Norwegian Cruise Line Increases Fares To Boost Revenue; Company Undergoing Major Makeover For 2016

The Norwegian Cruise Line has expressed its plan to continue increasing its fees for their onboard services. The move was part of the plan to drive more earnings. However, the Norwegian Cruise Line Holdings president and CEO Frank Del Rio has also assured that their passengers will get what they are paying for by improving their fleets.

The announcement was released on Tuesday, Nov.3 on Norwegian Cruise Line's third quarter earnings call.  According to Del Rio, the only way to sustain good revenue for the company's three brands is to push higher prices. On the third quarter earnings call, he claimed that they will not just increase ticket prices, but also the prices of their services onboard. He also promised that there will be a big improvement on their ships so consumers will surely enjoy their cruise, SKIFT reports.

"At the end of the day, the consumer is not stupid," Del Rio said on Tuesday during a quarterly call with analysts. "The consumer has choices. And we think the [return] on these kinds of investments outpaces the [return] and the payback of new vessels."

As part of the move, the Norwegian Cruise Line that merged with Regent Seven Seas and Oceania last year is putting its eight ships into dry dock in 2016 and another six more in 2017. According to Bloomberg, the ships will be undergoing upscale renovation that includes installing of better linens, new carpets, plates, cutlery, and a lot of soap and water.

The Norwegian Cruise Line is eyeing for at least $2.85 per share, with total earnings of around $3 billion in 2015.  Del Rio, who is on his 11th month as the CEO of the company expressed his wish to enhance the services of the Norwegian ships, which is known for its affordability. He claimed that the former CEO, Kevin Sheehan hasn't focused on these things during his term and that the company needs a real makeover to earn good revenue.

"I will tell you there was underspending in prior years," Del Rio said of Sheehan's presiding in the previous years during the meeting.

With the Norwegian Cruise Line ships plan for renovation to increase its revenue, its other brands, Regent Seven Seas Cruises and Oceania Cruises are also targeting the Chinese market in driving higher revenue. The company has already opened its offices in Hong Kong and Beijing.