CRUISE INDUSTRY

With a string of successes, Norwegian Cruise Line is riding the wave

 

Norwegian Cruise Line by the numbers

Headquarters: Doral

Number of ships: 12, with at least two on the way

Number of total employees: Approximately 20,000 worldwide

Employees in Doral: About 1,000

2012 revenue: $2.3 billion

2012 net income: $168.5 million

Market cap: $6.38 billion

Stock price: $31.28


Company history

1966: Formed in Miami as Norwegian Caribbean Lines.

1987: Changed name to Norwegian Cruise Line.

2000: Acquired by Genting Hong Kong Ltd., formerly Star Cruises.

2008: Private equity groups Apollo Management and TPG bought a stake in the company, leaving Genting HK with 50 percent, Apollo with 37.5 percent and TPG with 12.5 percent.

2010: Introduced biggest ship yet, Norwegian Epic.

January 2013: Launched initial public offering.

April 2013: Took delivery of Norwegian Breakaway, based year-round in New York City.

January 2014: Norwegian Getaway arrives at its fulltime port in Miami.


hsampson@MiamiHerald.com

Unlike planning for Epic, which Sheehan said involved just a handful of people, the new ships were the result of brainstorming from every department.

“This is a ship that’s been built for people to have a ball — but it’s also a ship built to be very profitable,” Sheehan said.

Curtis, the Nomura analyst, said berths for the new capacity are priced on average 30-40 percent higher than the rest of the fleet. After Breakaway and Getaway, Norwegian is expecting at least one more ship in late 2015, in the slightly larger “Breakaway Plus” class. Announced last year, the approximately $930 million order included the option for a second 4,200-passenger ship, which expires next month. (Norwegian is widely expected to move forward with the second ship, which would be delivered in 2017.)

With the new ship, Norwegian has done away with the unpopular Epic elements (bathrooms on Breakaway are normal) and added new features including The Waterfront, an area of outdoor seating for restaurants and bars, and 678 Ocean Place, the ship’s hub on decks six through eight. Venues were placed to create the best flow, and passengers can check restaurant and entertainment availability on touch screens throughout the ship — and make reservations right there.

Core goals

While refashioning the onboard experience, Sheehan and his team have also worked to communicate the company’s core goals to all of its nearly 20,000 employees: travel agent advocacy, guest experience, brand communication and employee engagement.

To inspire a winning attitude, Sheehan even renovated the company’s Doral offices.

“It was a dump,” he quipped. He also orchestrated a $5 million donation on behalf of the company to Camillus House, a Miami homeless shelter; Sheehan said employees continue to support the organization with their own money and time.

And to make the food quality more of a priority, the company installed a test kitchen in its building that allows staffers to test out new products and recipes anytime — as opposed to only when a ship was in port.

Since 2011, one of the company priorities has been repairing relationships with the travel agent community after years of distrust — a crucial step for a cruise line that makes up just 10 percent of the industry and needs all the ambassadors it can get. Agents had been soured by customers’ poor experiences, especially in Hawaii, and were wary that Norwegian was trying to undermine them by marketing directly to consumers.

Called Partners First and spearheaded by Stuart, the effort proved Norwegian was serious by improving training for travel agents, increasing the spend on marketing support and communicating better, said Mike Driscoll, editor of the weekly trade publication Cruise Week.

“Andy Stuart’s done a spectacular job with the trade in terms of turning around the company that was in the toilet six years ago with trade relations,” Driscoll said.

Tolkin, co-owner of the cruise distribution company, said the change is evident internally as well.

“When Kevin came in with the Partners First program, you saw a more inspired management team,” he said. “It was just a different feel around corporate headquarters — and we deal with them every day. Now on top of a successful IPO, that inspiration I feel like is on steroids. There’s an extra spring in their step.”

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