NCLH Speeds Up $300M Cost Savings Effort for Greater Gains

The Norwegian Jewel cruise ship
Corporate News Cruise Industry
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Norwegian Cruise Line Holdings (NCLH) is moving quickly to advance several initiatives within its $300 million cost-saving program, announced President and CEO Harry Sommer during the company’s first-quarter 2025 earnings call.

“As part of our Charting the Core strategy, we have identified initiatives supporting $300 million of cost efficiencies across the organization, and we are using this as an opportunity to accelerate certain initiatives to capture benefits even sooner,” Sommer explained.

The company’s first-quarter 2025 results reflected notable year-over-year reductions across multiple spending categories compared to the same period in 2024.

Key Cost Savings Highlights:

  • Fuel Costs: $175 million (down 11.5%)
  • Food Costs: $75 million (down 10.77%)
  • Commissions, Transportation, and Other: $396 million (down 9.37%)
  • Payroll and Related Expenses: $335 million (down 2.84%)

Mark Kempa, executive vice president and CFO, added that the company was “prepared to proactively accelerate additional efficiency measures” to further improve results.

Kempa noted that the savings were coming from both onboard operations and back-office systems. “We are really starting to leverage our new commercial capabilities out of our supply chain management system,” he said. “We’ve really made big strides there. Those are things that do not impact the customer. We’ve really made big strides on our commercial negotiations.”

He also highlighted how small technology investments have boosted backend efficiencies: “All with the lens of not impacting the guest experience.”

Sommer emphasized that the company’s approach is not simply about cutting costs. “We’re actually spending more money on certain areas, things like meats, proteins … the things that really make a difference to our guests … we’ve actually increased our spend year over year in order to improve the quality. So despite that, there are so many efficiencies in the other areas,” he said.

He further pointed out that focusing on itineraries closer to home offers additional cost advantages. “Think about the logistics of shipping food for a 3,000-passenger ship to places like South Africa or Argentina or Asia. So it’s really a double benefit, a modest deal tailwind and actually a real cost tailwind.”