FORT LAUDERDALE — Norwegian Cruise Line is doubling down on its free promotions, giving its guests free air for some cruises the way sister company Oceania Cruises has been doing for years.
“It’s a continuation, an evolution, an expansion of the Free at Sea program,” said Frank Del Rio, CEO of parent company Norwegian Cruise Line Holdings, who addressed travel agents here at CruiseWorld.
“It was triggered by my experience at Oceania and Regent [Seven Seas Cruises]. Everyone likes free stuff. I love to tell people: I like to sell you anything I can sell for free,” he said.
Del Rio said the beauty of bundling free items into the overall cruise fare is that it works for everyone.
“As far as travel agents, they recognize the value, the see they’re now earning commissions not just on the cruise fare but on a bundled product that includes shore excursions, includes air fare, includes beverage packages. The consumer sees exactly what it is going to cost them. And the cruise line benefits, [because] we are able to raise prices over time.”
Onstage interviewer Arnie Weissmann, the editor in chief of Travel Weekly, asked Del Rio about next summer in Alaska, when Norwegian will sail both the Norwegian Joy and the Norwegian Bliss from Seattle. Del Rio said there’s plenty of room for both 4,200-passenger ships and the Norwegian Jewel as well.
“Alaska is hot,” Del Rio said. “It’s cool, but it’s hot. From a cruise line perspective, it’s a big money maker. There’s a lot of demand compressed into a short period of time. Onboard revenue is a big contributor, one of the reasons we all go to Alaska. People buy shore excursions. It’s multigenerational.
“It’s really, really good. I just wish the season was longer,” he added.
Del Rio was also enthused about Cuba, where Norwegian, along with the rest of the industry, started sailing two years ago.
“From a business perspective, Cuba’s been a home run,” he said. “The pent-up demand to go to Cuba has not abated. Because of the new regulations, going by cruise ship is the easiest, fastest way to go. Cuba continues to outperform any other destination in the Caribbean, partly, again, because of the newness of it.”
But Del Rio said that because of the limited pier length in Havana, it will be at least five years before bigger ships can dock there.
He dismissed concerns that the industry’s record order book of new ships will lead to overcapacity. He said that low-interest rates, the strong dollar against the euro and ready export financing make it a no-brainer.
“This is an industry that sails full every single week. Less than 4% of the target market around the world has ever cruised before,” Del Rio said. “You’d be a fool not to order new ships. We’ve been talking about oversupply since the Nina, the Pinta and the Santa Maria sailed, and that’s long enough.”
Del Rio conceded that in the short term, the industry sometimes over-concentrates its ships in certain hot geographic areas.
“Over the long term the industry does a very, very good job of deploying vessels where demand is,” he said. “There may be short term slips, displacements if you will. Over the long term, ships wind up where they belong.”
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