Norwegian Cruise Line enters SA, Dubai cruise markets with purchase of Regent Seven Seas and Oceania

Norwegian Cruise Line, the third-largest cruise company in the world, has followed the example set by its major competitors Carnival Corporation and Royal Caribbean by finally establishing a firm foothold in the luxury cruising sector with the purchase of Oceania Cruises and Regent Seven Seas.

The grand staircase aboard Oceania’s cruise ship Nautica is pictured above.

The US $3-billion deal was confirmed this week when Norwegian Cruise Line announced that it has wholly purchased Prestige Cruise Holdings, the parent company of the Oceania and Regent Seven Seas cruise brands. The deal is the largest acquisition in the cruise industry since Carnival Corporation added the British cruise line P&O Cruises to their portfolio in 2003.

The move is a significant one on the part of Norwegian Cruise Line. Until now, the 15-ship cruise line, which is a strong player in the North American mass market sector, had no real luxury footprint apart from ‘The Haven’ premium area aboard their cruise ships, and lacked any real diversification in terms of international passengers.

Norwegian Cruise Line’s two main competitors on the other hand, Carnival Corporation and Royal Caribbean Cruises Ltd, each own luxury cruise brands that give them access to the high-end sector of the international cruise market.

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Carnival Corporation owns Seabourn Cruise Line, a leading luxury cruise operator, while Royal Caribbean owns Azamara Club Cruises, which is globally recognised for its inclusive cruises and diverse itineraries.

The acquisition of Regent Seven Seas and Oceania will see eight cruise ships coming under the Norwegian Cruise Line umbrella, five from Oceania and three from Regent Seven Seas, although the cruise line has Seven Seas Explorer under construction, with delivery expected in 2016.

CEO and President of Norwegian Cruise Line Kevin Sheehan has sought to allay fears by loyal Regent and Oceania passengers that the cruise lines’ might be ‘cheapened’ by the sale with the announcement that “guests will never notice that we’ve changed”, insisting that all three cruise brands would be kept distinct from one another. A sign of this is NCL’s confirmation that there are no plans to share loyalty programs between the brands.

“This is really putting three successful, smart companies together and having more scale,” said Sheehan. “Norwegian now, for example, will have access to travel agents who are experts at selling luxury cruises, while a loyal Regent customer who wants to take his children and grandchildren on a family cruise may now be exposed toward Norwegian’s family-oriented ships and the Haven.”

Industry observers have noted that the sale will strengthen all three brands by giving Regent Seven Seas and Oceania access to the financial protection provided by a big brand like Norwegian Cruise Line, while the luxury cruise lines’ experience with diverse itineraries and international passengers could potentially help Norwegian diversify its traditionally North American-heavy clientele.

The move also gives Norwegian Cruise Line a very strong share of the luxury cruise market, around 46% in fact, which is more than that enjoyed by either Royal Caribbean or Carnival Corporation through their luxury subsidiaries.

The move also brings Norwegian Cruise Line into the South African and Middle East cruise markets for this first time. Norwegian Cruise Line has never offered any South African or Dubai cruise departures, as far as Cruise Arabia & Africa are aware, but their new luxury brands, Regent Seven Seas and Oceania, both have several of their cruise ships sailing out of Dubai and Cape Town during 2015.