Norwegian Cruise Line embarks on its next chapter

MIAMI – Just a year ago, as the company Frank Del Rio ran was being acquired by Miami-based Norwegian Cruise Line Holdings in a $3 billion deal, the cruise industry veteran sounded uncertain about his future.

He had committed to overseeing the high-end Oceania and Regent Seven Seas brands, post-merger, through the end of this year. Del Rio made reference to his age — he was about to turn 60 — and said he was looking forward to working with the new team for a short while.

"I feel like we've run the gamut; there isn't a whole lot more to do," he said at the time.

It turned out there was plenty for Del Rio — now president and CEO of Norwegian Cruise Line Holdings — to do.

On Monday, Del Rio planned to preside over the christening of the company's newest ship, the 4,248-passenger Norwegian Escape in Miami. Next year, he will usher in new or new-to-company vessels for the luxury Regent and upscale Oceania brands.

The role was not one he expected. In January, after former parent company CEO Kevin Sheehan resigned abruptly for reasons that were never publicly disclosed, Del Rio was named to the top job. Overseeing Norwegian Cruise Line is Andy Stuart, a longtime employee of the line who was previously executive vice president of sales; Jason Montague, who helped launch Oceania with Del Rio, is president of Prestige Cruise ­Holdings, which includes Oceania and Regent.

Ship inspections, upgrades and careful attention to detail are key to changes in store for Norwegian Cruise Line as Del Rio and his team push to improve the passenger experience on the operator's 14-ship fleet.

"We're focused on growing the top line, growing the yields both in ticket pricing and in onboard," he said. "You have to spend a little money on some areas to be able to facilitate the onboard experience. Perhaps there was some underspending in prior years that we're playing some catch-up on."

While more than 16,000 new berths are coming online for Norwegian by 2019, the company is devoting significant resources to its older, midsize tonnage. By 2017, all but one of the line's older ships will have been taken out of service and refurbished.

Oceania and Regent are expecting 2016 to be a big year, with new tonnage joining each fleet.

Regent will welcome its first new ship since 2003, the 750-passenger Seven Seas Explorer. Billed as "the most luxurious ship ever built," the vessel boasts a 3,875-square-foot suite that includes an in-room spa area and unlimited treatments.

The three existing ships in the brand — Navigator, Mariner and Voyager — will all be refurbished over the next 18 months. Oceania Cruises, considered an upper premium brand, will grow from five to six ships next year.

The brand's newest ships, the 1,250-passenger Marina and Riviera, debuted in 2011 and 2012.

Del Rio, who co-founded Oceania in 2003, said he is happy with the two lines that he brought to Norwegian.

"We're not the largest brand out there, but I like to think of it this way: that the three brands within the Norwegian Cruise Line Holdings company are the leading brand in each of the market segments that they compete in."

On Norwegian Cruise Line, the brand Del Rio inherited, dining is a key area targeted for improvement. The line has traditionally been known more for its variety of choices (28 dining options on Norwegian Escape) than excellence of cuisine. Oceania, which has a reputation as a foodie cruise line, has been lending culinary expertise to the sister brand.

Carolyn Spencer Brown, editor in chief of the site CruiseCritic.com, said better food could bump the cruise line, and its fares, up a notch.

"I think it's going to actually uplift the line into a new competitive category if they follow through properly on the pledge to improve the cuisine," she said. "So instead of competing with Royal Caribbean and Carnival, you're going to see it reaching out to Holland America or Princess or ­Celebrity."

While Norwegian has been picking up culinary tips from the Oceania team, Montague said the larger line has ­provided some expertise for the high-end brands he ­oversees.

"Norwegian excels at entertainment; they have an entire in-house operation," he said. "We outsourced a lot of our entertainment product. We've been able to leverage them. We just launched four new shows on the Oceania brand."

The humdrum aspects of integration — automated accounting systems, information technology, logistics and support services — have been completed, Del Rio said.

And he said more difficult moves, including reducing the workforce, are also in the past. In March, an unspecified number of staffers were laid off; sources said at the time that about 200 people lost their jobs, but the company did not confirm that figure.

Stuart said Del Rio is ­decisive as a chief executive.

"He's vehemently against committees and meetings and spending a lot of time debating things," he said. "He's into making decisions and moving the business forward and being a nimble business that isn't mired in bureaucracy."

Mike Driscoll, editor of the trade publication Cruise Week, said Del Rio's long history in the cruise industry is serving him — and the ­company — well.

"He has taken a lot of the learnings he's had in the business over 30 years and applied them to Norwegian in a way that was lacking before," he said.

Many industry observers feared that the Prestige brands might suffer if Del Rio leaves the company, but Driscoll said that concern has disappeared.

"With his background at Regent and Oceania, he's making sure they don't get pushed aside — which was a concern, being part of the bigger company," Driscoll said.