2016 Annual Report for Norwegian Cruiseline Holdings - 9
Enhanced Product Offerings and Guest Experience
Norwegian's ships offer up to 28 dining options, a diverse range of accommodations and what we believe is the widest array of entertainment at sea.
Oceania Cruises' award-winning onboard dining, with multiple open seating dining venues, is a central highlight of its cruise experience. Regent's allinclusive offering includes air transportation, shore excursions, hotel packages, specialty restaurants, premium spirits and fine wines, gratuities, wi-fi and
We focus on growing revenue through various initiatives aimed at increasing ticket prices and Occupancy Percentages as well as onboard spending to
drive higher overall revenue. Our specific initiatives include:
Strategic Relationships. We have strategic relationships with travel agencies and tour operators who commit to purchasing a certain level of
inventory with long lead times.
Meetings, Incentives and Charters. We maintain our focus on the meetings, incentives and charters channel, which typically books very far
in advance and can represent a significant portion of the ship, or even an entire sailing, in one transaction.
Promotional Strategy. With our Norwegian brand, we utilize a more inclusive product offering on certain sailings and in certain cabin
selections which provides guests a choice of one to five onboard amenities.
Casino Player Strategy. We have non-exclusive arrangements with over 100 casino partners worldwide whereby loyal gaming guests are
offered cruise reward certificates redeemable for cruises. Through property sponsored events and joint marketing programs, we have the
opportunity to market cruises to these guests. These arrangements with casino partners have the dual benefit of filling open inventory and
reaching guests expected to generate above average onboard revenue through the casino and other onboard spending.
Optimization of Deployment. We manage our ships' deployment to promote better breadth of itineraries and to offer sailings further in
Disciplined Fleet Expansion
We have Norwegian Joy, Norwegian Bliss and one additional Breakaway Plus Class Ship on order for delivery in the spring of 2017, spring of 2018 and
the fall of 2019, respectively. These ships will be the largest in our fleet, each reaching approximately 164,600 Gross Tons. With approximately 3,770 to
4,000 Berths each, they will be similar in design to our first Breakaway Plus Class Ship, Norwegian Escape, which was delivered in October 2015 and
will include additional innovative features. We also have a contract to build a second Explorer Class Ship to be delivered in the winter of 2020. Project
Leonardo consists of four ships on order with expected delivery dates through 2025 with an option for two additional ships for delivery in 2026 and
2027, subject to certain conditions. These four ships are each 140,000 gross tons with approximately 3,300 Berths. We have obtained export credit
financing for the ships to fund approximately 80% of the contract price of each ship expected to be delivered through 2025, subject to certain conditions.
We believe these new ships will allow us to continue expanding the reach of our brands, positioning us for accelerated growth and providing an
optimized return on invested capital.
Expand and Strengthen Our Product Distribution Channels
As part of our growth strategy, we continually look for ways to deepen and expand our sales channels. We continue to invest in our brands by enhancing
websites and passenger services departments through which travel agents and guests have the ability to book cruise vacations.
We focus on distribution through our three primary channels: "Retail/Travel Agent," "International," and "Meetings, Incentives and Charters."
Retail/Travel Agent. The retail/travel agent channel represents the majority of our ticket sales. Our travel partner base is comprised of an
extensive network of approximately 23,000 independent travel agencies including brick and mortar, internet-based and home-based operators
located in North America, South America, Europe, Africa, Asia and Australia. We have made substantial investments with improvements in
booking technologies, transparent pricing strategies, effective marketing tools, improved communication and cooperative marketing
initiatives. We have expanded sales force teams who work closely with our travel agency partners on maximizing their marketing and sales
effectiveness across all three of our brands. Our focused account management is designed to create solutions catered to the individual retailer
through product and sales training. This education creates a deeper understanding of all our offerings.
International. We continue to accelerate our international expansion efforts, building on initiatives rolled out in 2015 that focused on
increasing our presence in the fast growing Asia Pacific region. We announced the re-deployment of Norwegian Star and later Norwegian
Jewel to the Australasia region, along with the opening of our sales office in Sydney, Australia which services the growing demand from the
Asia Pacific region for cruises across our three brands.