00:00We've been talking about cruises for the entire morning now because Carnival came out with better numbers than expected, and yet its stock also traded down.
00:08What do you think the problem is? Why isn't the market embracing, you know, better numbers and newer product?
00:17Well, you know, I'm not, first off, nice to be here this morning. Thank you for having me.
00:21I'll say I'm not really here to discuss Carnival's earnings.
00:23Of course not.
00:24I think overall the cruise lines have had a tremendous run-up in stock, us included.
00:29I think over the last three months our stock is up the most in the industry, and we're very, very proud of that.
00:34Consumer demand is robust. The guests love the guest's experience.
00:38It reflects a tremendous value and a much better experience than hotels and resorts, and our stock price has seen a run-up in the last few months as a result of that.
00:46Well, I mean, the reason I ask about better results is, I was just reading in a story that you make more money at Norwegian than any of your competitors in terms of the amount passengers spend on board, right?
00:59And that seems to be what investors want. That's what analysts are after.
01:03Plus, you have higher-end, newer ships coming out to court the luxury consumer.
01:08That also is what we read that people want.
01:10And yet your stock, even though you've had a great three months, has really underperformed over the longer term.
01:16So why aren't investors seeing these products and these results and rewarding you for them?
01:23Listen, we are super passionate about delivering a fantastic onboard guest experience, and I think the spending results you've talked about in terms of onboard revenue are a reflection of the great experience our guests get on board the ship,
01:36that we give them things that they value and are willing to pay for, and we're very super excited about that.
01:40Listen, I can't talk about, you know, I can't really talk to what happened six months ago or a year ago.
01:45So I'm very happy with what our stocks performed the last three, four, five months now, again, outperforming all the other stocks in the industry.
01:53And our goal is to continue this run by delivering great experiences to our guests and great financial results to the investment community.
02:00Harry, there's certainly a lot more people going on cruises that maybe didn't in the past.
02:04I'd say my parents are among them.
02:05They went on one of your luxury competitors who shall not be named on this program.
02:10Even so, this question is for them because they looked around and said, hey, everyone is our age or older.
02:14Everyone's in their 60s and older.
02:16And that's something you hear about cruise operators.
02:19What do you do to attract the younger generations?
02:22And if you can't, is it a problem down the line for this industry?
02:26You know, I think if you look at the cruise industry, there's really a bifurcation.
02:29There are a series of luxury lines, perhaps like the ones that your parents went on.
02:33We have two luxury lines in our fleet, Oceana Cruises, which is our entry luxury level product, and Region 7C Cruises, which is our ultra luxury product.
02:41It's true in that demographic, these cruises are a little bit more expensive.
02:45We do tend to attract an oil recline tell.
02:47But we also have our contemporary brand Norwegian Cruise Line, where a large percentage of our guests are 40 and younger.
02:54We continue to develop amenities, entertainment, activities on board the ship that are relevant to those people, and they're absolutely responding.
03:02That the demographic between 35 and, say, 45 is our fastest growing demographic for that brand right now.
03:09And we continue to focus on that so that we can have a generation, a new generation of people that will cruise over and over and over again.
03:15The repeat rate of these guests are at all-time highs on any given ship.
03:19About 45% of our guests are repeat customers, which is one of the reasons we announced our loyalty match program this morning, so people can go between lines and have a great experience, the experience that they deserve.
03:31You have the Oceana, that's the luxury brand that you operate, Allura.
03:37It's a new boat coming back from its maiden voyage, I think, tomorrow.
03:42Yes.
03:42Tell us what's different, what's new, what are you offering consumers that differentiates this boat from, you know, other sort of luxury, high-end, big cruise lines?
03:54So at Oceana Cruises, we're super passionate about delivering a fantastic guest experience in terms of luxury amenities on board the ship, large cabins and suites, fantastic staff on board, and a large staff-to-guest ratio.
04:08So guests feel like they're being pampered at every single moment.
04:11Of course, the bedrock of Oceana Cruises is the finest cuisine at sea.
04:15We win every culinary award out there, and for this new ship, the Allura, we have upped the game even further.
04:20We've reintroduced a French restaurant concept, Jacques, which is extremely popular with our guests.
04:25We have a new creperie, which has fantastic sweets, freshly made all day long, crepes, ice cream, and things like that, and pastries.
04:32But, I mean, super high-end, not the normal fare you would get on a contemporary cruise line, and our guests are enthusiastic about it.
04:39We have new shopping on board.
04:41We have all different, we have new experiences in the theater, all the things that our guests value.
04:46And here it goes back to what Matt was saying, that you have this great capture rate of getting guests to spend on the boat itself.
04:51But you're talking about some serious luxury offerings.
04:54As we were saying, things that are expensive that not everyday people can necessarily afford.
04:59You also have more mass premium-type offerings, too.
05:03How does the behavior differ between the more luxury offering and those more mass offerings that you're giving?
05:08You know, traditionally, on the higher-end brand that we have, Regent, which is our ultra-luxury, it is all-inclusive by nature.
05:15So guests are getting, you know, free shore excursions, lots of free things, gratuities are included, you know, on board.
05:22So they're not really paying that much extra on that brand.
05:25Norwegian is a little bit different.
05:27We do have some fantastic bundles that guests can buy into, like 70% off drinks packages that we're running right now, 70% off specialty dining and things along those lines,
05:37so that guests can get a deal and enjoy luxury amenities on board our contemporary ship.
05:42But it tends to be a little bit more on the on-board spend side than the ticket price on our contemporary brand.
05:48But it tends to be a little bit more on the bank.
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