Norwegian Acquires Oceania, Regent Seven Seas
by Andrew Sheivachman /Norwegian Cruise Line inked a deal to buy Prestige Cruise International for $3.025 billion, catapulting the company into a major role in the luxury cruise segment.
Norwegian will remain the third largest cruise line in the world following the transaction, which gives the company ownership of Oceania and Regent Seven Seas brands.
Oceania and Regent together own eight ships with about 6,500 berths, representing 46% of the upscale cruise marketplace. All told, brands owned by Norwegian will now total 40,952 berths.
The fleet is due to expand in short order. Regent is set to debut the Seven Seas Explorer in 2016, joining four Norwegian Breakaway Plus ships scheduled to debut over the next five years..
Luxury agents a factor
“The largest opportunities [for the expanded cruise company] lie in offering travel agents and guests a wide variety of experiences across generations [of cruisers],” said Norwegian CEO Kevin Sheehan on the company’s call announcing the deal.
Sheehan said access to high-end travel agents was one of the most important factors of the deal for Norwegian.
“This gives us an intro to the luxury and upscale travel agent we had trouble getting with the Haven category,” said Sheehan. The Haven is Norwegian’s luxury brand within a brand.
Brand identities
The three cruise lines will maintain their separate identities.
“The combination of three distinct brands, each serving a different market segment, under one umbrella, immediately creates an industry-leading cruise operator with an unmatched growth trajectory,” Sheehan said.
Norwegian’s expanded “portfolio of products” will allow it to appeal to guests “at every stage of their life cycle,” he said.
Sheehan also cited opportunities for “cross-selling, cross-brand collaboration, cross-business support, as well as joint partnerships.”
The acquisition also allows Norwegian to take advantage of increased economies of scale, giving it greater operational leverage.
Prestige differentiators
Prestige chairman and CEO Frank del Rio will continue his role of CEO of Prestige.
He said the value proposition of Prestige brands will remain different from those of the Norwegian Cruise Line brand.
He explained that on Oceania and Regent Seven Seas cruises, “the ship is not necessarily the focal point of the guest experience. Unlike in the more contemporary space, our ships don’t have to have that latest fad onboard to attract the highest per diem in the industry.”
Del Rio said he plans to stay with the company until at least 2015.
“I feel like we’ve run the gamut. There isn’t a whole lot more to do,” said Del Rio.
