Tag Archives: Prestige Cruise Holdings

Diversification and Norwegian’s bottom line

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By Tom Stieghorst
The benefits of diversification in the cruise industry will be evident this week when Norwegian Cruise Line Holdings reports its results for the fourth quarter and calendar year 2014 on Tuesday.

Norwegian, until recently a single-brand company, is heavily tied to the Caribbean in the fourth and first quarters. According to analyst Rachel Rothman, of Susquehanna Financial Group, Norwegian’s results will be pulled down by its high exposure to the Caribbean relative to its competitors Carnival Corp. and Royal Caribbean Cruises Ltd.

Norwegian does not benefit from growth in Asia, which is also helping those two companies, Rothman notes.

In a positive light, Norwegian is aided by not having any cruise brands that do business in currencies other than the dollar. That means the relatively strong dollar affects it less than Carnival, with its Costa, Aida and P&O subsidiaries, or Royal Caribbean, which owns Spain’s Pullmantur and France’s CDF.

From that perspective, Norwegian’s recent acquisition of Prestige Cruise Holdings is ideal. The two Prestige brands, Regent Seven Seas Cruises and Oceania Cruises, both do business in U.S. dollars, so their results won’t be a drag because of currency exchange.

And as destination-oriented luxury lines, Oceania and Regent do relatively less sailing in the overcrowded Caribbean and have more itineraries in Asia, although neither is set up to source business there.

Rothman expects Norwegian to earn about $76 million in the fourth quarter and about $508 million for 2014. The company is building ships just about as fast as is practicable, which should help it diversify its itineraries further away from the Caribbean to areas like Brazil in the winter.

Norwegian has come a long way in a short time. Tuesday’s results may show it has further to go.

Norwegian Cruise Line snaps up Ocean Princess as part of fleet expansion

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Norwegian Cruise Line (NCL) has wasted no time in adding to the Oceania Cruises brand it recently acquired as part of its purchase of Prestige Cruises.

The firm has announced it has entered into a definitive agreement with Princes Cruises to buy Ocean Princess, a 684-passenger ship that will join the Oceania stable.

NCL will not take delivery of the vessel until March 2016, at which point it will undergo a $40 million (£25.4 million) refurbishment in Marseille before becoming the fourth ship sailing under the Oceania Cruises brand, joining Regatta, Nautica and Insignia.

The Ocean Princess is to be renamed Sirena and president and chief executive officer of NCL Kevin Sheehan said the deal ” provides measured capacity growth based on the proven platform of Oceania Cruises’ highly regarded mid-size ships”.

Customers will be able to book their place on Sirena for when it sets sail in April 2016 from March next year and NCL said the extensive refurbishment – set to take 35 days – will “elevate the ship to the Oceania Cruises’ standard of elegance”.

The firm will use the recent refurbishment of the Insignia as inspiration for the facelift and plans to incorporate Oceania’s two speciality restaurants – the Polo Grill and Toscana.

NCL has not yet released details of the routes and destinations and it has in mind for the Sirena, but with Oceania Cruises calling at over 330 points globally it is likely the ship will be well-travelled. President and chief operating officer at Oceania Cruises Kunal S Kamlani said the Sirena addition “opens up an entire array of new itinerary options”.

“The award-winning guest experience delivered on our ships, coupled with a collection of innovative itineraries that cater to new markets, will combine for an alluring siren song for both our current and future guests,” he remarked.

NCL confirmed the purchase of Prestige Cruises – the parent firm of Oceania Cruises and Regent Seven Seas Cruises – earlier this month. It is paying $3.025 billion for the company and the move means 22 ships – including the Sirena – will be under NCL’s control, with a further four due to be added over the next five years.

Travel agents seek details on Norwegian-Prestige merger

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By Tom Stieghorst
Norwegian EpicNorwegian Cruise Line moved up its regular Wednesday webinar by one day this week to address the agent implications of its $3 billion acquisition of Prestige Cruise Holdings.

Agents listening to the webinar asked Norwegian’s executive vice president, Andy Stuart, and Prestige President Kunal Kamlani about its effect on commissions, about how the loyalty programs will be handled and whether they will see a cheapening of Oceania Cruises and Regent Seven Seas Cruises to make the acquisition produce financial savings.

Both said several times that it will be “business as usual” for agents and consumers. “In our minds, it all starts with the clients,” Kamlani said.

On commissions, Kamlani said there are no plans in the next three months to change commissions for 2015. He said this is the traditional time of year to review agency agreements but that nothing should change because of the merger. “It is business as usual,” he reiterated.

The two executives said that how or whether to make Norwegian’s past guest loyalty benefits available to Oceania and Regent cruisers, and vice versa, was high on the list of things to consider but no decisions have been made.

Kamlani said in response to a question that he doesn’t expect to begin offering solo cruise rates after the merger. “We probably would never measure very well on that metric,” he said.

A question about merger savings hurting product quality at the Prestige brands drew a strong response from Kamlani.

“That travesty will not occur on any of our watches of anyone involved in this transaction. That’s as direct as I can be,” he said.