“We see the future and we think this is the right focus—and obviously, we want to secure the spots before our competition does,” Norwegian Cruise Line Holdings Ltd. president and CEO Harry Sommer told investors on a call announcing the biggest ship order in its history this morning.
Betting big on the next decade of big-ship cruising, NCLH announced orders for eight new ships across its Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands, plus the construction of a multi-ship pier at Great Stirrup Cay. The new build order will add nearly 25,000 berths and new classes of ships for each brand over the next decade. Beginning in 2026, NCL will add four Prima-Plus class ships, each holding about 5,000 guests; Oceania Cruises will add two Allura Class ships holding 1,450 guests, and Regent Seven Seas Cruises will add two Explorer Class ships, each holding 850.
By 2036, Norwegian Cruise Line Holdings Ltd. plans to grow its fleet by more than 40%, from the current 32 ships, with approximately 66,500 berths, to 45 ships with more than 100,000 berths.
“This strategic new-ship order across all three of our award-winning brands provides for the steady introduction of cutting-edge vessels into our fleet and solidifies our long-term growth. It also allows us to significantly leverage our operating scale, strengthen our commitment to innovation, and enhance our ability to offer our guests new products and experiences, all while providing opportunities to enhance the efficiency of our fleet,” Sommer said.
NCLH is “super-passionate about delivering a great guest experience; it’s something we talk about a lot internally. We have lots of ships, we know what guests enjoy, and we are super-focused on delivering on those.” With Breakaway Plus and Prima, “we think we can take the best of both and create something that’s really world-class.”
These are not jumbo ships or incredible jumps in size, he noted, but NCL thinks they will make it possible to focus on costs, increase efficiency and “give our guests a great product that they will enjoy.”
About $150 million worth of work on the pier at Great Stirrup Cay in the Bahamas will allow for two ships to park simultaneously. It is scheduled to begin this summer and be completed by late 2025. The new pier will be constructed to accommodate two large vessels of the company’s current and future ship classes. Only a small piece of the island currently is being used, Sommer noted on the investor’s call this morning, and guest counts to the island are expected to grow over 50% in the first 12 months. In a typical 12 months about 400K guests so about 600K starting in 2026.
NCLH CFO Mark A. Kempa said the ships are expected to “secure our growth trajectory, significantly boost our earnings profile, and enhance shareholder value well into the future. With a favorable payment structure that includes pre-delivery financing and modest initial installment payments for these ship orders, we still anticipate a strong Net Leverage reduction of 1.5 turns by the end of 2024, relative to 2023, and expect the Company to continue reducing Net Leverage each year for the foreseeable future.”
“We really want to build something special and there’s a tremendous advantage to designing things so many years ahead. We’re not going to settle; this product will be truly extraordinary, and we are going to take the time to deliver it right,” Sommer said.
