Norwegian at cruise capacity ‘tipping point’

Norwegian at cruise capacity 'tipping point' Norwegian Cruise Line is coming to a “tipping point” in terms of new capacity arriving and needs to “get serious” about growing international markets to ensure it fills it.

The line, which recently launched Breakaway (pictured) and Getaway, will add another four new ships between 2015 and 2020.

Francis Riley, director of international markets, said: “We need to be looking at the long-term strategic investment in international markets; whether that’s through marketing, buying more charter seats, or how we’re driving more distribution.”

He said getting more agents selling Norwegian, and more training and education to make sure they are targeting the right customers, was key.

“The biggest opportunity for us is to support the capacity growth that’s coming in with all our new ships by developing our international business – and that bodes really well for the UK as it’s our biggest single market outside the US.”

Riley added: “I think my biggest fear is that typically, there’s only one cruise specialist in any agency. That keeps me up at night.

“Every agent sells a package but not every agent feels comfortable selling a cruise, and that has to be my biggest concern as the sector grows. It’s our responsibility as an industry to tackle this issue.”

He said he understood agents had a lot of pressures so said it was “important to make them understand the differentiation between the cruise brands”.

Riley claimed Norwegian’s Partners First scheme was enjoying huge success by rewarding agents that work in true partnership with the line to grow both their businesses.

He claimed that despite reducing base commission to 10%, Norwegian had paid out “just as much if not more” in rewards to those key agents that had performed really well for the line.

“Agents have the opportunity to earn well in excess of the base rate and many do. Many of them are retaining more commission than they ever have done with us,” he said.

Riley claimed Norwegian, having posted 24 quarters of consecutive growth, could now truly claim to be “industry leading rather than industry following”.

“By any measure, whether it’s EBITDA, net per share, net revenue, Norwegian is now best in class,” he said.

Norwegian’s new amenities package draws agent interest

By Tom Stieghorst

Andy Stuart, Norwegian Cruise Line’s executive vice president of global sales, said some 3,000 agents joined a webinar about its new all-in-one amenities package, about a third more than the typical audience for a Norwegian webinar.

Called the All-Inclusive, the new product is a package of packages, bundling Norwegian’s Ultimate Dining and Ultimate Beverage packages with Internet minutes, plus a bevy of other items not included in the cruise fare.

“We got a ton of positive feedback,” Stuart said.

The All-Inclusive package is offered on cruises of three to 14 days in 2015. For a seven-day cruise, it is priced at $899 per person, with higher or lower prices for shorter or longer cruise lengths.

Norwegian will pay commission on the package at the same rate as the cruise fare, with the exception of the gratuities that are included in the package.

“There’s absolutely no way to make a big promotion and offer a package that for a seven-night cruise is $899 and ask the travel agents to support it without paying commission,” said Stuart.

Norwegian ran numerous examples to test the idea that selling the package could double an agent’s commission and feels that is a valid claim, he added.

Vicky Garcia, COO of Cruise Planners in Coral Springs, Fla., called the package an “extraordinary” value and said it would help agents get customers focused on 2015.

“Also, this all-inclusive offer is combinable with other sales or promotions that are currently in the market,” Garcia said.

Norwegian said the package represents more than $2,400 of value per stateroom. Although the exact value will vary according to an individual’s choices, Travel Weekly found a seven-night guest paying a la carte could spend about $1,350 for what’s in the package (see breakdown, above left).

Inclusive packages are also valued because they create certainty about costs.

“A lot of people like to be done with it before the cruise starts,” Stuart said. “They like to have that element done, and they get on their vacation, and they’re not thinking about … should I do this or should I not do that because there’s a cost attached to it.”

Beyond the dining, beverage and Internet packages, the All-Inclusive package includes a $200-per-person credit toward shore excursions, prepaid gratuities, 20 photos of any size, three bingo cards, a bottle of wine, chocolate-covered strawberries and six large bottles of water.
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For cruises from three to five days, the shore excursion credit is $100 per person; and for sailings from nine to 14 days, the package includes 12 bottles of water.

“We felt very comfortable presenting this as an all-inclusive package,” Stuart said, adding that it will help Norwegian compete with all-inclusive resorts as well as with other cruise lines.

On select cruises, buying the All-Inclusive package also qualifies a guest for a 10% discount on the cruise fare.

At least initially, All-Inclusive will be available only from Aug. 4 through 29 on all 2015 cruises except those on the Pride of America. Stuart said there will be discussion later of how long to continue the package.

“It’s the first time the industry has ever done this, so we want to get a sense of whether it resonates with travel agents,” he said.

Stuart said Norwegian has seen a growing interest in inclusivity among its guests, and did research about what elements to include in the package. It found the most valued benefit was prepaid service charges, followed by the Ultimate Dining package and then the Ultimate Beverage package.

One unexpected result of the research was that first-time cruisers expressed as much or more interest as past cruisers in buying the package.

“That took us by surprise, I must say,” Stuart said. “But it encouraged us, because it really showed there was a broad audience for this promotion.”

Norwegian add-on package bundles several extras

By Tom Stieghorst

Norwegian Cruise Line will offer an add-on package that can be pre-purchased and includes a kitchen sink of items that cost extra on a cruise.

The package, priced at $899 per passenger for a seven-day cruise, bundles Norwegian’s prepaid dining and beverage packages with a $200-per-person shore excursion credit, 250 minutes of Internet access, prepaid gratuities, 20 photos of any size, a bottle of wine, six bottles of water, one bingo session and chocolate-covered strawberries.

Apart from service charges and gratuities, the package is fully commissionable to travel agents at the agent’s contracted rate, a Norwegian spokeswoman said.

Norwegian’s dining package offers complimentary access to a specialty restaurant each night of the cruise; its beverage package includes cocktails, beer and wine up to $10 a glass and unlimited fountain sodas and juices.

The package is for sale Aug. 4 to 29 and applies to all 2015 cruises of three to 14 days, except those on Pride of America. Pricing is by length of cruise. Shore excursion credits on shorter cruises are $100 per person instead of $200.

Norwegian said adding the package to select cruises will reduce the fare by 10%.

Norwegian said the package is the first of its kind in the cruise industry.