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Despite stalled growth in China, Brazil and Russia, a wave of newly middle-class travelers from the BRICs and beyond will start visiting international destinations in the coming decades — dwarfing the numbers we’ve seen thus far.
NCL CEO would like to see a less competitive cruise environment where there would be less discounting and everyone could raise pricing. Utopia isn’t lurking around the next corner.
Like online travel sites grappling with a glut of TV advertising in 2014, Norwegian Cruise Line CEO Kevin Sheehan laments the fact that his two larger rivals, Carnival and Royal Caribbean, are currently filling the airwaves with commercials.
NCL, Carnival Cruise Lines, Princess Cruises and Royal Caribbean are all running TV commercials now (embedded below).
“Royal Caribbean is a spot advertiser of the Olympics and Carnival is a national advertiser,” points out Stewart Chiron, a cruise expert.
“It is a very complex time with a lot of promotional activity,” Sheehan said during NCL’s fourth quarter and full-year earnings call.
He added that if the current environment were a little less competitive then that would be positive for NCL.
Sheehan noted that 13-ship Norwegian has to compete against “two great corporations,” namely the Carnival and Royal Caribbean.
“Everyone’s doing the same things,” Sheehan said, referring to TV advertising and discounting.
Sheehan said in the first quarter of 2014 NCL has adjusted pricing, where needed, including for its newest ship, the Norwegian Getaway, which began its first revenue cruises from Miami this month.
Sheehan doesn’t put it in these precise words, but he wishes the cruise industry would stop all of the current discounting that’s going on.
Sheehan said NCL and the cruise industry as a whole are still feeling the impact of recent “incidents” (i.e. Costa Concordia, Carnival Triumph and norovirus outbreaks), although he points out that NCL managed to beat earnings expectations in 2013, its first year as a public company.
Of the peak and all-important Wave season, Sheehan said at this point in the first quarter the industry is starting to see positive signs, and NCL is beginning to feel “better” about trends “as we go through each week now.”
One analyst opined that Norwegian has a “better” product than competitors, but asked when would NCL be able to take advantage of that?
Sheehan said NCL has been waiting to do that for several years, but adverse developments across the industry always intervene, and the cruise line becomes subject to the sway of competitors’ pricing.
Meanwhile, NCL saw an increase in guest onboard spending in 2013, although it hasn’t really raised prices, Sheehan said.
Sheehan said the line’s challenge will be to better communicate add-ons such as a $119 Ultimate Dining package for a 7-day sail in 2014.
Of course, cruisers will still be able to cruise like Norwegians with the complimentary dining options included in the fare.
Here are TV commercials from NCL, Carnival, Princess and Royal Caribbdean: