Interview Article - Del Rio's Shake Up Plans for NCL

[UPNYGuy]

I would love to see a return of the 10 day canada and New England sailing on the Gem that is r/t out of nyc and heads up to Quebec City.

[hondorner]

I would love to see a return of the 10 day canada and New England sailing on the Gem that is r/t out of nyc and heads up to Quebec City.

 

We sailed that route on Jewel in 2010. Great voyage, but we've been on that route twice now; wouldn't do it again.

[keeponcruising]

They are chomping at the bit to go to Cuba and I can't wait.

[UPNYGuy]

We sailed that route on Jewel in 2010. Great voyage, but we've been on that route twice now; wouldn't do it again.

 

 

Same here. We have done it several times, and will do it again ;). We have specific itineraries that we really enjoy (Alaska, Bermuda, Greek Isles, Canada /NE) that we have sailed multiple times. We go multiple times per year, so we aren't as picky with our destination.

[bangzoom6877]

I support that concept, also. I have no quarrel with those who want to spend more to satisfy their desires or egos.

 

I do have an issue with those who want me and others to pay for their extras.

 

I'm with you on this...I'd rather pay extra for certain services and items that tailor my vacation to my needs, rather than pay a hefty cruise fare for all of it and not use most of it. DH and I indulge in the weekly spa pass, and that is our one "luxury" on our cruise. FYI it's a desire of ours, it's not because of our egos. It's just to have a place to go and unwind and relax that we wouldn't do at home.

 

I also like the option of specialty restaurants, but we really enjoy the MDR as well. We eat dinner in the MDR most nights during our cruises, and I wouldn't want to pay a higher cruise fare just so everyone on the ship could have every specialty venue included in the cruise fare.

 

Tailor it to what you enjoy most, so it's the perfect vacation for you! Pay extra for as much or as little as you'd like. I've known people who have had very small bills at the end of their cruise because they hardly drink alcohol, eat only the included food, and enjoy the included activities, and do their own thing in port. To each their own, that's why there are so many options.

 

And I know it seems like NCL nickels and dimes more than other mass market cruise lines, but from what I've seen, they charge extra for the same exact things (bar drinks, certain exercise classes, specialty restaurants, excursions, casino, souvenirs, late nights at the kids' camp, etc.) and the prices are competitive with other mass market lines we and close relatives have sailed (Carnival, Royal Caribbean and Celebrity). I think it's just that NCL offers more options of these types than the other cruise lines, for example more restaurants.

 

As for longer itineraries, I would love to see a summer sailing out to NYC to the Western Caribbean. I'm not sure if NCL includes this itinerary as part of its longer winter cruises out of NYC, but we would go on this itinerary in the summer in a heartbeat. But DH and I are teachers, so we have the time to do this. Many people, my brother-in-law who sometimes vacations with us being one of them, cannot easily take off more than a week from work at a time, and some people can never take off more than a week.

 

It would be nice if NCL would alternate 6- and 8-night sailings out of NYC on the same ship though. In 2006 we went on an 8-night cruise on the Spirit, which sailed on a Saturday so it returned the following Sunday. We went to St. Thomas, Tortola and Bermuda. This itinerary alternated with a Sunday to Saturday 6-night sailing to the Bahamas. I would love to see something like this return, as both itineraries would accommodate people who cannot take more than one week at a time off from work.

Edited March 19, 2015 by bangzoom6877

[partigus]

I work for a large investment advisory firm...keep in mid "FDRs" statements were for wall street in this article. He very well may have phrased things differently for a group of travel professionals, or a groupp of Lattitudes members. Not changing the substance, but the vantage point. I wouldn't read too much into things at this point. A new CEO HAS to say what he is doing different. The Street DOES NOT allow him ti say "Shehan was great, I;m just going to carry on".

[bangzoom6877]

I work for a large investment advisory firm...keep in mid "FDRs" statements were for wall street in this article. He very well may have phrased things differently for a group of travel professionals, or a groupp of Lattitudes members. Not changing the substance, but the vantage point. I wouldn't read too much into things at this point. A new CEO HAS to say what he is doing different. The Street DOES NOT allow him ti say "Shehan was great, I;m just going to carry on".

 

That is a very good point. They have to say certain things. There's always a chance that the same or similar changes would have been put into place under the former CEO and that Del Rio is seeing that through. There is no guarantee that there wouldn't have been things like price increases, or added gratuity in specialty restaurants had Del Rio not taken over.

[UKLloyd]

What a great article! I took several things away from it on first reading:

 

1) Del Rio knows his stuff. Seriously, the man has been in the industry for a long time running several successful lines. He has been here long enough to know what works and what doesn't and that will serve NCL well. Nothing against Sheehan, as he was the man who brought NCL back from the dead, but the company has a legit cruise business executive at the helm for the first time in a long time and that can only mean good things.

 

2) As for the 7-night comment, what I got was those are fine, but you need to offer options. If you price out a 4 or 5 night cruise on other lines, you'll find comparable pricing at times to 7 nighters! Why? There is a huge demand for shorter cruises and NCL doesn't currently offer ANY 5 night Caribbean cruises at all, for example. This is an untapped market for them and honestly, you could offer a 7 night one week then a 4 night and 3 night or some odd combination even on the same ship the next week! This would be a solution for the argument that NCL doesn't have enough ships to sail shorter itens... just simply slip a few short cruises into the current ships' schedule on occasion!

 

3) Finally, on the point of getting more money out of passengers, that's his job. But I didn't read it that way, from what I read, I think we will continue to see amazing promotions (such as the current one) but the base rate may increase slightly. But because you are getting a beverage or dining package for free, you get better value for your money on Norwegian than other lines due to the level of choices on the bigger ships. If you think about it, this is probably already paying off because how many people booked an OV or above who may have booked an interior otherwise? They've already made more money off this booking than they would had originally.

 

If you read closely, you'll note that he mentioned current promotions and how bookings are up big time in February, expect to see this continue. If you read between the lines, it sounds like this promotion may have been the new management team's idea in the first place.

 

 

I agree with your point. I would normally go for a balcony only cabin, cheapest category. We just booked so we get the promo, and booked ouruselves into a spa balcony cabin. So very good point made. If i didn't have the UBP free, I would have picked my normal cheaper balcony cabin.

[eroller]

Unfortunately FDR's "shake-up" plans for NCL are not all fun and games. Many were handed their pink slips yesterday and there is another round today. I was informed the scene was pretty grim, as police and security were present as ex-employees were escorted out. Today is more of the same with lower ranking employees. Rumor is there will be even more rounds of terminations moving forward.

 

Unfortunately whenever you hear the corporate speak terminology of "combining synergies" and "rightsizing" it almost always means people losing jobs. Those left behind usually have more responsibility but no additional pay. It's also almost never a positive for the consumer, as the product almost always suffers in some way.

 

http://www.seatrade-insider.com/news/news-headlines/norwegian-cruise-line-holdings-trims-shoreside-workforce.html

Edited March 20, 2015 by eroller

[Cruisercl]

Unfortunately FDR's "shake-up" plans for NCL are not all fun and games. Many were handed their pink slips yesterday and there is another round today. I was informed the scene was pretty grim, as police and security were present as ex-employees were escorted out. Today is more of the same with lower ranking employees. Rumor is there will be even more rounds of terminations moving forward.

 

Unfortunately whenever you hear the corporate speak terminology of "combining synergies" and "rightsizing" it almost always means people losing jobs. Those left behind usually have more responsibility but no additional pay. It's also almost never a positive for the consumer, as the product almost always suffers in some way.

 

http://www.seatrade-insider.com/news/news-headlines/norwegian-cruise-line-holdings-trims-shoreside-workforce.html

 

'It's starting'.........that is awful. First the employees fall victim next are the loyal NCL customers. (MO)

 

I would be curious to find out how many Feb bookings were from previous NCL customers and how many were new. The loyal NCL customers booked because it was a great promotion; now that they are all booked for the next couple of years I wonder how many new customers they will have at the prices and the product NCL is becoming. :cool:

Edited March 20, 2015 by Cruisercl

[Dave85]

Very sorry for all the folks who lost their jobs today. That's really lousy. Unfortunately, that's the reality with these major corporate management shakeups... new guy (or gal, usually guy) comes in eager to slash costs to "improve the bottom line" and people lose their jobs. :( Hopefully all affected are able to land on their feet.

[swedish weave]

Very sorry for all the folks who lost their jobs today. That's really lousy. Unfortunately, that's the reality with these major corporate management shakeups... new guy (or gal, usually guy) comes in eager to slash costs to "improve the bottom line" and people lose their jobs. :( Hopefully all affected are able to land on their feet.

 

Of equal concern is the plight of NCL and the investors and shareholders !!

[sfaaa]

I recently have been getting emails from a new NCL PCC that I never dealt with before. Seeing this, I now wonder if it has anything to do with the restructuring and layoffs.

[Single Cruiser]

He resigned. Nobody is quite sure why.

 

Most probably because he refused to be involved with the board/owners plans to increase all these onboard costs (del Rio taxes) !!

[Dave85]

Of equal concern is the plight of NCL and the investors and shareholders !!

 

 

I'm not sure what you mean by the "plight of NCL." NCL seems to be doing quite well recently, building beautiful new ships with competitive amenities, attracting new customers, including from competitor brands, and decisively moving past prior negative stereotypes about the brand. I'm not terribly concerned about "the plight of NCL," although perhaps I'm missing something. I am neither an investor nor an NCL shareholder so I have no basis to comment on their perceived "plight."

[swedish weave]

I'm not sure what you mean by the "plight of NCL." NCL seems to be doing quite well recently, building beautiful new ships with competitive amenities, attracting new customers, including from competitor brands, and decisively moving past prior negative stereotypes about the brand. I'm not terribly concerned about "the plight of NCL," although perhaps I'm missing something. I am neither an investor nor an NCL shareholder so I have no basis to comment on their perceived "plight."

 

Since you are not invested nor a shareholder, you have no need to be concerned.

[Medtech2]

Very sorry for all the folks who lost their jobs today. That's really lousy. Unfortunately, that's the reality with these major corporate management shakeups... new guy (or gal, usually guy) comes in eager to slash costs to "improve the bottom line" and people lose their jobs. :( Hopefully all affected are able to land on their feet.

It's happening all over, including my hospital. People let go, the rest of us forced to take leave without pay, all while our CEO is reported in the local paper to be making 1.4 million. Unfortunately in my specialized position you can't just get a new job easily and stay in this area. Hopefully these folks not only find new jobs but in a place they want to live.

 

Meanwhile service will suffer. We joke it's only a matter of time before someone dies as a result of all the cuts...

 

I know a cruiseline isn't as urgent as medical care but it will still suffer. Airline customer service is deplorable. It took me two weeks of calling US Airways to get a live person to fix a problem.

 

Businesses don't seem to get the value of an intangible like good customer service. I can't talk to a dollar bill. It's not going to listen.

[sfaaa]

Apparently, the current round of layoffs are in the head office and admin dept area, not front line crews on ships. There may not be any immediate negative service impact to passengers. We'll see how this pan out.

Edited March 21, 2015 by sfaaa

[Cruisercl]

I'm not sure what you mean by the "plight of NCL." NCL seems to be doing quite well recently, building beautiful new ships with competitive amenities, attracting new customers, including from competitor brands, and decisively moving past prior negative stereotypes about the brand. I'm not terribly concerned about "the plight of NCL," although perhaps I'm missing something. I am neither an investor nor an NCL shareholder so I have no basis to comment on their perceived "plight."

 

Pretty much any business success that is going on now with NCL is a result of the previous leadership/management. The impact of the new regime will take some time to show; that's pretty much how it works in the corporate world. Just my experience.

[sparks1093]

Pretty much any business success that is going on now with NCL is a result of the previous leadership/management. The impact of the new regime will take some time to show; that's pretty much how it works in the corporate world. Just my experience.

 

From what I am reading in other threads the impact is immediate and negative in regard to the changes that have been made thus far.

[sjbdtz]

From what I am reading in other threads the impact is immediate and negative in regard to the changes that have been made thus far.

 

I agree. People who were deeply involved with the Sheehan regime (Gladding, Matthews, etc.) gone.

 

I'm a little concerned about the future of NCL...

 

 

 

On the other hand... in Big Money on the High Seas, Andy Stuart says (approximately) "we all have ways (secret?) of making our money".... which alluded to surcharges, and promos, etc.

 

With FDR's comments about "price cutting is not the only way to differentiate", there's perhaps a small upscaling on its way.

 

Think Freestyle 3.0 again - champagne welcome-aboard, etc.... for an extra $50 / week + higher DSC.

 

 

The higher DSC enables them to pay higher wages to the crew, which enables them to lure the top talent from other lines, and to recruit best-in-class crew to provide up-scaled service.

 

I just don't want obsequiousness to enter into the service protocol... I love the family feeling of NCL, and hope he doesn't screw that up.

 

 

Stephen

 

 

.

[ohioNCLcruiser]

I agree. People who were deeply involved with the Sheehan regime (Gladding, Matthews, etc.) gone.

 

I'm a little concerned about the future of NCL...

 

NCL should have never let Susan Robinson leave in the first place which lead to Matthews getting that position.

 

Think Freestyle 3.0 again - champagne welcome-aboard, etc.... for an extra $50 / week + higher DSC..

 

Hopefully it goes better than 2.0 since Andy and Klaus were about the only people to survive the Freestyle 2.0 idea.

 

The higher DSC enables them to pay higher wages to the crew, which enables them to lure the top talent from other lines, and to recruit best-in-class crew to provide up-scaled service.

NCL already offers some perks to their crew to bring them over, this DSC increase won't really make any difference. Carnival doesn't cover plane tickets where NCL does.

Edited March 21, 2015 by ohioNCLcruiser

[abbyar]

Since you are not invested nor a shareholder, you have no need to be concerned.

 

I'm a shareholder, and although I don't know about their employee costs, I prefer they have more staff aboard ships to increase service than in offices. This increases my service onboard, and improves the experience both for me and my fellow cruisers.

 

I've worked for enough companies to know that some run lean, some run fat, and it's FDRs responsibility to understand which and make appropriate changes. I've worked at many places where additional heads are added not bc there's additional work, but bc some people don't pull their weight.

 

Considering the stock has popped 10% in the last week or so (enough to cover my 2016 cruise) I'm a happy camper.

[tvguy72]

I think most of you are missing the bigger picture on FDR. He is just a corporate figure. He has a history of working with a minimal staff as quoted in Seatrade "he likes to run lean". Whereas KS was top heavy with employees.

 

Remember they have shareholders to keep happy, That's just business!. The company spent a few billion in the past few years with newbuilds, refurbs and the recent acquisition of Prestige Cruises International(where Del Rio came from).

 

This leaves NCLH in a cash poor situation. Shareholders do not like that. I believe KS was forced out due to his over spending. FDR IMHO will not be in his position long. His business model may fir smaller luxury lines. However, it may not fit a mainstream line like NCL.

 

Too many key personnel has been let go. Lets see what plays out today when round two starts. DING, DING!!!!

 

The only bright star I see on the horizon was the promotion of Andy Stuart.

He has been with the line for over 20 years. He will replace Del Rio within a year. If he survives FDR's layoff frenzy.

[mking8288]

Perhaps, on an unrelated note - our CCL holdings are also doing very nicely - and shareholder OBC can be combined & used alongside ... NCLH has a nice run, we might just cash in while the "gains" are good.

 

Vibrations to the front line officers & crews from ihis week's housecleaning is going to be felt and it might seen as a good thing, but it's important to maintain positive energy & morale among the "troops" - those warm & fuzzy feelings translate into solid customer services in the delivery of the cruise experience - call it Free Style 3.1A if you would, taking it upscale is great but these are mega-ships in the shipyard now. Getting out of those ports & away from the milk run is easy to say ... the competitions are watching closely and if NCLH squeeze & tumbled a # of steps, both Wall Street & Main Street are not going to be kind, for a company in a cash poor position to pull itself out of the troubled water.

 

We are looking ahead to cruise other parts of the world, and I don't see NCLH or Gentlings (Apollo ??) offering anything for us in Asia, aside from casino runs & we have no interest going back to the old NCL "Sea" sold & rebranded by Star Cruises after drydocking.