Is this another time Eric Goldring is going to be “Making Waves”? Good question! What is certain is that a major shareholder of Norwegian Cruise Line Holdings, owner of Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas, certainly is. 

The issue is simple: Royal Caribbean (owner of Royal Caribbean, Celebrity Cruises, and Silversea Cruises) has been extraordinarily more profitable than NCLH for over the past decade, with RCL has also had a huge increase in its stock value while NCLH’s stock valuation has significantly lagged.

Put succinctly by that shareholder, Elliott Investment Management, it made a number of damning accusations (mostly backed by figures and statistics),

[NCLH’s] strategic and execution missteps during a time of strong demand in the cruise industry, which have led to profound undervaluation and substantial untapped potential

[A decade of] strategic misjudgments and poor execution, meaningful financial and stock-price underperformance and a long-term erosion of investor confidence. 

Appointing successive CEO’s destroyed significant shareholder value and said the recent abrupt appointment of a long-tenured Board member with no cruise-industry executive experience continues this troubling pattern of poor judgment and insufficient process.

I was recently asked by Cleveland Research Company about my thoughts on NCLH’s just announced CEO (formerly from Subway). I stated,  consistent with Elliott “NCL has been focused on the bottom line and increasing revenue both in sales and onboard revenue, rather than same being driven by product improvements…Chidsey comes from a troubled company that seriously damaged its market share and reputation in search of that same bottom line.”

In other words: The problems are pretty obvious!

As Elliott also noted, the issues with NCLH go back about a decade. And that is exactly when Frank Del Rio made his play to push out the prior CEO who had successfully taken NCLH public: Another BIG Shake Up at Norwegian/Regent Seven Seas/Oceania/Prestige Cruise Holdings – The Sheehan vs. Del Rio Result – Goldring Travel

Those of you who follow me know that I have never been a fan of the former CEO Frank Del Rio; something that is fairly ubiquitous in the industry. He had a history of grandiosity while lining his pockets at great cost to the products, resulting, to my mind, with a lot of “smoke and mirrors”.  As they say, “A fish stinks from the head,” and in 2021, Del Rio sought a $36,400,000 (that’s $36.4 Million) payout along with a $2,800,000 bonus while the company lost a record $4,000,000,000 (that’s $4 Billion).  You know what makes that even more offensive: Del Rio’s sought compensation is double what he received the prior year! While the NCLH Board voted 83% against Frank Del Rio’s demanded compensation package, it was “incredibly embarrassing” for the company. Here is the Miami Herald article.

Here is another article: Non-Endorsement of Frank Del Rio-Related Cruise Line

When Del Rio retired in 2023, with his son, Frank Del Rio, Jr., in place at Oceania and his long-time associate, Harry Sommer, installed as CEO of NCLH, nothing really changed though I hoped it would, for it seemed to me (and others) that Del Rio was still asserting his influence of grandiosity and wildly overstating the quality and success of the products. Just as two examples, one of which Elliott highlighted:

•  I have consistently called out Oceania and Regent for misleading marketing, making claims about product quality that simply aren’t true, and combining them with constant grandiose (there’s that word again!) claims of record sales. Why can’t these brands, like Explora Journeys and Silversea, as examples, stop the hype and deliver the promised product?  (Yes, I have sailed both Oceania and Regent. You can find my very critical reviews.) Here is my recent article: Oceania Cruises Now Claims it is a “Luxury” Cruise Line. Seriously: It Should Stay In Its “Premium” Lane! – Goldring Travel
• The naming ceremony for Norwegian Prima included Katy Perry, flying in 2,600+ guests to Reykjavik, setting up 12 venues, and holding extraordinary off-ship events and dinners, all of which required the largest labor call in Norwegian history. (Elliott’s call out.)