Norwegian signs 15-year lease in Seattle

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Norwegian Cruise Line will be sailing in the Pacific Northwest for the foreseeable future.

The Port of Seattle said it has signed a 15-year berthing agreement with Norwegian Cruise Line Holdings that includes passenger volume guarantees that will assure $73 million of revenue to the port.

Norwegian Cruise Line Holdings is parent not only to Norwegian Cruise Line, but to Oceania Cruises and Regent Seven Seas Cruises. All three regularly sail to Alaska in the summer months.

Port of Seattle CEO Ted Fick said a 15-year lease for a cruise terminal is unprecedented on the West Coast. “Norwegian Cruise Line is showing real vision by investing in the economic growth of this region,” Fick said.

The agreement calls for Norwegian to make an estimated $30 million of improvements to the Bell Street Cruise Terminal that will expand the portion of the Pier 66 facilities used for processing cruise passengers.

During the summer season, Norwegian will manage cruise operations at the terminal, which is closer to downtown Seattle than the Smith Cove terminal used by Holland America Line, Princess Cruises and others. It will also have priority docking privileges.

Reinventing Norwegian

Perhaps no company has had more revolution in the top management than Norwegian Cruise Line, which has had to structure new roles for executives following the $3.03 billion acquisition of Prestige Cruise Holdings and its two brands, Oceania Cruises and Regent Seven Seas Cruises. 

Closing the deal in November set off a cascade of changes that began with a new corporate structure under a parent company, Norwegian Cruise Line Holdings (NCLH). 

Next, Prestige President Kunal Kamlani resigned, followed two months later by NCLH CEO Kevin Sheehan.

With former Prestige Chairman and CEO Frank Del Rio stepping up to take Sheehan’s place, openings were created for Stuart, 51, and Montague, 41, to step into brand president roles. 

Stuart, a 27-year Norwegian Cruise Line veteran with a long history on the sales side of the company, said in an interview after being promoted that he would continue to be more involved in sales than the average brand president.

“The key part of this role really is driving demand for the brand,” Stuart said. “I’m going to be very, very involved with travel partners.”

For their part, travel agents are thrilled to have Stuart in such a high-profile role because, said Signature’s Sharpe, they credit him with the line’s “Partners First” initiative and its support for the agent distribution channel.

“I keep getting members calling me,” Sharpe said. “They’re so happy for him and for us.”

Only time will tell whether all the change at the top is ultimately good for the cruise industry and travel retailers. But like Sharpe, Wall is optimistic that the positive energy of new blood will outweigh the loss of experience and institutional memory at some lines.

“It’s easy to have tunnel vision and automatically assume the way to go is the way it’s always been,” Wall said.

Coggins, too, said that on balance the changes are positive. 

“If you bring someone in from another industry, they come with fresh ideas,” Coggins said. “They bring the perspective that will help attract the first-time cruiser.”

Oceania ship to be out of service for nine weeks following fatal engine room fire

Oceania Cruises’ ship Insignia will be out of service for more than two months following an engine room fire which killed three workers and injured another crew member.

The line has been forced to cancel a 24-day cruise over Christmas from Miami and the first three legs of an unprecedented 180-day round the world voyage.

The world cruise, which had been due to depart from Miami on January 10, will now begin in modified form in Singapore on March 22. Fares for the cruise began at $41,999.

The fire on the ship occurred on December 11 in St Lucia while it was on a 10-day sailing from Puerto Rico. The 656 passengers on board at the time were safely evacuated from the ship and flown to Miami and the remainder of the cruise was cancelled.

Parent company Norwegian Cruise Line Holdings has now confirmed that repairs to Insignia are expected to take about nine weeks.

President and CEO Kevin Sheehan said: “The timing of repairs has unfortunately required the cancellation of Insignia’s holiday voyage along with the modification of the world cruise.

“We understand how disappointing this news must be to our valued guests and we extend our sincere appreciation for their co-operation and understanding.”

The financial impact on the fourth quarter of 2014 and the first quarter of 2015 is estimated to be a reduction in earnings of approximately $0.05 and $0.05 per share, net of insurance proceeds, respectively, the company said.