Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: I want to talk a little bit about cruise lines.
Speaker 2: Right now. Norwegian is embarking on its largest new build
Speaker 2: order in company history as it looks to surpass the competition.
Speaker 2: Over the past five years, the company's stock has lagged
Speaker 2: behind competitors Royal Caribbean and Carnival. The industry as a
Speaker 2: whole has seen demand rebound while costs continue to climb.
Speaker 2: Joining us now is Harry Summer, Norwegian Cruise Lines President
Speaker 2: and CEO. And Harry, we've been talking about cruises for
Speaker 2: the entire morning now because Carnival came out with better
Speaker 2: numbers and expected and yet it's stock also traded down.
Speaker 2: What do you think the problem is? Why isn't the
Speaker 2: market embracing you know, better numbers and newer product.
Speaker 1: Well, you know, I'm not, first off, nice to be
Speaker 1: here this morning. Thank you for having me. I'll see,
Speaker 1: I'm not really here to discuss Carnival's earnings. I think
Speaker 1: overall the cruise lines have had a tremendous up and
Speaker 1: stock us included. I think over the last three months
Speaker 1: of stock is up the most in the industry and
Speaker 1: we're very, very proud of that consumer demand is robust,
Speaker 1: the guests love the guests experience. It reflects a tremendous
Speaker 1: value and a much better experience than hotels and resorts.
Speaker 1: And our stock price has seen a run up in
Speaker 1: the last few months as a result of that.
Speaker 2: Well, I mean, the reason I ask about better results
Speaker 2: is I was just reading in a story that you
Speaker 2: make more money at Norwegian than any of your competitors
Speaker 2: in terms of the amount passengers spend on board, right,
Speaker 2: And that seems to be what investors want. That's what
Speaker 2: analysts are after. Plus you have higher end, newer ships
Speaker 2: coming out to court the luxury consumer. That also is
Speaker 2: what we read that people want. And yet your stock,
Speaker 2: even though you've had a great three months, has really
Speaker 2: underperformed over the longer term. So why aren't investors seeing
Speaker 2: these products and these results and rewarding you for them.
Speaker 1: Listen, we are super passionate about delivering a fantastic onboard
Speaker 1: guests ex experience, and I think the spending results you've
Speaker 1: talked about in terms of onboard revenue are reflection of
Speaker 1: the great experience our guests get on board the ship,
Speaker 1: that we give them things that they value and are
Speaker 1: willing to pay for, and we're very super excited about that. Listen,
Speaker 1: I can't talk about you know, I can't really talk
Speaker 1: to what happened six months ago or a year ago.
Speaker 1: I'm very happy with what our stocks performed the last
Speaker 1: three four or five months now again out performing all
Speaker 1: the other stocks in the industry. And our goal is
Speaker 1: to continue this run by delivering great experiences to our
Speaker 1: guests and great financial results of the investment community.
Speaker 3: Hey, there's certainly a lot more people going on cruises
Speaker 3: that maybe didn't in the past. I say, my parents
Speaker 3: are among them. They went on one of your luxury
Speaker 3: competitors who shall not be named on this program. Even so,
Speaker 3: this question is for them because they looked around and said, hey,
Speaker 3: everyone is our age or older. Everyone's in their sixties
Speaker 3: and older. And that's something you hear about cruise operators.
Speaker 3: What do you do to attract the younger generations? And
Speaker 3: if you can't, is it a problem down the line
Speaker 3: for this industry?
Speaker 1: You know, I think if you look at the industry,
Speaker 1: there's really a bifurcation. There are a series of luxury lines,
Speaker 1: perhaps like the ones that your parents went on. We
Speaker 1: have two luxury lines in our fleet, Oceanna Cruises, which
Speaker 1: is our entry luxury level product, and Region seven Seat Cruises,
Speaker 1: which is our ultra luxury product. It's true in that
Speaker 1: demographic these cruises are a little bit more expensive. We
Speaker 1: do tend to attract an oiler clientele, but we also
Speaker 1: have our contemporary brand, Norwegian Cruise Line, where a large
Speaker 1: percentage of our guests are forty and younger. We continue
Speaker 1: to develop amenities, entertainment activities on board the ship that
Speaker 1: are relevant to those people, and they're absolutely responding that.
Speaker 1: The demographic between thirty five and say forty five is
Speaker 1: our fastest growing demographic for that brand right now, and
Speaker 1: we continue to focus on that so that we can
Speaker 1: have a generation, a new generation of people that will
Speaker 1: cruise over and over and over again. The repeat rate
Speaker 1: of these guests are at all time highs. On any
Speaker 1: given ship, about forty five percent of our guests our
Speaker 1: repeat customers, which is one of the reasons we announced
Speaker 1: our Loyalty Match program this morning so people can go
Speaker 1: between lines and have a great experience, the experience that
Speaker 1: they deserve.
Speaker 2: You have the Oceania, that's the luxury brand that you
Speaker 2: that you operate a Lura. It's a new boat coming
Speaker 2: back from its maiden voyage. I think tomorrow. Yes, tell
Speaker 2: us what's different, what's new? What are you offering consumers
Speaker 2: that differentiates this boat from you know, other sort of luxury,
Speaker 2: high end big cruise lines.
Speaker 1: So at Oceana Cruizes, we're super passionate about delivering a
Speaker 1: fantastic guest experience in terms of luxury amenities on board
Speaker 1: the ship, large cabins and suites, fantastic staff on board,
Speaker 1: and a large staff to guest ratio, so guests feel
Speaker 1: like they're being pampered at every single moment. Of course,
Speaker 1: the bedrock of Oceanna Cruises is the finest cuisine at sea.
Speaker 1: We win every culinary award out there, and for this
Speaker 1: new ship, the Alura, we have uped the game even further.
Speaker 1: We've reintroduced a French restaurant concept, Jock, which is extremely
Speaker 1: popular with our guests. We have a new crapery which
Speaker 1: has f fantastic suites, freshly made all day long crapes,
Speaker 1: ice cream and things like that, and pastries, but I
Speaker 1: mean super high and not the normal fair you would
Speaker 1: get on a contemporary cruise line, and our guests are
Speaker 1: enthusiastic about it. We have new shopping on board. We
Speaker 1: have all different We have new experiences in the theater,
Speaker 1: all the things that our guests value.
Speaker 3: And Harry goes back to what Matt was saying that
Speaker 3: you have this great capture rate of getting guests to
Speaker 3: spend on the boat itself. But you're talking about some
Speaker 3: serious luxury offerings, as we were saying, things that are
Speaker 3: expensive that not everyday people can necessarily afford. You also
Speaker 3: have more mass premium type offerings too. How does the
Speaker 3: behavior differ between the more luxury offering and those more
Speaker 3: mass offerings that you're giving.
Speaker 1: You know, Traditionally, on the higher end brand that we
Speaker 1: have reach It, which is our ultra luxury, it is
Speaker 1: all inclusive by nature, so guests are getting you know,
Speaker 1: freeshore excursions, lots of free things, gratuities are included you know,
Speaker 1: on board, so they're not really paying that much extra
Speaker 1: on that brand. Norwegian is a little bit different. We
Speaker 1: do have some fantastic bundles that guests can buy into,
Speaker 1: like seventy percent off drinks packages that we're running right now,
Speaker 1: seventy percent off specially designing and things along those lines,
Speaker 1: so that guests can get a deal and enjoy luxury
Speaker 1: amenities on board our contemporary ship, but it tends to
Speaker 1: be a little bit more on the on board spin
Speaker 1: side than the ticket price on our contemporary brand.
Speaker 3: Hey Harry, this has been great. Thank you so much
Speaker 3: for joining us. Please come back again soon, Harry Summer
Speaker 3: of Norwegian Cruise Lines ahead of their maiden voyage of
Speaker 3: the Alora coming back to the US shores.