Del Rio’s NCLH Reveals - Upgrades & Oceania Growth

Open Jaw

During the recent Norwegian Escape inaugural sailing, NCLH CEO Frank Del Rio revealed his plans for the 3 brands and his determination to command higher fares for mainstream Norwegian.

Although Norwegian’s new ships are beautifully appointed, it’s no secret that some of the line’s older vessels are in need of makeovers. 8 Norwegian ships are scheduled for overhauls in 2016 with 6 more heading to drydock in 2017. The upgrades will position the line for what is near and dear to Del Rio’s heart... increased revenues.

So, while drydocks are a very costly venture, the intent is to be able to command higher revenues which will more than make up for lost sailing times.

Norwegian will be spending a significant sum to elevate the condition of the fleet’s carpets, linens, restaurant cutlery and dishes as well as stem to stern thorough clean ups.

Among the 1st ships scheduled for an overhaul, in early 2016, will be Pride of America, which sails the Hawaiian itineraries year round.

Del Rio has committed to increasing NCLH’s revenues to $5 billion annually by 2017. At last tally, Norwegian’s revenues were $3.1 billion for 2014 while Regent Seven Seas and Oceania were previously under the Prestige Holdings and reported revenues of $1.17 billion. So far this year NCLH stock performance is up 55.4% - so investors seem to be onboard with Del Rio’s plans.

Other reveals from Del Rio:

R.S.S.’ Explorer 4,000 sq. ft. suite is sold out at $10,000 per night for all of its 17 sailings on the market. Seven Seas Explorer will join the Regent fleet in Q3 2016.

Del Rio hinted broadly to be prepared for the announcement of a new Oceania ship.

The next new-build for Norwegian to debut in 2017, currently under construction, will be the biggest ship dedicated to the Chinese market and have the largest casino of any ship.

That’s saying something since the casino on the Norwegian Escape is huge. New enclosed smoking areas will be incorporated in Norwegian casino areas starting in about 6 months time with the 1st ship schedule for the new enclosures to be the Escape. They want to ensure everyone is comfortable while ramping up their onboard gambling spend.

Del Rio is anxiously awaiting the Cuba government’s approval of more U.S. cruise ships. He says NCLH will likely serve that market with an Oceania vessel since about 700 pax is optimal for the market. He says since Cuba will not be a mass touristic product market, Oceania is better suited to an experiential type cruise.

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