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

The improvements go far beyond better relationships. The product is far better, too, say experts. “They’re building something you can actually sell with credibility as opposed to being the price leader,” Driscoll said. “It’s becoming a real cruise line — a real major cruise line.”

Thanks to the Partners First efforts and Norwegian’s new ships, CruiseOne travel agency franchisee Ralph Santisteban is sold.

“From a perspective of the entire product, hardware and software combined — not just the look and feel but how it works — I think that more than any other cruise line right now, Norwegian has got it right,” said Santisteban, of Kendall. “The changes for Norwegian have been huge steps, not baby steps.”

Freedom at sea

But, he cautioned, the product can be intimidating to an experienced cruiser who is unfamiliar with Norwegian’s “freedom and flexibility” model.

“They’re used to being herded,” he said. “You can have your freedom but you have to know how to deal with that freedom.”

And Norwegian is no longer alone in offering that freedom; its competitors also boast plentiful dining options at a range of quality and price levels.

“When Norwegian started freestyle, nobody did it,” said Carolyn Spencer Brown, editor in chief of the website CruiseCritic.com. “Now everybody does it. It needed something else to attract new travelers — new to Norwegian, new to cruise.”

The line has excelled at entertainment as well as creating “a really dynamic, vibrant ambiance onboard,” Brown said. Epic features performances from Blue Man Group and a cirque-style dinner show; Breakaway features three shows with links to Broadway, including Rock of Ages and Burn the Floor.

That’s why the cruise line is the first choice for Miami resident Cristo Farias, 45, who tries to take at least one cruise a year. Although he’ll sail on other lines, he said he prefers Norwegian’s food, entertainment, decor and vibe.

“I think NCL has a little more excitement in the pool areas, the deck areas, things going on,” said Farias, who has sailed on the Epic and already has a Getaway voyage booked.

But no one is resting on recent successes. Sheehan’s latest long-term plan is a tall order: to lead the higher-priced “premium” category that includes Holland America Line and Celebrity Cruises rather than the mainstream, which is dominated by Carnival Cruise Lines and Royal Caribbean International.

“As we’re growing our business, we’re trying to upscale it,” Sheehan said.

Stuart said that with the launch of the newest ship, the rest of the team is on board with the plan.

“If you look at the brands that we spend our time really looking at — Royal Caribbean, Celebrity, Princess, Holland — no one in our leadership today who has been on Breakaway has any doubt that we should be leading that category, however you want to define it,” he said.

Part of the job is getting those potential passengers, who might have been turned off by earlier Norwegian experiences, to try the line again.

“Of course, we’re trying to be out in front of the market a lot, so somebody from a Holland or Princess might say, ‘I keep hearing about this Norwegian Cruise Line, let me try it,’” Sheehan said. “They may like us. Bringing them in; it’s a journey.”

That journey includes efforts such as Sheehan’s humbling appearance on Undercover Boss, which has drawn huge publicity for the brand, and the company’s $7.5 million purchase of music cruise production company Sixthman Productions last year. That company packs ships for concerts with well-known acts in slower seasons, which ideally draws music fans who might not have cruised before.

FUTURE PLANS

The company must also decide if and when it will venture farther than its current route map, which includes the Caribbean, Bahamas, Mediterranean, Baltic, Mexican Riviera, Pacific Coast, Panama Canal, Alaska, Bermuda, Hawaii, New England and Canada. Unlike its larger competitors, Norwegian has not yet tested the waters in Asia and Australia — though they have drawn up sample itineraries and considered whether the move would make sense in the future. Majority shareholder Genting HK owns Star Cruises in Asia, which would lend some instant on-site expertise in the market.

McLeod, the consultant, said Norwegian could have easily tried to follow the pack and deployed ships quickly to those far-flung markets. But he said he thought they were wise to bide their time.

“It would look nice in a presentation perhaps, but they’re taking it slow,” McLeod said. “They’re saying, ‘We’re going to make our statement based upon what we can do well and truly compete in the markets that we choose to compete in.’ And I think that’s a strategy that’s going to serve them well.”

Whatever the plan, one thing is certain: Sheehan will be around to see it through. Earlier this month, he extended his contract (with a nearly 30 percent raise to earn a base salary of $1.55 million) for at least another three years with the option to stretch to five.

“I would like to see this through,” Sheehan said. “As long as I’m having fun.”

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