Tourism & Cruises

New Norwegian CEO: No ‘revolutionary’ announcements — yet

Frank Del Rio
Frank Del Rio

In his first earnings call since taking over as head of Norwegian Cruise Line Holdings — and the first since the company acquired a pair of small upscale lines — president and CEO Frank Del Rio said he sees major opportunities ahead.

But he didn’t offer any insight on potential changes in direction for the world’s third-largest cruise company.

“I know that some of you are expecting some sort of revolutionary announcement regarding Norwegian’s future, but it is simply too early in the game to make any definitive declarations regarding expansion into new markets, orders for new ships or any other major strategic announcements,” Del Rio told analysts. “These things may happen in time, and if they do happen, they will be after intense study and careful consideration.”

The Miami-based cruise company held the call Wednesday morning after releasing fourth-quarter and full-year earnings for 2014 late Tuesday. While profits for the full year jumped to more than $338 million, the company reported a loss of more than $25 million in the fourth quarter due to expenses related to the November acquisition of Prestige Cruise Holdings. That included Oceania Cruises, considered an “upper premium” product, as well as the luxury Regent Seven Seas Cruises.

Del Rio, who was head of Prestige before taking over at the parent company in January, said he thinks one of the biggest opportunities for the Norwegian Cruise Line brand is expanding its international reach.

“If the Norwegian brand were to able to source the same percentage of guests internationally outside of North America that the Prestige brands generate, that would produce 210,000 new passengers a year,” he said.

For the upscale brands, Del Rio said the company has found more than 200,000 households who previously sailed on Norwegian but might be good fits for Oceania and Regent.

“We’re going to be marketing heavily to them,” he said. “We love the opportunity of cross-selling, tying in Norwegian customers to Oceania and Regent.”

Del Rio indicated he was looking to Oceania and Regent for inspiration on other parts of the business as well, including finding ways to entice potential cruisers to book. Recent promotions at Norwegian, which has seen bookings spike recently, have focused on adding value to trips rather than lowering prices — a tactic that has worked at the other brands.

“We come from a mindset at Prestige brands where we market to fill as opposed to discount to fill,” Del Rio said.