2016 Annual Report for Norwegian Cruiseline Holdings - 8
Diverse Selection of Premium Itineraries
We have expanded our already broad range of premium itineraries. Our fleet has a worldwide deployment, offering one to 180-day itineraries, including
destinations in Scandinavia, Russia, the Mediterranean, the Greek Isles, Alaska, Canada and New England, Asia, Tahiti and the South Pacific, Australia
and New Zealand, Africa, India, South America, the Panama Canal, and the Caribbean. We introduced a new destination, Harvest Caye, in November
2016. This destination in Southern Belize features Belize's only cruise ship pier, expansive seven acre white sand beach, 15,000 sq. ft. pool with swim
up bar, multiple dining options and a nature center with wildlife experiences plus adventure tours.
Strong Cash Flow
We believe our business model will generate a significant amount of cash flow with high revenue visibility. All three of our brands afford the ability to
pre-sell tickets, receive customer deposits and sell onboard activities in advance with long lead times ahead of sailing. In terms of newbuild capital
expenditures, the cash flow impact is mitigated by export credit financing for all newbuild ships expected to be delivered through 2025 to fund
approximately 80% of the contract price of each ship.
Highly Experienced Management Team
Our senior management team is comprised of executives with extensive experience in the cruise, travel, leisure and hospitality-related industries. Frank
J. Del Rio is our President and Chief Executive Officer of NCLH. He has been successful in leading the integration of Norwegian, Oceania Cruises and
Regent brands. Prior to this, he has been responsible for the financial and strategic development of Prestige. Mr. Del Rio founded Oceania Cruises in
October 2002 and played a vital role in the development of Renaissance Cruises from 1993 to 2001. Andrew Stuart is our President and Chief Executive
Officer of our Norwegian brand. Mr. Stuart joined Norwegian in 1988 and has held several Senior Management positions in Sales, Marketing and
Passenger Services during his tenure before becoming President and Chief Executive Officer. Robert Binder is our Vice Chairman for the Oceania
Cruises and Regent brands and President and Chief Executive Officer, Oceania Cruises brand and Jason M. Montague is our President and Chief
Executive Officer for the Regent brand. Mr. Binder and Mr. Montague were instrumental in launching Oceania Cruises in 2002 and are widely regarded
as its co-founders. Wendy Beck is our Executive Vice President and Chief Financial Officer. Ms. Beck has been with NCLH since 2010 and was
instrumental in consummation of the IPO. For more on our senior management, see "Executive Officers" below.
Our Business Strategies
We seek to attract vacationers to our products and services in several ways, including:
delivering an enhanced, value-added vacation experience to our guests relative to other vacation alternatives via our market-to-fill strategy;
creating diverse and unique itineraries in new and existing markets for our current and upcoming ships;
utilizing effective marketing and sales force initiatives; and
Our market-to-fill strategy, itinerary diversification, marketing and sales force initiatives and international expansion strategies contribute to driving
increased revenues for our fleet. Our market-to-fill strategy maintains pricing integrity by offering both the best price early in the booking cycle and
value-added promotions when necessary to mitigate the need to compromise on price.
Diversification of deployment is achieved by our destination management team which reviews deployments across the fleet, either repositioning ships to
new destinations or fine-tuning itineraries, with the goal of creating scarcity which, in turn, leads to higher pricing.
We also seek to increase demand through effective marketing campaigns across various channels such as branding campaigns on nationwide television
or targeted mail campaigns aimed at supporting seasonal deployments. Our sales forces are also drivers of demand, particularly in terms of educating
travel agents on our products and services in order for them to better sell to potential vacationers.
Lastly, our international expansion efforts are aimed at increasing brand awareness across the globe. We maintain numerous sales offices which support
sales and marketing efforts in various markets outside of North America including the United Kingdom, Europe, China, Australia, Brazil, India, Japan
and Singapore. We are also growing our deployment footprint by positioning our upcoming ship, Norwegian Joy, to sail year round voyages from China
in a product designed for Chinese guests.
Leveraging Scale to Suppress Costs
We continue to leverage the combined purchasing power of our three brands to reduce costs throughout the organization. This initiative is bolstered by
our Supply Chain and Logistics Management function which supports our three brands as well as our corporate and international offices.