The Norwegian-Prestige Deal: What Does It Mean For Travel Agents?

PHOTO: Most travel agents agree with Prestige CEO Frank Del Rio, left, and Norwegian CEO Kevin Sheehan and give a thumbs-up to the pending acquisition. (courtesy Norwegian Cruise Line Facebook page)

News that Norwegian Cruise Line Holdings is buying Oceania Cruises and Regent Seven Seas Cruises was greeted favorably by those who know cruise lines the best — travel agents.

Both Norwegian and Prestige Cruises International, the parent of Oceania and Regent, will be strengthened by the move, allowing them to share best practices and save money by consolidating purchases and services, according to top executives for several cruise agent organizations.

“I think Norwegian Cruise Line buying Oceania and Regent Seven Seas is a very positive move for the travel agency community,” said Roger Block, president of Travel Leaders Franchise Group. “NCL, Oceania and Regent have been great partners of ours. They have done a very good job enhancing the products that they offer to the end-consumer, as well as the travel agent community — and I see that continuing.”

The $3 billion acquisition, which is expected to close in the fourth quarter, gives family-friendly Norwegian a strong foothold in the upscale cruise market. Oceania offers an upper-premium product while Regent is an all-inclusive luxury line.

The combined companies will offer products that appeal to cruise passengers in all stages of their lives. In theory, young families gravitate to Norwegian ships, shift to the more upscale Oceania as the kids grow up and household income rises, and then Regent when they become affluent retirees. Norwegian dipped its own toe into the luxury waters three years ago when it created The Haven, luxury ship-within-a-ship suite complexes on seven ships, targeted at upscale, multi-generational groups.

The consolidation makes sense. After all, Norwegian’s two major competitors made such acquisitions years ago. Carnival Corp. has 10 brands, including luxury line Seabourn, and Royal Caribbean Cruises Ltd. has six brands, including the upmarket Azamara Club Cruises.

“I think this acquisition will strengthen the Norwegian Cruise Line brand as a whole, as it will now allow them to catch up to their competitors who also have diversified portfolios,” said Michelle Fee, CEO of Cruise Planners, an American Express Travel Representative. “It benefits travel agents when all cruise brands are healthy — keep in mind that the competition for travelers’ attention is not just with other cruise brands, but all travel options, so the need to build strong cruise companies is essential for the entire industry.”

The key, according to luxury specialist Ruth Turpin of Cruises Etc. in Fort Worth, Texas, is to keep the brands distinct.

“I was very pleased with the news,” she said. “My concern is I hope they will let Regent and Oceania maintain the high quality they’ve always maintained as a separate entity. Each product has its own personality and following. We have very loyal Oceania clients and very loyal Regent clients, and we don’t want that to change.”

Earlier, in a conference call with financial analysts on Sept. 2, Norwegian CEO Kevin Sheehan said executives are committed to maintaining the brand identities while keeping the ownership changeover “behind the proverbial curtain” and invisible to most consumers. Plus, Prestige CEO Frank Del Rio, who co-founded Oceania Cruises, will remain in that position at least through the end of 2015.

“All three brands share a passionate view of travel agents as the life blood of our industry. This common belief will continue to be core to our strategies going forward,” Sheehan and Del Rio wrote in a joint letter to travel agents. “We are committed to maintaining three distinct brands and this will flow into all of our operations. We will be maintaining dedicated brand sales, passenger services and marketing teams that will continue to support each of these distinct brands. Day-to-day business operations will be business as usual.”

Turpin also said Norwegian has made some major overtures to travel agents over the past few years, starting with the Partners First program and, more recently, a strong showing at the Virtuoso Travel Week gathering of luxury retailers.

“This is a company that is very forward-thinking,” she said. “I’ve had a number of associations with executives recently, including Camille Olivere and Andy Stuart, and they are really very dedicated to delivering a quality product. I had not sold their older ships for quite some time, but I was really excited about Breakaway and Getaway. I had the opportunity to take my whole family on the Breakaway recently in The Haven, which is what we’re going to sell on Norwegian since we’re so luxury-oriented. It was awesome.”

Debbie Fiorino, senior vice president of CruiseOne and Cruises Inc., also viewed the acquisition as a favorable development.

“When a cruise line like Norwegian is willing to purchase a company that is already performing well, it shows that Norwegian has faith in their brand and, by further diversifying, they are looking toward the future and are committed to the industry. This is a positive sign for the cruise industry,” she said. “All three cruise lines have been terrific to work with and based on the relationship we have with them, agents should continue to have a positive and strengthened experience.”

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