Staying Small Fuels Norwegian Cruise Line's Growth

Norwegian Cruise Line is just fine with third place.

In the cruise industry, big can be downright awful financially, says Kevin Sheehan, president and chief executive of Norwegian. The third-largest cruise operator has a diminutive fleet—just 13 ships, with two more on order—that helps keep the focus on holding the line on prices.

Most large cruise lines consider their product an underpriced bargain for vacationers, yet prices reliably fall as the industry strives to fill every berth on every voyage. Getting people on the boat is key to selling them alcohol, upscale dining, shore excursions, and additional items with healthy profit margins. At Norwegian, on-board spending accounts for nearly one-third of revenue. Carnival, the industry leader, has more than 100 ships—and filling them all makes it harder to keep prices firm. Read more...