During his first earnings call as Norwegian Cruise Line Holdings CEO on March 2, John Chidsey projected confidence that he is the right leader to make changes at the company.
Chidsey was named CEO Feb. 12, the day the company announced previous CEO Harry Sommer had stepped down. Chidsey had been an NCLH board member for a cumulative decade but otherwise wasn't well-known in the cruise world: His most recent executive positions were as CEO at Subway Restaurants and Burger King Holdings.
On the earnings call, Chidsey said he has "turnaround experience" and a history of guiding businesses "through periods of transformation and performance improvement."
He's been credited with reshaping Subway and Burger King. Subway was closing thousands of stores in the years leading up to Chidsey's arrival in 2019. He oversaw menu changes, corporate layoffs and international expansion, slowing the business' decline before overseeing its sale in 2024, according to Restaurant Business Online.
By Chidsey's 2024 exit, new restaurants were opening at nearly double the rate of 2019, according to the company.
Burger King was similarly struggling when he entered in 2004, with its competitive position relative to McDonald's and Wendy's slipping, according to reports. It regained financial footing and went public under his leadership.
Chidsey said his prior experience "reinforces a simple lesson: sustainable improvement comes from disciplined execution, operational rigor and a clear focus on the fundamentals. This is the approach I intend to bring to NCLH."
He said his tenure on NCLH's board has given him "deep familiarity" with the cruise industry.
"I've seen our company at moments of real strength, as well as through some of its most challenging periods, including the pandemic," he said. "I've experienced firsthand the resilience of this company and its people."
NCLH's shortcomings
Chidsey offered an initial analysis of weaknesses at NCLH and the ways he intends to fix them.
The company has lacked cohesion with departments not working in concert, he said. Chidsey said there were "clear failures in the basics of developing coordinated plans."
Norwegian Cruise Line's Norwegian Aqua in Miami. Photo Credit: Norwegian Cruise Line
For example, the company increased Caribbean capacity 40% in this year's first quarter, but did so before enhancements at Norwegian Cruise Line's private island, Great Stirrup Cay, were complete.
Before the new year, NCLH opened a two-berth pier at the Bahamian island, eliminating the need to tender guests ashore. It also opened a resort pool with swim-up bars. These were significant advancements, but the Great Tides Waterpark, which will greatly enable NCL to monetize Great Stirrup Cay, won't open until the summer.
"I think we got a little ahead of ourselves," Chidsey said.
CFO Mark Kempa expounded on the problem later in the call.
"Importantly, we did not sufficiently align revenue management, sales, marketing, itinerary planning and on-island monetization strategies to support that deployment shift," Kempa said. "The individual components were moving forward, but they were not integrated under a single cohesive operating plan designed to absorb the capacity at the right yield."
In addition to establishing more cohesive operations, Chidsey intends to invest more heavily in technology and revenue management. Chidsey didn't get into specifics about technology, but perhaps an improvement in Norwegian Cruise Line's app is in the offing. Its functionality gets mixed reviews on cruise chat boards and on social media.
The activist investor
Chidsey assumes leadership while activist hedge fund Elliott Investment Management has taken a 10% stake in NCLH and is pressing for a strategic overhaul, including a replacement of the current board of directors. Elliott criticized NCLH's selection of Chidsey as CEO because he was on the company's board and has never been a cruise executive.
Chidsey said he has been in contact with Elliott.
"One of the first things I wanted to do when I stepped in was to talk to shareholders and get their perspective on what we've done well and, clearly, what we haven't done well," he said. "So that's all underway. We're very interested in their thoughts on how we better drive long-term shareholder value."
Chidsey said he is in the process of reviewing the company and creating an operating plan.
Once that effort is complete, "progress will require patience, discipline and consistent execution," he said.
He expressed confidence in other leaders at the company, including new Norwegian Cruise Line CEO Marc Kazlauskas and chief luxury officer Jason Montague, who oversees Oceania Cruises and Regent Seven Seas Cruises.
"This group needs to bond, and we need to create a culture of accountability and empowerment," Chidsey said. "The pieces are definitely here."