Hired in February to lead a turnaround effort at Norwegian Cruise Line Holdings, CEO John Chidsey has begun making changes, from an overhaul of Norwegian Cruise Line's marketing to cutting jobs in the company's shoreside operation.
Chidsey discussed these changes during NCLH's Q1 earnings call on May 4, and throughout the call he stressed more than once that the NCL brand needed improvement, while luxury brands Oceania and Regent Seven Seas Cruises were meeting expectations.
NCL will have new leadership in its marketing department. Kiran Smith, hired as chief marketing officer in June 2025, is leaving the company.
Chidsey said NCL's spend on marketing hasn't generated an acceptable return and that the line needs to do a better job targeting "premium families" with kids to maximize occupancy. He also said marketing efforts haven't effectively targeted itineraries with the most cabins to fill.
"We have to get those fundamentals right in order to drive demand more consistently and put ourselves in a better position to optimize pricing," Chidsey said.
He also described NCL's marketing spend as bloated, increasing significantly in the last several years without producing the desired results.
CFO Mark Kempa said during the earnings call that NCL's marketing expenses are about double its competitors on a per-bed basis. And so, the company is not only revamping NCL's marketing, it is reducing the dollars spent.
A new ad campaign launched in January, "It's Different Out Here," has been part of NCL's recent marketing efforts. The campaign resurrected a tagline from a campaign in the 1990s.
Robert Kwortnik, a Cornell University marketing professor who teaches a course on the cruise industry, cautioned that marketing campaigns setting an expectation about a brand must match the actual guest experience. That means if NCL promises "it's different out here," the cruise experience has to be different from what the competition offers, he said.
"If these differences don't exist, the NCL brand will continue to drift and underperform," he said.
That is true not only for marketing but for any changes Chidsey initiates: the work "only pays off if it extends to the guest experience," Kwortnik said.
Cutting job costs
While marketing changes will take time to implement, NCLH is making adjustments that will yield immediate savings, including "streamlining the shoreside organization," a move that will reduce salary and benefit expenses by about 15%, Chidsey said.
To further cut employment costs, NCL is doing some offshoring of jobs, but the company wasn't specific about what functions. These efforts "are in the early stages, and we are testing and learning as we go," Chidsey said.
Due to the length of the cruise booking window, it will take time for Chidsey's turnaround initiatives to produce results that hit the bottom line, said Truist Securities analyst Patrick Scholes. He said the earliest he expects to see returns is the fourth quarter.
Chidsey himself said the company is laying the foundation for 2027 with the changes being made in marketing and revenue management.
High Europe exposure
In the meantime, NCLH lowered its net yield expectations for the year. The company said it was behind its targeted booking curve entering 2026, and the Iran war has exacerbated booking challenges, particularly in Europe, where demand has softened because of high airfares and hesitant consumers with concerns about costs and/or safety.
In the third quarter, 38% of the company's fleet will be deployed in Europe, and NCLH competitors Carnival Corp. and Royal Caribbean Group don't have as high an exposure in Europe, Scholes said.
Kempa forecasts yields may be down "in the high single digits" in Q3.