Norwegian Cruise Line Holdings used its latest earnings call to lay out a series of internal challenges it’s now trying to fix, from weaker marketing performance to pricing pressure and ships that aren’t as full as expected.
The company now expects pricing to decline 3% to 5% this year, with the heaviest pressure coming from Europe and Alaska. Executives also acknowledged that Norwegian entered 2026 “behind the booking curve,” leaving it with more inventory to fill than planned.
CEO John Chidsey explained during the Q1 earnings call:
“To me, these are self-inflicted wounds that we need to go fix or missteps. I wouldn’t say that we’ve completely lost our way by any sense with agents and consumers, but I wouldn’t say we’re hitting on all cylinders by any stretch.”
This was one of the most important takeaways from the call. Norwegian’s executives repeatedly said they still believe demand for cruising remains strong. However, the cruise line’s biggest problem has been poor execution.
In fact, this theme has been building for months.
Earlier this year, Norwegian acknowledged execution problems around pricing, deployment, and internal coordination. This included a Caribbean expansion that moved ahead before marketing, pricing, and Great Stirrup Cay improvements were fully aligned.
Norwegian says its marketing has not been working well enough
The biggest operational problem discussed on the call was demand generation. Essentially, Norwegian states the company is not getting the right customers to book the right cruises at the right time.
Chidsey said:
“We have had missteps over the last few years where we were not consistently and effectively speaking to our core customer. We were not always putting the right commercial support behind the itineraries we were trying to fill, and our marketing was not as demand generative as it needed to be.”
In this way, Norwegian isn’t placing the blame solely on demand. Executives pointed to gaps in how marketing, pricing, and sales have been working together. This lack of alignment has impacted financial results for Norwegian compared to competitors.
For cruisers, this could mean more targeted promotions going forward. Instead of generic sales, Norwegian appears to be moving toward more specific marketing based on ship, itinerary, destination, and customer type.
Chidsey also said the company plans to bring in new marketing leadership at NCL and better connect marketing with revenue management, deployment, and sales.
The company is cutting marketing spend, but investing in better people
At first, it might sound contradictory that Norwegian wants to improve marketing while also reducing marketing spend. But executives said the issue is not just how much money Norwegian spends, but how effectively that money is used.
Chidsey pointed to missteps in how the company has targeted customers and deployed its marketing dollars, saying the focus now is on improving effectiveness rather than maintaining or increasing spend.
As he put it, the goal is making sure marketing “is translating into demand and returns.”
He also emphasized that while overall marketing costs may come down, the company is still investing in stronger teams and capabilities behind the scenes. Kempa reinforced that idea, noting Norwegian has likely been overspending compared to competitors without seeing the same payoff, and is now shifting toward a more disciplined approach.
Kempa shared:
“It’s about putting the dollars to work in the right places versus volume… I think we’ve been spending probably 2x on a per bed basis. It’s about effectiveness, and that’s what we’re focused on going forward.”
This shift comes at a time when Norwegian is still trying to define its position in the market. The company has leaned into a more premium message, but the onboard experience and pricing structure haven’t always fully supported that positioning. When the brand message and the product don’t fully align, marketing becomes harder to execute.
Norwegian wants more families onboard
Another interesting point from the earnings call was occupancy. Norwegian isn’t just focused on charging higher prices, but it’s also trying to fill ships more efficiently.
Kempa said the goal is to eventually exceed historical occupancy levels by making better use of existing cabins, particularly those that can accommodate more than two guests.
This includes a renewed focus on adding third and fourth passengers, which typically means attracting more families onboard. These guests help increase total occupancy without requiring additional ships or cabins, making them one of the most efficient ways to improve overall performance.
This ties back to a notable shift in how Norwegian is thinking about demand. Leadership acknowledged that families are a key segment the company hasn’t been targeting as effectively in recent years, and bringing them back into the mix is part of rebuilding the booking curve.
For cruisers, this could show up in more targeted marketing and increased promotions for third and fourth guests. This focus also aligns with how the company is rebuilding demand around key destinations.
Leadership pointed to the Caribbean and Great Stirrup Cay as important drivers, suggesting itineraries tied to the island may play a larger role in attracting families and group travel going forward.
A tough summer ahead in Europe and Alaska
Two areas where Norwegian is facing the most pressure are Europe and Alaska, with Europe being the biggest near-term challenge.
The region makes up a large portion of Norwegian’s deployment, about 26% in the second quarter and roughly 38% in the third quarter. Unfortunately, this puts a large portion of its capacity in play during the peak summer season.
Because of this, Kempa said the third quarter is expected to be “significantly weaker” than the second, and there’s even a scenario where yields could fall into the high single digits during that period.
Moreover, leadership pointed to geopolitical tensions and broader uncertainty, particularly given how much of Norwegian’s European business depends on North American travelers.
“Given how much of our business we source from the U.S. for our European itineraries… the Iran war has a much bigger impact on us than some of our competitors,” Chidsey said.
But another big issue is internal timing. During the earnings call, Kempa stated that Norwegian was already behind the booking curve, which has been exacerbated by the war.
This combination has created a perfect storm for Norwegian, with more inventory still open late in the booking cycle.
At the same time, there are signs of declining demand, including elevated cancellations in Europe. As a result, Norwegian has less flexibility on pricing and fewer levers to pull as the season approaches.
Alaska is also seeing weaker-than-expected demand, though it wasn’t a primary focus of the call. Even still, this adds to the pressure on summer itineraries, particularly as the company works to rebuild its booking curve across multiple regions at the same time.
Caribbean demand depends heavily on Great Stirrup Cay
The Caribbean was another key focus of the call, largely because many of Norwegian’s recent challenges in the region were self-inflicted.
Earlier this year, the cruise line shifted a significant amount of capacity into the Caribbean. But that move came before the supporting strategy was fully in place.
Kempa said, “We did have a large Caribbean deployment shift this year, and we were very frank on our last call that we did not have the right tools in place. We didn’t have our marketing in place. We just, we didn’t have our island in place.”
Norwegian increased Caribbean capacity by roughly 40% in the first quarter of 2026, but leadership acknowledged that the rollout lacked coordination across key areas like marketing, pricing, and product.
A big part of that gap comes down to timing. The company only recently began actively marketing Great Stirrup Cay, which is expected to play a major role in driving Caribbean demand.
“We’ve now launched the marketing of our island in the last week or two, so we’re hopeful that that’s gonna start to improve demand generation…We believe in the Caribbean, we think it’s gonna be a good market for us, but we have to have the right tools in place,” Kempa said.
Those “tools” include not just marketing, but also the completed build-out of Great Stirrup Cay. While early upgrades to the island have already improved guest satisfaction, the biggest revenue-driving features, including the new water park, are still set to open later this year.
Until then, Norwegian is operating in a transitional phase. The capacity is already in place, but the full experience that’s meant to support higher demand and pricing hasn’t fully come online yet.
At the same time, executives pointed out that once guests are actually onboard, spending remains strong.
“Once we have our guests on the vessels, we’re actually seeing healthy onboard spend… it’s a matter of getting the guests on board,” Kempa said.
Great Stirrup Cay will become one of Norwegian’s most important assets
One of the most consumer-facing updates from the call involved Great Stirrup Cay, Norwegian’s private island in the Bahamas. Chidsey said the Great Tides Water Park remains on track to open later this summer and called it a demand driver for 2027.
“This water park will be a demand driver moving into 2027. It will elevate the island’s offerings and enhance the guest experience.”
Kempa later explained how the cruise line trusts the island will generate incremental yields, not just from the purchases ashore, but also with higher cruise fares due to increased demand.
Great Stirrup Cay is central to Norwegian’s turnaround strategy. The cruise line has lagged behind competitors in turning private destinations into major booking drivers, and it’s now trying to close that gap.
Earlier this year, Norwegian acknowledged that its Caribbean expansion moved ahead before the supporting infrastructure and commercial strategy were fully in place. Now, the focus has shifted to building demand around the island itself by positioning Great Stirrup Cay as a key reason to book.
Norwegian’s bundled airfare program could change
Norwegian also said it is reevaluating its bundled air program. The company’s bundled airfare program allows cruisers to book flights directly through the cruise line, typically as part of a package that includes the cruise fare. It’s designed to simplify travel planning and is often marketed as a convenient, all-in-one option.
But executives said the program hasn’t always worked as intended from a financial standpoint. Chidsey noted that it has often functioned more like a promotional tool than a profitable one, adding that it “hasn’t always delivered returns commensurate with its cost.”
That does not mean Norwegian’s air program is disappearing. But it does suggest the company may become more selective with how it uses airfare as a booking incentive.
Some travelers have also pointed to alleged updates to Norwegian’s bundled airfare program, based on revised terms circulating online.
According to those details, the BOGO airfare offer may now come with tighter restrictions, including a requirement to book air between 220 and 330 days before sailing. The offer is also said to exclude certain cabin categories, including suites, Haven, and guarantee bookings.
In addition, eligibility appears to be more limited geographically. The promotion may now only be available from select departure cities and exclude several longer-haul or “exotic” regions, including Africa, Asia, Australia, the Middle East, New Zealand, South America, and the South Pacific.
