With NCLH, all the Big Three public cruise companies will have new leaders inside an 18-month stretch emerging from the toughest period ever faced — an industrywide shutdown.
Harry Sommer to replace Del Rio as president/CEO of NCLH July 1 follows Josh Weinstein taking over from Arnold Donald at Carnival Corp. & plc in August 2022 and Jason Liberty succeeding Richard Fain at Royal Caribbean Group in January 2022.
What does this mean for the companies and the industry?
'All three publicly traded companies have new leadership as well as many of the individual brands ... It is a generational change,' said Alex Sharpe, president/CEO, Signature Travel Network.
While these new leaders are younger, all have extensive time in the industry and their companies, although not as front guys for most of their careers, Sharpe observed. Sommer has run Norwegian Cruise Line for a relatively short period (three years), yet it was the most difficult time in industry history. At the start of the pandemic, Weinstein was called back to the corporate headquarters, first as chief operations officer, after heading Carnival UK for three years.
'Was I happy to have the leadership we had at these companies through COVID? Yes!' Sharpe said.
'Those years of experience in life and in running those companies made those men uniquely qualified during a time no one could have prepared for or predicted,' he continued. 'These new guys are incredibly smart, have sound training on the financial side and have had the benefit of watching and contributing' as Del Rio, Fain, Donald and Micky Arison worked through the pandemic.
Del Rio will retire and leave the board in July, though plans to continuing serving as a special advisor NCLH through 2025, Donald exited last November after three months as vice chairman and Fain and Arison continue as chairmen.
While Signature doesn't yet have the relationships with the new leaders as it did with their predecessors, Sharpe said 'all three have embraced the trade in this comeback.'
Unprecedented challenges still
He added the new leaders face unprecedented challenges: high debt load, expectations and scrutiny from investors and Wall Street.
'They are expected to draw customers back to cruising and make better margins than ever before to pay down debt, which equates to higher pricing and lower costs. It is an incredible balancing act.'
In Sharpe's view, the previous leaders did an 'amazing job' steering the industry through COVID — 500 days without revenue and setback after setback.
'Richard kept us calm. Frank inspired us to fight through. The new regimes have a lot of work to do, but without the “old” guys, there might not have been anything left. Those that are retiring deserve it, and I am excited for the new guys and the challenges that lie ahead for all of us.'
Greatest asset: the people
Larry Pimentel, CEO/president Marc-Henry Cruise Holdings, joint owner/operator of Four Seasons Yachts, started a cruise brand (SeaDream Yacht Club) in the aftermath of 9/11 — as did Del Rio — and has been the CEO of five brands, including within both Royal Caribbean Group and Carnival Corp. & plc.
'The greatest asset any company has is not its ships, it's the people,' he said.
Pimentel reflected that in the past, many cruise industry leaders were generalists who grew up in much smaller businesses, some of them family-owned, and held positions across a range of areas. They learned how to succeed by trial and error.
Now businesses are much bigger, more systematized, there are more structures in place and more consultants than ever.
Deeper skill set
'Today's new leaders are specialists, to a stunning degree, not generalists, with a deeper skill set in certain areas,' Pimentel said, some in finance and others in operations. 'They're well-educated. I'm optimistic about the depth and the quality of the people.'
Like Sharpe, Pimentel said the new generation inherited an unprecedented environment with different challenges than their predecessors.
Moving from a complete shutdown to 'struggling to find the best way to work' — back in the office, remote or hybrid — is yet among those.
'Sometimes the circumstances deliver the people who, because of the circumstances, are allowed to shine,' Pimentel said. 'Sometimes [bad] circumstances bring out the best in a person.
All three of the new corporate leaders — Liberty, Weinstein and Sommer — have 'the right elements, including persistence and intellect ... Each will add something to the business,' Pimentel predicted.
'Never give in'
He believes persistence is a big part, quoting Winston Churchill who said 'Never give in.'
'There are a lot of things that gave us fear in shipping over the last years,' Pimentel continued. 'Bravery conquered that. There was not as much carnage as I would have expected, and look at the comeback! There are decent advance bookings, the luxury sector is exploding, and there are 18 new ships this year from as many owners.'
Touching on the strengths of the senior generation of leaders, PImentel said: 'Frank Del Rio is one of the most persistent guys I ever met. He has such drive and resilience. Richard Fain is known for building the ships of quality that changed the essence of traditional cruising into an experience focused on family entertainment. Micky Arison led the way to the General Motors of cruising; he wanted a product for every group, from the Carnivals to the Seabourns and everything in between. And globalization — brands for every country.
'We have the people we have because of the era we're in. Each new leader will bring something different and unique, and I hope they take the best of the past and add to it.'