Norwegian Cruise Line’s president and CEO Kevin Sheehan is fond of outlining the upward trajectory that has taken place on his watch since he joined the company less than six years ago. To be fair, the figures are impressive. “Our company continues to be on a very strong momentum,” he says. “We’ve had 22 quarters of consecutive growth year over year in our cash flows, and our operating margins have increased by well over 10%. We see that continuing for the next five to six years at least.”
Sheehan’s confidence is based on the success of his early interventions. “I had the opportunity to optimise our business when I came in a few years ago because the company had not been performing to the level it could have,” he says. “We had these great ships, so making sure we were thoughtful and consistent about how they operated enabled us to drive better results, more engagement from our crew and more satisfaction from our guests.”
The market responded enthusiastically when the company went public at the beginning of 2013 and now, says Sheehan, “in guidance put out to the investment community for 2014 the estimate was that our EPS would grow by 60 per cent.” He says this growth is driven by a combination of ticket yields and the introduction of Norwegian Getaway earlier this year. The two newbuild orders announced in July add to the bullish mood surrounding the company.
New business ventures are keeping Sheehan occupied, in particular the line’s purchase of a second Belize island destination. “The next ship coming into our fleet, Norwegian Escape, will be in the eastern Caribbean year-round so we will move Getaway to the western Caribbean year-round. In addition to that, we seasonally have other ships in that market, such as Norwegian Sky, which sails out of Miami on three- and four-day itineraries year-round. So what we wanted to do is have a very similar destination in the western Caribbean as we do in the eastern Caribbean.”
The company has spent more than US$30 million in four years on its facilities in the region, says Sheehan. “We’ve improved the beach and marina, putting in beautiful bar opportunities, a really improved food service and a lot of shade areas; we’ve expanded the beaches fivefold. It’s one of the most important things cited by our guests that made their experience a tremendous experience.”
This investment is part of the game plan Sheehan put in place when he joined the company. “When I came in we needed to fix the business first; in the first three or four years we got pounded by the economic downturn in 2009. Then we needed to get all of our ships ordered and build the brand – and now the third leg is about taking control over the destinations and making sure we have enough variety for people that want to come on the same sailing multiple times.”
Progress on the Norwegian Escape build is a source of great satisfaction to him for several reasons, the first being its status as the tenth newbuild the line has commissioned from Meyer Werft. “It was a great decision to move our shipbuilding back to Germany, knowing with certainty that a family that’s run the business for 225 years or so is going to make sure that they get it done and that they’ve thought it through and there’s no surprises. Each ship we’ve built there since we’ve moved back has been completed in time and on budget and the guests love the ships.”
Escape’s reflection of Norwegian’s environmental credentials is another plus point for him. The choice of conservation-focused artist Guy Harvey to paint the hull is significant. “It made a lot of sense to align our company with conservationists and we’re going to help fund his foundation as we want to be mindful about the oceans and what they are for us.”
This article appeared in the Autumn/Winter 2014 edition of International Cruise & Ferry Review. To read the full article, you can subscribe to the magazine in printed or digital formats.