2018 Annual Report for Norwegian Cruiseline Holdings - 11

Optimization of Deployment. We manage our ships' deployment to promote better breadth of itineraries and to offer sailings
further in advance.
Ship Refurbishments. We have invested in revitalizations to our ships which provides a product which we believe delivers higher
guest satisfaction and, in turn, higher pricing.
Measured Fleet Expansion
We have Norwegian Encore on order for delivery in the fall of 2019. This ship will be the largest in our fleet, reaching approximately
168,000 Gross Tons. With approximately 4,000 Berths, she will be similar in design to Norwegian Bliss, which was delivered in April 2018,
and will include additional innovative features. Project Leonardo consists of six ships on order for the Norwegian brand with expected
delivery dates through 2027, subject to certain conditions. Each of the six Project Leonardo ships are approximately 140,000 Gross Tons and
3,300 Berths. For the Regent brand, we have orders for two Explorer Class Ships, Seven Seas Splendor and an additional ship, to be
delivered in 2020 and 2023, respectively. Each of the Explorer Class Ships will be approximately 55,000 Gross Tons and 750 Berths. For the
Oceania Cruises brand, we have orders for two Allura Class Ships to be delivered in 2022 and 2025. Each of the Allura Class Ships will be
approximately 67,000 Gross Tons and 1,200 Berths.
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. We have obtained export credit financing which is expected to fund approximately 80% of the
contract price of each ship expected to be delivered through 2027, subject to certain conditions.
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 homebased 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 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. The international channel represents an underpenetrated channel of distribution and one that we have increased
focus on since 2015. Focus on this market accomplishes the dual objective of allowing us to grow our yields and capacity faster
than if we only focused on the North American market while also allowing us to diversify our risk. As part of this focus, we have
undertaken a three-pronged strategy of:
x
x
x

expanding the management, sales and marketing teams that oversee this area,
broadening our travel agency distribution to multiple partners in each region, and
expanding the geographic reach of our product by deploying our ships in areas that appeal to international guests and by
personalizing our product for their tastes.

As part of this strategy, we have opened offices in Sydney, Shanghai, Beijing, Hong Kong, Mumbai, Tokyo, Auckland and
Singapore and expanded or renovated our existing offices in Southampton, Sao Paulo and Wiesbaden.
For information regarding risks associated with our international operations, see Part I Item 1A-Risk Factors in this annual report on
Form 10-K, including the risk factor titled "Conducting business internationally may result in increased costs and risks."
Meetings, Incentives and Charters. This channel focuses on full ship charters as well as corporate meetings and incentive travel.
These sales often have very long lead times and can fill a significant portion of the ship's capacity, or even an entire sailing, in one
transaction. The acquisition of Sixthman in 2012, a company specializing in developing and delivering music-oriented charters,
opened up a new market for travel partners enabling travel partners to sell high-quality music experiences at sea to guests.

2018 Annual Report for Norwegian Cruiseline Holdings

Table of Contents for the Digital Edition of 2018 Annual Report for Norwegian Cruiseline Holdings