Norwegian Cruise Line Holdings (NCLH) sent shockwaves through the cruise industry with news that David Herrera, President of Norwegian Cruise Line, has abruptly stepped down.
The move certainly raises questions about the company’s direction at a time when NCL is struggling to keep up with competitors. The cruise line has also been facing financial headwinds while attempting to shift the brand’s strategy in an increasingly competitive marketplace.
The abrupt departure comes less than two years after David Herrera took the role, leaving industry watchers and loyal NCL cruisers wondering about the future of the cruise line. Herrera had been working with Norwegian Cruise Line for over a decade.
NCL made the following statement to TMR about the leadership change:
“Aligned with our continued strategic evolution and focus on our Charting the Course Strategy and 2026 targets, NCL is entering a transformative chapter in its nearly 60-year history that will elevate the guest experience even further… I am excited to work closer with the team at NCL to capitalize on the many opportunities ahead as we embark on our search for the next leader who will guide the brand into the future.”
In the same statement, Norwegian Cruise Line thanked David Herrera for his contributions over the last 10 years. While some agree that leadership change is necessary for the brand to compete, others question if this is a sign of more troubles to come.
Financial headwinds and a growing gap with rivals
Since the pandemic, Norwegian Cruise Line has struggled to keep up with competitors, especially Carnival Cruise Line and Royal Caribbean. There’s no denying that Norwegian Cruise Line has fallen behind its rivals financially, which could have contributed to the David Herrera’s sudden departure.
- Royal Caribbean Group has delivered staggering financial results since cruising resumed in 2021, with revenue growth, rising occupancy, and net margins that dwarf rivals. Its stock has nearly tripled in three years, making it a top pick for investors.
- Carnival Corporation, though weighed down by debt and its vast scale, has managed to stabilize its business and regain customer trust with aggressive marketing and value-driven itineraries.
- Norwegian Cruise Line Holdings, by contrast, has lagged on nearly every key metric.
Recent earnings highlighted the divide among competitors, as NCL’s reported revenue is down 3% year-over-year. This is party due to maintenance taking several larger ships out of service, according to the cruise line.
Profits fell sharply too, dropping more than 50%, with foreign currency exchange rates making things even worse.
A key measure of how much money cruise lines make from each passenger while onboard, called “net yield,” came in at just 1.2% for Norwegian. By comparison, Royal Caribbean posted 4.7%, nearly four times higher.
Looking at overall profitability, the gap grows even wider. Over the past year, Royal Caribbean’s profit margin was 19.4%, while Norwegian’s was only 9.1%.
Investors have noticed Norwegian’s struggle to remain competitive and bounce back from the pandemic. While Royal Caribbean shares have soared, NCL’s stock has actually declined 13% over the last three years.
Ultimately, Royal Caribbean is pulling away as the clear industry leader, Carnival is recovering, and Norwegian is at risk of being left behind.
Strategic pivot towards bigger ships and private island expansions
Norwegian is making a clear push to change course. Its new growth plans look a lot like what the larger cruise lines are doing, though some longtime fans aren’t convinced this is the right move.
After introducing the Prima Class, Norwegian expanded with the Prima Plus class of ships, beginning with Norwegian Aqua. These vessels promise more efficient layouts, higher revenue per berth, and new attractions like the Aqua Slide Coaster.
The cruise line is shifting focus towards building bigger ships with more cabins to maximize profitability – similar to Royal Caribbean and Carnival Cruise Line.
And the plans don’t stop there. Norwegian Cruise Line Holdings recently confirmed that Italian shipbuilder Fincantieri will construct four of the largest ships the company has ever sailed. Originally expected to measure 200,000 gross tons, the new design has since grown even larger to 226,000 gross tons and enough room for 5,100 passengers.
For comparison, the largest ship in Norwegian’s fleet is NCL Encore, which was built in 2019 and measures 169,119 gross tons. The vessel can hold about 3,998 passengers at double occupancy.
In comparison, Royal Caribbean’s brand-new Star of the Seas is about 250,000 gross tons with a capacity of 5,610 at double occupancy. Carnival’s largest Excel Class ships measure around 180,000 gross tons. This will place Norwegian’s newest ships in the same mega-ship class as Carnival and Royal Caribbean.
Great Stirrup Cay expansion and improvements
Norwegian Cruise Line also recently announced expansion plans for Great Stirrup Cay, its private island in the Bahamas. While NCL was the first cruise line to own a private island back in 1977, the destination has fallen behind rivals in recent years.
Although Great Stirrup Cay is beautiful, it lacks the “wow factor” of other cruise lines’ private islands, such as Royal Caribbean’s CocoCay or Carnival’s Celebration Key. The island has fewer attractions, limited premium offerings, and still relies on tender boats instead of a pier. Because of the tendering situation, it’s not uncommon for Great Stirrup Cay to be cancelled on an itinerary with unfavorable weather.
On the other hand, Royal Caribbean has redefined their private island with its $250 million transformation of CocoCay into Perfect Day at CocoCay, complete with a massive waterpark, hot-air balloon rides, exclusive Coco Beach Club, and new adults-only Hideaway Beach.
The island has been a huge revenue driver, with premium experiences regularly selling out. Royal Caribbean states that CocoCay is one of its top-rated destinations.
In addition, Carnival Cruise Line just opened their new private island, Celebration Key, this summer. The new destination features multiple piers and distinct zones for families and adults signaling Carnival’s intent to make its private destination just as essential as CocoCay.
Private islands have become key profit centers and a major selling point in the cruise market. For Norwegian, it was clear that Great Stirrup Cay needed to evolve to stay competitive against Royal Caribbean and Carnival Cruise Line.
Here’s a summary of Norwegian Cruise Line’s expansion plans for Great Stirrup Cay:
- Multi-ship pier, eliminating tendering and allowing larger ships to dock directly.
- Expansive new pool area with a swim-up bar and family splash zone.
- Welcome center and island-wide tram service to ease guest movement.
- Onboard favorites introduced ashore: an adults-only Vibe Beach Club and Horizon Park, offering lawn games and family-friendly recreational space.
- Great Tides Waterpark will span nearly six acres with 19 slides, a 170-foot tower, a fast-flowing river with swim-up bar, cliff jumps, and a kids’ splash zone.
Before his departure, Herrera emphasized that guest feedback was driving the enhancements, although Great Stirrup Cay remains one of the cruise line’s top-rated ports.
NCL’s shifted focus on Caribbean sailings
At the same time, Norwegian Cruise Line is placing a stronger emphasis on Caribbean itineraries, the bread-and-butter of the industry. Caribbean routes are in high demand, easier to market, and more profitable due to shorter turnaround times and lower operational costs.
As such, Norwegian has committed to placing 10% more of its ships in the Caribbean in 2026 compared to the previous year. At the same time, NCL will simultaneously reduce European deployments by 6% – a strategic shift directly aligned with guest demand trends.
Last fall, Norwegian Cruise Line canceled over 50 cruises across several ships, including NCL Star and NCL Dawn. These cruise ships were originally slated for one-of-a-kind itineraries in South America, Africa, Antarctica, and Indian Ocean. Instead, Norwegian will deploy these ships to the Caribbean.
But this shift risks diluting one of NCL’s historical advantages: unique and wide-ranging itineraries. Unlike Carnival and Royal Caribbean, Norwegian made a name for itself offering routes to Europe, Asia, South America, and ports less frequented by mega-ships.
Many of Norwegian’s loyal fans have praised the cruise line for their destination-focused and port-intensive itineraries. However, others have been critical of the cruise line’s “bait and switch” approach with dropping or switching ports after final payment. This was one of the most common complaints from Norwegian cruisers, and certainly impacted the guest experience.
Mixed reaction about David Herrera’s departure
The announcement of David Herrera’s sudden departure quickly made its way to social media, with cruisers on Reddit discussing the news with mixed reactions.
Some passengers welcomed the leadership shake-up, hoping it signals a renewed focus on quality and value across the fleet. However, others expressed disappointment with the brand’s current strategy. Some argued that Norwegian seems to be abandoning their unique itineraries and brand identity in favor of copying Royal Caribbean and Carnival’s playbook.
The top comment on the r/NCL Reddit thread reads:
“Maybe they can stop trying to copy Royal and go back to what they are good at – fantastic itineraries. Bring back regular African and South American cruises! My 2023 12 days, 12 ports, minimum 12hrs per port cruise from Bilbao to Rome. I don’t need a corporate island water park, leave that for the uncultured at Royal.”
In response, one commenter pointed out, “Problem is, they are not as profitable or in demand as the Caribbean itineraries are. Although I do like having the more niche itineraries, you are right. At the end of the day, it is a business though.”
Another cruiser replied, “The pier project at Stirrup Cay is a great addition, most who cruise NCL have missed at least one day there…but the other additions seem off-brand. That said, lazy rivers are pretty sweet!”
Several cruisers also highlighted what they see as clear cost-cutting in entertainment and hopes for improvement in the future. One commenter noted, “I’m for anyone who can give me decent entertainment.” Another replied, “The entertainment is abysmal at best. I skipped half the shows this last trip.”
“We have sailed with Carnival, RCL, Celebrity, Princess, and NCL. I know NCL’s recent changes with the drink packages and entertainment have been a disappointment for many. People mention nickel and diming,” replied another cruise.
Norwegian Cruise Line is now searching for a new president to guide the brand through a critical period of change. The leadership transition will be closely watched as the company works to strengthen its financial performance, expand its private island offerings, and stay competitive with Royal Caribbean and Carnival.
I am a new cruiser, but will have taken 5 in a 1 yr period. All NCL, because they are the most retired age solo friendly, now a huge segment of the cruise population. My biggest disappointment has been food quality. The waste in food is huge, onboard, but I take double what I eat, because I find that half of the offerings are inedible to me.
We had the same experience, posted my comments here but were not published.
I have completed two NCL cruises since Covid and was very disappointed. I even wrote a 2 page comments of issues on my last NCL cruisr which was a Med cruise and heard nothing back from Corporate. I currently have a Sapphire status and am also a shareholder. So I did cruise with NCL until corporate cut so many corners trying to save money. They overworked their employees, causing their service to be sub-par. I have switched to Royal Caribbean until NCL gets their act together. I do have a Hawaii cruise scheduled in October. I’m hoping my concernd with NCL can be changed.
We heard from a lot of the people with long loyalty to NCL with different levels of membership. Also very disapointed. I posted here my beefs but unfortunately they were deleted.
Fromm top to bottom a real downer:
Cruise Director, strong accent, hard to understand at times.
Assistant Cruise director, very loud and anoying voice, repeated sentences.
Entertainement, wasn’t too bad, British singer was a croud pleaser, magician, Forte duo gave good performances.
Layout of the Buffet, really bad design, not a round setting like other ships.
Customer service desk, most of the servers spoke better english than them.
Communication, really bad different staff give you different versions of the question you asked.
Tenders, they were chaos simply put.
Food, if a cruise director was doing their job, she would go to the kitchens and see how much food is left in the plates, lots of people tried the food and left it afer one byte. Rubbery meets including fish, how can you screw up fish tacos with rubbery fish?
I would never take another NCL cruise again, Holland America set the bar for up and NCL is no match at all to them.
From top to bottom a real downer:
Cruise Director, strong accent, hard to understand at times.
Assistant Cruise director, very loud and anoying voice, repeated sentences.
Entertainement, wasn’t too bad, British singer was a croud pleaser, magician, Forte duo gave good performances.
Layout of the Buffet, really bad design, not a round setting like other ships.
Customer service desk, most of the servers spoke better english than them.
Communication, really bad different staff give you different versions of the question you asked.
Tenders, they were chaos simply put.
Food, if a cruise director was doing their job, she would go to the kitchens and see how much food is left in the plates, lots of people tried the food and left it afer one bite. Rubbery meats including fish, how can you screw up fish tacos with rubbery fish?
I would never take another NCL cruise again, Holland America set the bar for up and NCL is no match at all to them.