CONF CALL
Frank Del Rio (President/CEO)
- Synergies will be done by end of Q3 2015
- Sold Oceania to Apollo for $475M
- Norwegian brand
- Four 4,200 berth newbuilds on order (Q4 2015, Q2 2017, Q2 2018, Q4 2019)
- 2018: Breakaway Plus 3 (possibly targeting China)
- 2019: Breakaway Plus 4 (possibly targeting China)
- Average age is 51
- Kids comprise ~12% of passengers
- Oceania: new R-Class ship by 2Q 2016
- Average age: 67
- Cater to retired/semi-retired seasoned travelers
- Very high repeat customers
- Regent Seven Seas
- Explorer to arrive in mid-2016
- Most inclusive luxury experience
- All-suite staterooms, 97% with baloncies
- High net worth guests comprise 50%+ of volume
- Average age: 68
- Oceania: between premium and luxury segments
- NCLH: has no internal competition within each brand segment (premium, luxury, contemporary) as opposed to RCL and CCL
- Oceania/Regent: Destination is key
- Cost per berth
- Breakaway class: ~$215k
- Sirena: ~$180k
- O-Class Oceania: ~$525k (richer cabin mix on O-class)
- Seven Seas Explorer: ~$600k
- Jason Montague/Drew Madsen as brand Presidents: primarily responsible for driving occupancy
- Revenue mgmt department: focused solely on pricing
- Oceania/Regent: have highest per diem in their respective brand segments
- Cost Synergies in 2015: $25m in the bag
- $10.4m in consolidation of office operations
- Revenue Enhancement opportunities
- Optimize itineraries
- Shore excursion sales
- Ticket Price - Deal vs Price marketing message
- Selling the deal (value) rather than low price
- Leveraging relationships with Travel Partners catering to affluent travelers (occupancy)
- Cross-utilization of past guest database (occupancy)
- Best Practices: maximization of Norwegian's upscale offerings
- Pride of America
- The Haven by Norwegian
- Cost reduction opportunities
- Sharing of best practices/economics of scale
- Cost of delivering product
- Further rationalization of overhead
- Foster culture of cost consciousness
- 'FDR's' New Deal
- Flawless execution of strategy in place
- Potential of Asia and other new international source markets
- Drive higher per diems to delivers higher yields
- Weaving in the Prestige Go to Market Strategy
- Leverage scale to suppress costs
- Prestige: carries 200k passengers/yr; 50% past guest participation on a database of 300k past guest households
- Norwegian: carries 2.1m passengers/yr; 35% past guest participation on a database of 3.7 million past guest households
- 'Low hanging fruit' with taking advantage of past guest databases across brands
- Annualized contribution for Norwegian newbuild: $100m
- Incremental increase in Norwegian ticket pricing growth necessary to achieve equivalent of newbuild net income: ~3.0% to 4.0%
- Norwegian waiting for China to mature and waiting to replenish the Norwegian fleet to rightful capacity
- China:
- Looking for China partner
- Go/No Go decision by Spring 2016
- Targeting additional $10m for marketing for Wave Season 2015
- Prestige: usually 65-75% sold for following year
- Regent per diem: $700
- Introduced pre-cruise hotel stay in 2011 which raised pricing
- 2009-2014 CAGR: +6.8% net ticket yields
- Top source markets:
- Oceania:
- US: 64.7%
- Canada: 14%
- UK: 6.2%
- Australia: 4.0%
- Regent:
- US: 67.5%
- UK: 11.6%
- Canada: 7.4%
- Australia: 3.7%
- Norwegian
- US: 73.9%
- Canada: 7.1%
- UK: 4.2%
- Germany: 2.2%
- Norwegian sources 8% in California (vs other brands sourcing 25% in Cali) - sees opportunity there
- On March 1, 2015, NCLH will raise bar list by 6.6%, which will generate $10m in onboard revenue with no cost implications
- More onboard opportunities in medical center. (Norwegian brand loses money in medical center. Want to get to break even)
Drew Madsen (President/ COO)
- The Haven: Oceania/Regent cross-marketing opportunity
- Pride of America: highest yielding ship with strong double digit premium to core fleet
- Dry dock schedule 2015:
- Norwegian Star (March)
- Norwegian Gem (September)
- Norwegian Epic (October)
- Norwegian Escape (Nov 2015): largest Haven complex in fleet