- NCLH identified an additional $100m in annualised savings.
- Total savings over three years exceed $500m.
- Savings relate to technology vendor consolidation and outsourcing.
- CEO Chidsey stated opportunities are not guest focused.
- CFO Kempa stated global sourcing initiatives are still early.
Norwegian Cruise Line Holdings has found another $100m in cost savings, bringing total savings over the past three years to more than $500m. The new initiatives revolve around technology vendor consolidation and outsourcing. This follows over $300m in shipboard cost savings between 2023 and 2026, and another $125m announced earlier this year in SG&A expense savings following Elliott Management’s involvement as an activist investor.
CEO John Chidsey stated the company had not let up on cost discipline and organizational efficiency. CFO Mark Kempa tied the latest savings to vendor consolidation and headcount efficiencies, with the vast majority of benefits relating to capital expenditures and the remainder tied to salary and benefit efficiencies. Kempa stated the global sourcing initiatives programme is still in its early stages, with broader opportunity around that.
Chidsey stated additional opportunities remain and pointed to technology rather than the guest-facing product, stating they are not guest focused at all but inefficiencies and ways to use technology better. The cost actions are expected to support margin expansion and free cash flow as the top line recovers.
John Chidsey, CEO of NCLH, shared, “We continue to see meaningful cost opportunities. Not really going to size them, but I would say they’re meaningful. They’re not guest focused at all. It’s just inefficiencies and ways we can use technology better.”
