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

[david_sobe]

The title of this thread is wrong. It should not be Del Rio's plan to shake up NCL. It should be Del Rio's plan to shake down future cruisers :eek:

[NLH Arizona]

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."

 

I feel the same. I added NCL into my cruise mix, along with Crystal and Celebrity, because of all the positive things I had read and heard (from my neighbors) about them and have been very satisfied with the product (I'm now Platinum). I don't have stock in NCL (wish I did), just a plain regular customer.

 

Having been in management for many years, I understand shake ups. For all we know, NCL was working with too high a number personnel; it seems that over time many companies keep adding staff and adding staff, until someone new comes in and looks at the figures and does a widespread layoff, which gets the numbers to where they should be. Or they want to bring in their own people who think like they do. In the company I worked for we had massive layoffs in 1980, because we had gotten way too big and our business couldn't support all the personnel, we all adjusted and it still ran like a well oiled machine even with all the layoffs.

 

As to Mr. Del Rio (I know nothing of him and never heard his name until this change), he has one task that he is saddled with. That is to increase NCL's revenue, which in turn keeps the stock high or raising and keeps the shareholders happy. There has already been the layoffs and now he could simply raise the fares up to include the figure they want their revenue to increase by or he can raise items on the ships, like drinks, specialty restaurants, pictures, shore excursions, for fee activities, etc. I would rather him do the latter, because I understand that some folks and families have to save for a long time just to go on a cruise and I would not want to raise the base fares because of them or because NCL might price themselves out for some folks. By raising the price of items, if one doesn't want to purchase them, then they don't have to. There is enough free food, non-alcohol drinks, activities, etc., onboard where one doesn't have to spend another dime if they don't want to.

 

Time will tell, if what they are doing with the layoffs, price increases, etc. was the right or wrong thing to do. But as long as they keep their ships full and their shareholders happy, they will have achieved their goal.

[tvguy72]

I feel the same. I added NCL into my cruise mix, along with Crystal and Celebrity, because of all the positive things I had read and heard (from my neighbors) about them and have been very satisfied with the product (I'm now Platinum). I don't have stock in NCL (wish I did), just a plain regular customer.

 

Having been in management for many years, I understand shake ups. For all we know, NCL was working with too high a number personnel; it seems that over time many companies keep adding staff and adding staff, until someone new comes in and looks at the figures and does a widespread layoff, which gets the numbers to where they should be. Or they want to bring in their own people who think like they do. In the company I worked for we had massive layoffs in 1980, because we had gotten way too big and our business couldn't support all the personnel, we all adjusted and it still ran like a well oiled machine even with all the layoffs.

 

 

As to Mr. Del Rio (I know nothing of him and never heard his name until this change), he has one task that he is saddled with. That is to increase NCL's revenue, which in turn keeps the stock high or raising and keeps the shareholders happy. There has already been the layoffs and now he could simply raise the fares up to include the figure they want their revenue to increase by or he can raise items on the ships, like drinks, specialty restaurants, pictures, shore excursions, for fee activities, etc. I would rather him do the latter, because I understand that some folks and families have to save for a long time just to go on a cruise and I would not want to raise the base fares because of them or because NCL might price themselves out for some folks. By raising the price of items, if one doesn't want to purchase them, then they don't have to. There is enough free food, non-alcohol drinks, activities, etc., onboard where one doesn't have to spend another dime if they don't want to.

 

Time will tell, if what they are doing with the layoffs, price increases, etc. was the right or wrong thing to do. But as long as they keep their ships full and their shareholders happy, they will have achieved their goal.

 

Well said, great post...

[swedish weave]

SEC filing yesterday from NCLH.

 

On March 19, 2015, Maria Miller, Senior Vice President of Marketing, resigned as Senior Vice President of Marketing and from all other positions and offices with Norwegian Cruise Line Holdings Ltd. (the "Company") and its subsidiaries or affiliates, effective immediately.

[KW_Cruisers]

Okay - you're shaking it up alright.

 

Now that the staff and crew are expected to do more for less, the customers can also expect to pay more for less.

 

That might get the stock doubled again in 3 years if economy stays really strong and nobody notices that service is slipping, while prices are rising.

 

Guess the smart move is to buy NCLH stock & book cruises on Princess, where they still offer OBC for veterans and have self-service laundries for cruisers & offer both anytime dining or traditional dining times + activities without an added charge.

 

Go guys - shake it up !!!:eek:

[eroller]

 

Time will tell, if what they are doing with the layoffs, price increases, etc. was the right or wrong thing to do. But as long as they keep their ships full and their shareholders happy, they will have achieved their goal.

 

 

Sorry I don't agree. I've been reading a lot of similar comments about keeping the shareholders happy and making them money. I'm not an NCLH investor and frankly I couldn't care less if the the shareholders are happy. I am a customer, and I think the primary goal should be keeping me and other CUSTOMERS happy! If we are not happy, no one will be. As for keeping ships full, that is easy. Lower the price enough and you can fill anything. Just look at Carnival. They are the price leader and pretty much sell on price alone. They have essentially become a commodity where price is the driving factor of sales. The real key is yields. Winning over customers to where the product is so fantastic and holds such value they are willing to pay more. That is much more difficult than just filling ships. Disney Cruise Line is a great example. They sail full but at very high yields. Yields that lines like NCL and Carnival could only dream of. I think NCL has the potential to garner higher yields, especially with their new ships, but there has to be something in return. Finding that balance is the challenge.

 

As for the layoffs, yes it happens all the time in corporate America. Is it right or should we just blow it off so easily just because it's the "norm"? Probably not. In many cases it's really good and talented people losing their jobs. I hate to see anyone lose their job as it is not easy finding a new one especially at the same level. Frankly I'm very tired of the corporate America mantra of CEO's making 400+ times the average worker and the average worker and middle management being expendable. Of course that is another topic entirely.

Edited March 21, 2015 by eroller

[swedish weave]

The questions I would ask myself if considering NCLH as an investment are ---Why are Genting and TPG backing away? Why are so many top executives leaving ? Can NCLH handle the massive debt that they have accrued recently ?

 

The link below sheds some light on the recent activities and may be of interest to some of you. Particularly the second page showing the disclaimers of forward statements.

 

http://www.thestreet.com/story/13069624/2/norwegian-cruise-line-announces-launch-of-secondary-public-offering-by-selling-shareholders.html

[hypercafe]

As far as layoffs it really is hard to comment as some company's really do get bloated. As for the company they really do not want to be stuck in a position as a commodity in the cruise business. Their fares are low so they make money by really filling the ships. Look how they changed the Dawn and how crowded the Breakaway is. The service and food in the included dinning rooms is poor. When I was on the Breakway one night the famous carving station in the buffet had meatloaf, give me a break. To get a seat outside on the big ships you have to buy a pass. To have a really great trip you must go with the Haven, first class in the old days. Maybe they should raise prices and provide a really great trip with good to great included food and less dense ships or lower the price, have two class ships with everything all a cart. Now they are stuck in the middle. We have not sailed them in some time however we have trip booked on the Gem for October because is easy, right in NY. I have low expectations however it was cheap. I would be happy to pay more for a regular room and get a better trip.

 

 

Sent from my SM-T320 using Forums mobile app

[sfaaa]

There is nothing wrong with NCL aiming at the mid market crowd looking for an affordable cruise. Many people do not want to pay more for extras they neither need nor care on a cruise. Keep the price and op cost low, keep the ship full and keep the profit coming is a great business model and strategy if the market is supportive of such a product.

[bangzoom6877]

There is nothing wrong with NCL aiming at the mid market crowd looking for an affordable cruise. Many people do not want to pay more for extras they neither need nor care on a cruise. Keep the price and op cost low, keep the ship full and keep the profit coming is a great business model and strategy if the market is supportive of such a product.

 

Well said! Plenty of people still go on NCL and do not eat in specialty restaurants, do not drink much alcohol or sometimes drink none, do not pay extra for activities that cost extra like the spa or a quieter "beach club" with more limited passes. Just ask anyone who fights to get a lounge chair by the pool and a table in the MDR at dinner without a wait during peak times, or a table by the buffet...still plenty of people utilizing the included options.