Holdings of Norwegian Cruise Line: Laser-focused on cost management

According to Mark Kempa, CFO of Norwegian Cruise Line Holdings, the company has committed to saving $300 million by 2021.

“Let me be clear: Cost management is our top priority,” Kempa said.

Ship operating costs will make up two-thirds of the savings, followed by marketing, selling, and administrative savings, as well as a new fuel purchasing program.

Kempa spoke at the company’s investor day held in New York on Monday. “We have created an internal transformation office who report directly to me to help and measure results.”.

Rather than accepting the status quo, they must challenge it and develop muscle to remove waste.

A cost-cutting strategy, Kempa explained, will be to slash waste, improve business practices and invest where it counts, all while delivering an excellent product and protecting the equity of all three NCLH brands.

Changing the culture is the first step. When you change the culture, your teams are empowered both to bring forward ideas and to effect change.

In the short term, reducing would be easy but in the long run, it would not be beneficial.

In Kempa’s words, “we continue to demonstrate that we can change the culture and reduce our unit costs.”.

As the plan develops, he will continue to provide real-time reporting and pivot as needed.

Kempa stated, “Measurement is the key to managing.”.