurant and a private pool, with amenities.
Gaming also played a role in the creation of the Haven, which can trace its origins to large villa suites built for Star Cruises, an Asian line that shares common ownership interests with Norwegian through parent company Genting Group.
After acquiring Norwegian in 2000, Genting began to swap ships intended for Star Cruises into the Norwegian fleet. Ships such as Norwegian Dawn have a pair of three-bedroom, $25,000-a-week Garden Villas on the top deck. Those evolved into the Courtyard Villa, an enclave of 12 access-controlled suites when Norwegian launched its Jewel class of ships in 2005.
The exclusivity of the Courtyard Villas was one component of a package of extras that has continued to evolve. Rebranded as the Haven in 2011, the enclave cabins now come with access to a private restaurant, a private sun deck, private pool and a dedicated lounge and bar, all within the complex.
When Norwegian Cruise Line began offering the Courtyard Villa enclave in 2005, it opened the mass-market line to luxury clientele and prompted other cruise lines to follow suit. The Villa concept evolved into the Haven by 2011.
Other benefits include the services of a concierge and butler, priority embarkation, debarkation and tendering and preference for seating at shows and for shipwide dining reservations.
In-suite amenities include a cappuccino machine, white-tablecloth room-service dining and sparkling wine, fruit and bottled water on embarkation day.
Bathrobes, linens, bath products and mattresses are all top of the line.
Enclaves such as the Haven tend to be found on mass-market ships, or at least ships above a certain size. One reason is that smaller luxury ships have no need for a separate high-end product. Just as important, they don't have the real estate.
Holland America Line, whose largest ship is the 2,650-passenger Koningsdam, does not offer a luxury enclave but does have the Neptune Lounge, a midship social area with refreshments and concierge service. It is reserved for guests booking the top Neptune and Pinnacle suite categories, who also get exclusive access to the ship's premier Pinnacle Grill for breakfast.
Sally Andrews, vice president of public relations for Holland America, said it's a question of economics.
"Dedicating private space for a segment of guests related to their accommodations really comes down to [return on investment] on use of that space for a small versus a larger number of guests," Andrews said.
A table in the Queens Grill on Cunard Line’s Queen Victoria, which offers a sweeping view. Photo Credit: TW photo by Tom Stieghorst
It began with 20 penthouses
Some observers trace the origins of the enclave idea to Queen Elizabeth 2.
In 1972, a refurbishment of the Cunard Line ship resulted in the addition of 20 penthouses to the 70,000-ton ship. A nearby bar/nightclub was converted to an exclusive restaurant called the Queen's Grill.
By the time Carnival Corp. commissioned a successor for the ship in 1998, the Queen's Grill accommodations had become a status symbol, and Carnival incorporated them into the Queen Mary 2, as well as into later ships Queen Elizabeth and Queen Victoria.
Larry Pimentel, one-time president of Cunard and currently president and CEO of Azamara Club Cruises, said Cunard was a bridge between the transport era of passenger shipping and modern cruising.
Queen Elizabeth 2 was designed with separate classes in mind, with segregated spaces for each price level.
"They represented a bygone era of cruising, a bygone era of transport, actually," Pimentel said.
Ships designed for cruising post-Queen Elizabeth 2 were one-class ships, Pimentel said. Only recently have separate classes crept back into the equation, in part to attract and keep a discerning type of customer.
The creation of a ship within a ship enables mass-market lines to pitch their cruises to more-affluent guests.
"While it is not strictly class-communicated, the reality is that there is a group of people who always want the best," Pimentel said. "What's happened in the industry is that there's going to be a bigger and bigger play for these people who have these desires to have the most space, to have the most in elegance and luxury, have their own space, their own pools, their own restaurants, etc."
The premium for staying in an enclave like the Haven can be five to 10 times the cost of an inside cabin, depending on deployment and time of year. MSC Cruises calculates that the per-person cost of staying in its Yacht Club enclave averages about $1,500 more than for a standard cabin.
One longtime observer of luxury cruising said it might or might not be worth the price.
"Theoretically, it's good," said Mark Conroy, managing director of the Americas for Silversea Cruises.
Conroy said one of the most appealing parts of the enclave idea is the ability to offer two ships in one. There's an "uptown" sanctuary with refined furnishings and service and a "downtown" for energy, variety and scale. But to make it work, the "downtown" has to be worth going to, he said.
"The challenge is in the execution, and some companies have been better than others," Conroy said.
Another way the uptown/downtown idea plays out is in attracting large family groups.
"It's been wonderful for the multigen families," said Valerie Wilson's Wetty. "If you have a very luxury client, let's say it's grandparents, or mom and dad, but they might want to take the whole family, they're not willing to compromise their standards."
With an enclave, the luxury client can afford luxury accommodations without springing for a luxury ship for the entire group, she said.
A staircase embedded with Swarovski crystals connects two decks in MSC Cruises’ exclusive section, the MSC Yacht Club. Access to a concierge desk and the Top Sail Lounge are some of the perks for Yacht Club guests.
MSC Cruises has earned a reputation for affordable family cruising with its kids-sail-free promotion. Its Miami-based ship, the MSC Divina, is one of five in its fleet equipped with an MSC Yacht Club enclave.
The enclave includes 66 suites arrayed over two decks connected by spiral staircases with embedded Swarovski crystals. There is a private lounge, a library and butler service for all Yacht Club guests. They also get an adjacent private pool, access to a VIP area of the disco and special access to the spa.
Bernard Stacher, vice president of hotel operations for MSC, said guests are paying for more than exclusivity.
"That's a portion of it, but it's not the majority," Stacher said. "It also comes down to the personalized, tailored service, to really unique and fast access to the ship on and off, the choice of the finishings we choose and the no-questions-asked attitude from the staff in the Yacht Club. I think that plays a big part.
"Yes, you are away from the crowds, you have your own private pool, but it's the sum of all the parts that make the Yacht Club so exciting," Stacher said. "It's not one thing."
In marketing the enclaves, cruise executives walk a fine line between appealing to discriminating customers and coming off as elitist.
Wetty said exclusivity inevitably rubs some people the wrong way.
"There was a pushback in the industry of saying, 'Hey, that doesn't feel fair or right,'" she said. "How can you create a ship that you pay a certain price and you only get access to a certain part of the ship?"
Wetty said the key for lines that have made an enclave product successful was positioning it as an extra to an already handsome package.
"Those lines are creating a consistent experience for everybody, so nobody feels they got less than somebody else," Wetty said. "But then if you pay more, you get something a little extra special."
The Royal Loft Suite on the Anthem of the Seas.
Not every line offering exclusive luxury accommodations has gone the route of building a full enclave.
Celebrity Cruises and Royal Caribbean International, both brands owned by Royal Caribbean Cruises Ltd., offer guests a Suite Class package of benefits that includes a separate lounge and restaurant, among other perks.
Suites are in different areas depending on which of Royal's eight ship sizes they are sailing.
On Celebrity, Suite Class guests have the Luminae restaurant and Michael's Club to themselves. On Royal, Suite Class includes a suite lounge and sun deck and the Coastal Kitchen restaurant on some ships.
Top suites come with Royal Genies, a name for what other cruise lines call butlers.
"We thought it was a fun twist on this idea of a butler," Royal Caribbean president Michael Bayley said. "We think part of our success is not taking ourselves too seriously."
Bayley said that Royal has the same package of amenities that competitors do, but "we just haven't put them in one place." Royal guests, he said, "want to be engaging with the world around them." Still, he said, he wouldn't rule out building a dedicated luxury enclave area on future ships.
Even Carnival Cruise Line, which prides itself on being unpretentious, has cosied up to the enclave concept. On its latest ship, the Carnival Vista, it has created the Havana Cabana, an area of 61 cabins with a lounge and pool area with a tropical-leisure theme.
Most of the cabins are on deck five and feature a sliding door that opens to a 100-square-foot patio with a swing chair. A key-card gate keeps the aft part of the promenade that encircles Deck Five closed during the day. Also behind the gate is the aft pool and hot tub area. A few Havana cabins are located on decks six and seven and have enlarged balconies rather than patios; these cabins also include access to the pool.
In the Havana Cabana section onboard the Carnival Vista, guests have exclusive access to an aft pool area and a promenade. Carnival is expanding the 61-cabin exclusive section on the Horizon, due next year. Photo Credit: TW photo by Tom Stieghorst
Carnival Cruise Line president Christine Duffy said that limiting access to the pool hasn't caused any issues. The Havana Cabana is the only area on Carnival's 25 ships that aren't open to all passengers.
"We really haven't had any complaints, as there are so many other options on the Carnival Vista," Duffy said.
Carnival is expanding the area on the Horizon, due in April, by 18 cabins. Other luxury enclaves are also growing. The Yacht Club on MSC Seaside, which will be christened in Miami in December, will have 80 suites, the most ever.
In the future, cruise executives said, the enclave concept could be expanded to include more dedicated entertainment. MSC has a piano player in its Yacht Club, and it will rotate a violin duo into the mix on the Seaside.
Pimentel said that other ideas will percolate for small musical ensembles.
"I think it is possible that some of the units that have a lot of space begin to have venues for that space that could be a small, tiny jazz club," Pimentel said. "I think the industry's just going to push the edges on that one."
