Norwegian Cruise Line Holdings CEO Frank Del Rio revealed the company’s roadmap for recovery and resumption of cruises Thursday during a conference call with investors.
The four-stage plan involves:
- Developing enhanced health and safety protocols
- Addressing global port availability
- Activating the company’s marketing machine to stimulate demand for cruising
- Initiating a phased relaunch
Sounding more somber than he has been in a recent media blitz, Del Rio described the road map as “very critical” and said it would be predicated on two main factors: first receiving approval to safely resume operations from governments around the world including the CDC; and second, providing consumers with “absolute confidence” in the company’s ability to deliver a safe and healthy vacation environment through what he called “new and enhanced health and safety protocols utilizing the latest state-of-the-art technologies and testing methodologies.”
Norwegian Cruise Line Holdings operates three brands Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises with a combined fleet of 28 ships and almost 60,000 berths.
While Del Rio did not go into detail of what those enhanced safety protocols would entail, he said Norwegian wanted to “preserve the traditional elements of the cruise experience, the great value, the multiple destinations visited, the wide array of dining entertainment offerings, modified as necessary as to the many changes we are becoming accustomed to in our daily lives.”
He added that nothing would be more critical to resumption of operations than “making cruising the safest option in the travel and leisure space: and providing guests with peace of mind regarding their health and safety.
Doing so, he said, would require a “multi-pronged, multidisciplinary and multi-agency and global strategy that will involve strong collaboration between cruise lines, industry associations, national and local governments, public health agencies and ports around the world.”
Job one though, he said, was to get the CDC to lift its no-sale order.
“Can’t go very far without that,” said Del Rio. “And so, we have to introduce a series, what I would refer to as a robust and comprehensive series of protocols that gives the CDC confidence that the environment onboard a cruise ship is healthy.”
Next on the menu, Del Rio said, would be to communicate whatever protocols are decided upon to the traveling public and to “give them the same confidence that we were able to instill in the CDC.”
That, he said, would take time. “This is not an exercise of optics. This is not an exercise of let’s get away with the minimum required. I want to do everything humanly possible within the bounds of what technology offers us today to be able to look my own family in the eye and say ‘You are safe to go on board our cruise ships.’”
A bright future with high demand for cruising
Addressing the other elements of the plan, Del Rio said Norwegian would need to work with port operators around the globe to understand their plans, noting that they would guide the early days of the relaunch, including which itineraries would first come online.
With regards to marketing, he said that Norwegian would not operate on a “discount-to-fill strategy” but rather on a “market-to-fill strategy.”
“We have literally shut down the sales and marketing machine over the last 10 weeks or so. And despite that shutdown… we’re still taking bookings. And that gives us a lot of encouragement that despite everything that’s going on, people still want to cruise. And I think that’s the best indication we have that there is a future and the future will be bright.”
Describing the impacts from COVID-19 as “swift and severe” Del Rio said Norwegian would have to respond exponentially faster than it had ever had to in facing previous challenges.
From 1,000 miles an hour to a screeching halt
“This is an industry, a company that was running 1,000 miles an hour and overnight was shut down to just a screeching halt and we’ve got to get that momentum back,” he said.
As to when and how Norwegian and the rest of the industry would be able to sail again, Del Rio said that what was important to him was to begin to get ships back in the water, without being committed on a date or the initial extent of sailing.
Del Rio said he expected that once the company began to resume services, it would take around six months to build up to full steam.
“With new protocols in place, coordination with ports and demand engines churning, what follows will be a phased re-launch of voyages. We expect sailings to restart with a handful of vessels, phasing in others over a period of five to six months before we have our full fleet back in operation.
“The return to service of a phased approach of roughly five vessels per month is what we believe we operationally could handle in terms of bringing back the ship from cold lay-up including re-crewing the vessels, et cetera. And so that – given that we have 28 vessels, if you bring back an average of five vessels a month, it’s going to take about six months to get all ships back operating.”