Norwegian Cruise Line to Intensify Cost Management Initiatives

Norwegian Cruise Line Holdings will be accelerating certain initiatives as part of its $300 million cost savings program, said Harry Sommer, president and CEO, speaking on the company’s first quarter 2025 earnings call.

“As part of our Charting the Core strategy, we have identified initiatives supporting $300 million of cost efficiencies across the organization, and we are using this as an opportunity to accelerate certain initiatives to capture benefits even sooner,” he said.

Of note, first quarter 2025 earnings showed significant savings across multiple categories year over year when compared to the first quarter of 2024.

Highlights:

• Commissions Transportation and Other: $396 Million (-9.37%)
• Payroll and Related: $335 Million (-2.84%)
• Fuel: $175 Million (-11.5%)
• Food: $75 Million (-10.77%)

Mark Kempa, executive vice president and CFO, said the company was “prepared to proactively accelerate additional efficiency measures.”

Kempa said savings came from both onboard the ships and from back office systems.

“We are really starting to leverage our new commercial capabilities out of our supply chain management system,” he explained. ”We’ve really made big strides there. Those are things that do not impact the customer. We’ve really made big strides on our commercial negotiations.

“But also technology, we’ve made some soft minor technology investments that are really allowing us as well to gain more efficiencies on the back end …  all with the lens of not impacting the guest experience.”

Sommer stressed the company was not cutting for the sake of cutting.

“We’re actually spending more money on certain areas, things like meats, proteins … the things that really make a difference to our guests … we’ve actually increased our spend year over year in order to improve the quality. So despite that, there are so many efficiencies in the other areas,” he said.

Bringing more itineraries closer to home will also drive cost savings, he continued.

“Think about the logistics of shipping food for a 3,000-passenger ship to places like South Africa or Argentina or Asia. So it’s really a double benefit, a modest deal tailwind and actually a real cost tailwind.”