Has Norwegian Cruise Line made its new ships too small? CEO hinted at an answer

To be Norwegian Cruise LineNew Prima class ship too small?

Norwegian executives suggested just as much on Tuesday during a conference call in which they announced a major change to the design of future ships in the series.

Norwegian Cruise Line Holdings chairman and CEO Frank Del Rio told Wall Street analysts on the call that the third and fourth ships in a series of six ships will be about 10% larger than the two. first in the series.

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He said the fifth and sixth ships in the series will be about 20% larger.

Norwegian Cruise Line Holdings is the parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruise.

In making the announcement, Del Rio said the larger size was needed in part to accommodate larger fuel tanks that could carry more of the eco-friendly fuel.

But shortly after Del Rio spoke, the head of the company’s Norwegian subsidiary Cruise Line, Harry Sommer, suggested that efforts to achieve better economies of scale with ships were also part of it. important in a larger development move with ships.

The first ship in the series, the Norwegian Prima, Released in August 2022. The second ship in the series, the Norwegian Viva, will begin sailing later this year.

“We’re really excited about Prima’s performance,” Sommer said on the call. He noted that the ship was “out of the gate as our most booked ship, [with] large volume, great turnover on board and most importantly, high guest satisfaction scores.”

However, he also said, “When we look at the platform that’s currently up and running, we think we can deliver a great guest experience.” [and] great financial performance and achieve slightly better economies of scale by driving slightly larger ships.”

Sommer suggests that the 10% increase in the size of the third and fourth ships in the series has something to do with boosting their economies of scale. In contrast, an even larger size increase for the last two ships is linked to both promoting economies of scale and plans to add larger fuel tanks, he suggests.

Larger fuel tanks will be able to hold methanol fuel, which Norway believes will be more environmentally friendly than the fuel currently used.

“The [bigger size for the] The last two are really a combination” of the two, Sommer said. “In addition to having larger ships to house the methanol tanks, we can also scale those tanks up,” says Sommer. . [as] more passengers.”

The goal of making the final two ships about 20% larger is “to deliver a great guest experience and see what we can do to take advantage of the scale and become more decarbonised in the process.” .”

Norway has previously told investors that future Prima-class ships will carry more passengers, but it did not talk about the ships growing in size by up to 20%.

Related: 8 types of Norwegian ships, explained

Developed since 2017, the Prima class is Norwegian Cruise Line’s first new series of ships in a decade. It is specifically designed to be smaller than the last new series of trains on the line.

With a total weight of 142,500 tons, the first new ship in the series, the Norwegian Prima, is about 16% smaller than the last ship the brand announced – the 169,145-ton Norwegian Encore. The second ship in the series, the Norwegian Viva, will be essentially identical. It is currently nearing completion at a shipyard in Italy.

Compared to previous Norwegian ships, the Norwegian Prima’s downsizing is a big change for a service that has pressed the super-size button on its new ships since 2010. That’s five brands. This introduced the 155,873-ton Norwegian Epic — the world’s sixth largest cruise ship at the time.

When announcing the Prima range of cars, Norwegian executives heavily touted their smaller size, saying it was crucial to growing the brand.

“Bigger is not necessarily better,” Sommer told TPG in 2019 in an exclusive interview on Norway’s Encore (which is Norway’s largest ship). The interview took place during the ship’s inauguration and included a discussion of the rationale for the smaller route with future ships.

Sommer told TPG at the time, while large ships like the Norwegian Encore are extremely popular with holidaymakers and large economies of scale, a shipping line like Norwegian needs a variety of vessel sizes in its fleet. He points to a number of reasons, starting with the fact that the largest ships are limited in where they can operate due to port infrastructure constraints.

Norway’s new Prima class was launched in August and received rave reviews, including one from TPG. call it tall and elegant and praised its smaller size.