Can Norwegian Right the Ship?
The third largest cruise operator thinks it can right the ship by charging more for less. Norwegian Cruise Holdings has increased customer prices while cutting back jobs and services in an effort to stay afloat as its stock price remains…
The third largest cruise operator thinks it can right the ship by charging more for less.
Norwegian Cruise Holdings has increased customer prices while cutting back jobs and services in an effort to stay afloat as its stock price remains submerged, The Wall Street Journal reported Thursday.
Don’t Call It a Comeback
After the pandemic sent the cruise industry into rough financial and reputational seas, it’s been starting to glimpse more blue skies and glassy waters. Norwegian completed its “Great Cruise Comeback” last May after relaunching its 17th and final ship, but even with all that enthusiasm, investors are only concerned that its share price is down 75% compared to pre-pandemic levels.
To please shareholders, Norwegian has begun implementing a handful of cost-cutting measures as well as markups:
- At the start of 2023, Norwegian increased its daily gratuity for the second time in less than a year. Those staying in the premium Haven suites would have to pay an extra $25 per person, per day. In the Balcony Cabins and standard units, it’s now $20. Open bar packages have also increased in price.
- In December, the cruise line cut 9% of its shoreside staff as well as some on-board positions like housekeepers. Only a few weeks later in January, Norwegian announced it was canceling its production of the musical Kinky Boots on board the Encore cruise liner, notifying actors and stagehands that their contracts had been terminated.
Where’s the Beef? According to a UBS analyst note earlier this month, Norwegian is also scaling down its burger sizes from 9 ounces to 7. One could argue even that’s too much ground beef as the quarter pounder is the culinary standard. On top of that, don’t expect a clean room each day as Norwegian has limited turndown service for non-premium cabins. So you better get used to making your own bed on vacation. If your friends can see you now they may choose to fly instead.