Tag Archives: Miami

Norwegian Cruise Line disappointed in Caribbean returns

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Norwegian Cruise Line Holdings CEO Frank Del Rio said the company’s “lofty” expectations for the Caribbean this summer have not been met, one factor in revising expectations downward for the rest of the year.

In a conference call to discuss second-quarter results, Norwegian lowered its guidance for second-half earnings and said it will not make its previously forecast goal of earning $5 a share in 2017.

A big part of the problem is lower demand for European cruises by North Americans due to geopolitical factors. But Norwegian surprisingly said that keeping two big new ships, Norwegian Escape and Norwegian Getaway, in Miami for the summer has not worked out.

“Today is not a happy day at Norwegian headquarters for obvious reasons,” Del Rio said. “We had to reset expectations based on the current booking environment.”

Although yields are still up in the Caribbean from last year by mid-single digits, Del Rio said strong pricing growth did not fully materialize.

As a result, in 2017 Norwegian Getaway will be deployed on Baltic itineraries for the summer months. “It’s a recognition that high expectations just aren’t being met,” Del Rio said, “almost exclusively due to heavy concentration of inventory during the weak period.”


The Norwegian Getaway is leaving Miami for the Baltics next summer.

Del Rio also delivered bad news about Europe. Norwegian had been seeing modest traction in the weeks following the Brussels terrorist attack in March. But with the bombing of the airport in Istanbul, the Nice truck massacre and the failed coup in Turkey, that “evaporated,” Del Rio said.

About 70% of Norwegian’s passengers on European itineraries are sourced in North America, considerably higher than competing cruise companies.  Attracting more Europeans will produce lower ticket and onboard spending revenue, Del Rio said.

Del Rio also said South American itineraries are soft, and are being impacted by perceptions about the Zika virus.

Norwegian reported a decline in earnings in the second quarter to $145.2 million, down from $158.5 million a year earlier. Revenue increased 9.3%, to $1.2 billion.

In late morning trading, shares of NCLH were down over 9%, to $39.04, while stocks overall were up slightly.

Agents get reacquainted with Royal Caribbean’s Empress

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Royal Caribbean International recently spent $50 million to refurbish the Empress of the Seas. It originally joined Royal in 1989 as the Nordic Empress and had been sailing for Pullmantur until earlier this year. The 1,602-passenger ship is currently doing 4- and 5-day Caribbean cruises from Miami through Oct. 29, but Royal expects to use it for cruises to Cuba once the Cuban government gives permission. Shown here is the pool deck.<br /><br /><strong>Photo Credit: Tom Stieghorst</strong>

Royal Caribbean International recently spent $50 million to refurbish the Empress of the Seas. It originally joined Royal in 1989 as the Nordic Empress and had been sailing for Pullmantur until earlier this year.
The 1,602-passenger ship is currently doing 4- and 5-day Caribbean cruises from Miami through Oct. 29, but Royal expects to use it for cruises to Cuba once the Cuban government gives permission. Shown here is the pool deck.

Photo Credit: Tom Stieghorst

 
Royal Caribbean International has an unusual dilemma with the Empress of the Seas.

Because it is planning to sail the ship to Cuba when it gets approval from Cuban authorities, it can’t plan cruises very far ahead on the ship’s current Caribbean itineraries.

So, for example, it can’t sell groups early in the booking cycle to get a base of business going. It only has inventory available through Oct. 29, basically a three-month window.

Moreover, Empress is an old ship — the former Nordic Empress — albeit with a recent $50 million makeover. There’s nothing really like it in the rest of the Royal fleet.

So Royal held an open house for agents last week, in a bid to show off the improvements, help agents get a better understanding of the ship and bring it top of mind.

The ship looked remarkably good for a 27-year-old vessel. Some minds were changed.

Cheryl Scavron, a Dream Vacations franchisee in Pompano Beach, Fla., said she initially thought the ship and its four- and five-day itineraries was best suited as a party cruise for young people. “Now that I see it again, I think this would be nice for a couple,” she said.

Over the course of a couple of hours, about 200 agents got a thorough tour of the ship’s cabins and public spaces. They also got entertained by a Cuban combo in boleros; had a sample of the mixed drinks served onboard; saw snippets of two main theater shows, “Bailamos” and “Three”; and had a lunch of branzino or steak in the main dining room.

Two Royal executives, senior VP of hotel operations Mark Tamis and senor VP of sales Vicki Freed, hosted the event, but Scavron was impressed that Royal brought sales reps, not only from South Florida, but from as far away as California, to conduct the tours.

“Vicki really knows how to sell a ship,” Scavron said. “She brought in enough people, and had good entertainment. She made the ship look the best it can look,” she said.

Norwegian Getaway embarks on Olympic charter

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The Norwegian Getaway departed Miami on July 24 on the first leg of its 40-day charter for the 2016 Summer Olympics in Rio de Janeiro.

Details of the charter were provided for the first time by Landry & Kling, the Miami specialist in meetings at sea and incentive cruises, which brokered the deal.

Landry & Kling said the charter was first discussed in 2007 and is the largest in its 34-year history. Financial terms weren’t disclosed.

The 4,000-passenger Getaway will take the better part of 10 days to get to Brazil before taking up residence at Pier Maua in Rio from Aug. 4 to 22. Chartered by the Rio 2016 Organizing Committee, it will provide supplemental housing for corporate sponsors and Olympic committees.

The Getaway’s departure leaves Norwegian Escape and Norwegian Sky to hold down Norwegian’s Caribbean cruise business from Miami in August.

Firm co-founder Joyce Landry is blogging from the ship during the charter.