Going all-inclusive for the UK market was a bold move for NCL, but executive vice-president Harry Sommer tells Sophie Griffiths the results are good – after a few ‘hiccups’ along the way.
Norwegian Cruise Line’s new premium all-inclusive pricing packaging is going “fantastically” well, according to the line’s executive vice-president, international business development, despite a few initial “hiccups”.
The move in April to introduce all-inclusive pricing permanently for the UK market was seen as a bold move by the sector, raising eyebrows among both agents and competitor lines, but Harry Sommer says he is “thrilled by its results” – though he concedes it has not all been plain sailing.
“It’s really elevated the brand,” he explains. “We’re no longer competing with other cruise lines where it’s price, price, price – we’re now competing on product and the guests like it. Yes they spend a bit more money,” he adds. “But they get a better experience.”
I point out that some in the sector have suggested offering all-inclusive is not practical long-term due to the pressures it can place on onboard service. But Sommer is frank in his response: “When we first started there were hiccups, I’ll be honest. And then we learned lessons and staffed accordingly.”
He adds that all-inclusive passengers (which only applies to European guests) comprise “only a segment of the ship” meaning the pressure on staff is less, as Europeans traditionally only make up around 30-40% of all onboard guests.
“It’s a much better experience overall for guests,” he adds. “The crew are happier [because the gratuities are already included]. And it’s better for travel agents because they are now getting a good commission on the whole package.”
Sommer admits however that the line needs to do more in communicating this message to agents and customers. “In the UK we started in April – it’s only been six months.
“There are certainly learnings from it – you will see more agent education, for instance. We have made progress but we’re not there yet. There will be more discussion with the press; more marketing; more travel agent education.
We want to make sure that people understand it as this really is a different proposition.”
The line might have more work to do, but it is clearly committed to the move. “Bookings have held up 100%,” says Sommer. “In the 12 months to the end of September net bookings were up 10% year-on-year across the three brands and NCL [bookings] were around that too.”
In fact, Norwegian Cruise Line Holdings Ltd’s results from April to June show that its net yield per day (which includes onboard spend) was $247.61, compared with Royal Caribbean Cruise Lines’ $188.19 for the same period and Carnival Corp’s $160.15, although the latter’s figures were between March and May.
As Frank Del Rio, president and chief executive of Norwegian Cruise Line Holdings Ltd highlights to travel partners later that day: “We have by far the highest yields in the industry. We’re not winning the game because we’re the low-cost provider, we’re winning the game because we have the highest yields.”
So why not roll out all-inclusive to other markets then? “We talk about rolling it out internally,” Sommer confesses. “But things are going so well everywhere else we don’t feel like we need to.
“It wasn’t that things were going badly in Europe,” he adds. “But in brand recognition NCL ranked seventh or eighth. We don’t want to be ranking seventh or eighth in cruise. We would rather be first in the all-inclusive market.
“So it’s not likely to be rolled out elsewhere. [But] we are 100% committed to it in the UK [and European] market. You have to have the right product in the right market.”
As proof of its success in the UK, Sommer highlights the popularity of Norwegian Jade, which will be returning to homeport again in Southampton in 2018 – “it’s one of our best-booked ships for next year”, and he hints that the line is likely to return to the UK again in 2019.
“We’re still deciding itineraries, but I would guess we would have a UK NCL ship sailing out of the UK for the foreseeable,” he reveals.
And he insists that 2017 has been an “incredible year overall for all three brands” within the group – NCL, Regent Seven Seas and Oceania Cruises. “This year has been the best for as far back as we can remember,” he says. “For 2018 – we’re in the best position that we’ve ever been in for a year ahead.”