Kevin Sheehan Resigns

[swedish weave]

We should just keep our fingers crossed and hope the back story is not a

"Canary Swallows the Cat".

 

If Regent & Oceania cruise lines were purchased by NCL so Regent and Oceania could gain access to NCL's piggy bank (Star Cruises/Apollo Management) it would not bode well for NCL, its stockholders or customers.

 

The financials of these companies are so tangled it is nearly impossible to determine which is the cat and which is the canary. See below !!

 

(Prestige Cruise Holdings

Prestige Cruise Holdings is the parent company of

Oceania Cruises and Regent Seven Seas Cruises. Formed in 2007 to manage select assets in Apollo Management's cruise investment portfolio, PCH is led by Chairman and CEO Frank Del Rio, the founder of Oceania Cruises. PCH is the market leader in the upper-premium and luxury segments of the cruise industry with nearly 6,500 berths between the Oceania Cruises and Regent Seven Seas Cruises brands.)

 

It is obvious that Apollo is driving this deal, but I also have questions about their goals.

 

I see a correlation between the current events and the past performance of Del Rio.

Edited January 25, 2015 by swedish weave

[njhorseman]

Regent and Oceania did not need NCL's "piggy bank" -- they were/are doing just fine -- all of their ships are in top shape and running full on most itineraries. Remember -- it was NCL that wanted Regent and Oceania - not the other way around.

 

I do understand the apprehension of some NCL passengers. It was only a month or so ago when Regent and Oceania passengers were wondering how in the world someone with a mainstream cruise background (Sheehan) could run a upscale cruise lines.

 

It wasn't NCL driving the deal. It was Apollo Management and TPG Capital, which held the controlling interest in both NCLH and PCH and still control NCLH after the acquisition. Apollo/TPG had already started the process of taking PCH public, but they apparently realized it was quicker, easier and likely better for their bottom line for NCLH, which was already public, to "acquire" PCH, rather than creating a separately traded company.

 

At the very least there's the potential for substantial savings in corporate office administrative expenses that will be obtained by combining certain functions, as well as a likely savings in the purchase of consumables like food and fuel that the purchasing power of the larger merged company will bring.

Edited January 25, 2015 by njhorseman

[swedish weave]

The list of the upper management of Oceania shows that the companies have worked together for some time. Note that some of them have a history also with Renaissance.

 

http://www.oceaniacruises.com/corporate/executiveteam.aspx

[njhorseman]

The list of the upper management of Oceania shows that the companies have worked together for some time. Note that some of them have a history also with Renaissance.

 

http://www.oceaniacruises.com/corporate/executiveteam.aspx

 

That page reflects the post merger management consolidation. People like Crane Gladding and Andy Stuart did not perform these functions for the PCH cruise lines prior to the merger...they worked strictly for NCL.

 

But remember...the same two companies, Apollo Management and TPG Capital controlled both NCLH and PCH prior to the acquisition/merger and still control NCLH today, so at the highest level...the board of directors, it's still the same companies and their appointed directors exercising control before and after.

Edited January 25, 2015 by njhorseman

[WildcatRock]

I've been an avid reader of this thread and appreciate the back and forth dialogue as it's been fascinating and educational. I have a question - I have been in banking my entire career and have seen the investment activities of private equity companies such as Apollo and TPG. Many times these companies will sell their holdings to realize their return on their investment. Any concern that Apollo/TPG pushed for the merger of Prestige and NCLH to set the combined entity up for sale at some point in the future? Or is it your belief that the combined Prestige/NCLH will be a long-term hold for Apollo/TPG as they believe their return on the publicly traded stock will be sufficient for them?

 

Sent from my XT1080 using Forums mobile app

[swedish weave]

I've been an avid reader of this thread and appreciate the back and forth dialogue as it's been fascinating and educational. I have a question - I have been in banking my entire career and have seen the investment activities of private equity companies such as Apollo and TPG. Many times these companies will sell their holdings to realize their return on their investment. Any concern that Apollo/TPG pushed for the merger of Prestige and NCLH to set the combined entity up for sale at some point in the future? Or is it your belief that the combined Prestige/NCLH will be a long-term hold for Apollo/TPG as they believe their return on the publicly traded stock will be sufficient for them?

 

Sent from my XT1080 using Forums mobile app

 

That is a hard question, but it appears they are creating a massive amount of debt for NCL and some of the activities seem to parallel the events that led up to the demise of Renaissance. Some of the same people are involved. NCL's debt equity ratio is pretty high.

 

It also appears that the deal with Prestige and NCLH was a transaction within Apollo.

 

The previous article I posted shows that Apollo created Prestige in 2007 to manage some of their assets.

Edited January 25, 2015 by swedish weave

[Travelcat2]

You have a intriguing view of the situation. But, to be honest, I've always wondered what, if any, is the secret agenda of Star Cruises and Apollo managment.

 

I sincerely, hope you're correct.

 

As far as upscale is concerned, I had to laugh when I read an article on the huge 3700 sf suite on Regent's 7 Seas Explorer, now under construction.

 

I've been fortunate enough to have spent a combined month at sea in one of NCL's 7500sf Garden Villas. They make the 7 Seas Explorer biggie look like a Mini-Suite. LOL

 

John

 

Agree that there are some interesting ties between Apollo, Regent, Oceania and NCL (to be honest, I have no idea how Star Cruises fits into the scenario -- never heard of them prior to NCL purchasing Prestige Cruise Holdings). It is surprising how little most Regent/Oceania customers know about NCL and visa versa.

 

Did you also read the price of the Seven Seas Explorer "Explorer Suite"? As I recall, it is $5,000 per day per person! Wow! Mainstream cruise lines have always had larger top suites than luxury lines. After all, look at the size of a Regent ship compared to a NCL ship. We were docked near a NCL ship recently...... the Regent ship looked like a tender for NCL -- it seemed that small.

 

In terms of the management changes that have occurred in the past month, I truly do not believe that this was the original plan (i.e. purchasing PCH, naming Mr. Sheehan as CEO then having him resign and Mr. Del Rio take over). It does not make sense. FDR (Mr. Del Rio) was only committed to staying on as CEO of Regent and Oceania until the end of this year. IMO, something major happened to change the plans.

 

As is obvious from my signature, we are Regent customers. When PCH purchased Regent seven years ago, we were very apprehensive about the new parent company and about FDR. After all, he was running a premium plus cruise line and we questioned if he had a clue what Regent passengers were looking for (usually different than what Oceania passengers look for). He didn't forge ahead changing everything like a bull in a china shop. Instead, he spent time learning about Regent. There were changes -- some better than others. Some Regent customers left for other luxury lines while customers from other luxury lines moved over to Regent. Over the seven years, FDR has earned respect from passengers, the crew and officers of Regent and has turned Regent into a profitable company.

 

IMO, all three cruise lines will do quite well in the future. We just need to be patient and watch.

[Uniall]

Agree that there are some interesting ties between Apollo, Regent, Oceania and NCL (to be honest, I have no idea how Star Cruises fits into the scenario -- never heard of them prior to NCL purchasing Prestige Cruise Holdings). It is surprising how little most Regent/Oceania customers know about NCL and visa versa.

 

Did you also read the price of the Seven Seas Explorer "Explorer Suite"? As I recall, it is $5,000 per day per person! Wow! Mainstream cruise lines have always had larger top suites than luxury lines. After all, look at the size of a Regent ship compared to a NCL ship. We were docked near a NCL ship recently...... the Regent ship looked like a tender for NCL -- it seemed that small.

 

In terms of the management changes that have occurred in the past month, I truly do not believe that this was the original plan (i.e. purchasing PCH, naming Mr. Sheehan as CEO then having him resign and Mr. Del Rio take over). It does not make sense. FDR (Mr. Del Rio) was only committed to staying on as CEO of Regent and Oceania until the end of this year. IMO, something major happened to change the plans.

 

As is obvious from my signature, we are Regent customers. When PCH purchased Regent seven years ago, we were very apprehensive about the new parent company and about FDR. After all, he was running a premium plus cruise line and we questioned if he had a clue what Regent passengers were looking for (usually different than what Oceania passengers look for). He didn't forge ahead changing everything like a bull in a china shop. Instead, he spent time learning about Regent. There were changes -- some better than others. Some Regent customers left for other luxury lines while customers from other luxury lines moved over to Regent. Over the seven years, FDR has earned respect from passengers, the crew and officers of Regent and has turned Regent into a profitable company.

 

IMO, all three cruise lines will do quite well in the future. We just need to be patient and watch.

 

You keep piquing my curiosity.

 

What were (are) the differences between Regent and Oceania product and passengers' desires?

 

John

[Travelcat2]

You keep piquing my curiosity.

 

What were (are) the differences between Regent and Oceania product and passengers' desires?

 

John

 

Don't want to take this thread off topic but will try to respond briefly. On luxury cruise lines, there is no "class" system. This is a big difference IMO. Certainly people pay more for larger suites - receive benefits within the suites (butlers, etc.) but, once you walk outside the door of your suite, everyone is treated the same. While being all-inclusive does not make Regent luxury, you do not have to show your room key while on the ship (unless you are embarking, disembarking or purchasing something). So, when you walk into a lounge or restaurant, no one knows (or cares) if you are in the largest suite on the ship or the smallest. Everyone is equal (or as much as one can be). A downside to being all-inclusive is that you are paying for things that you do not necessarily want (alcohol and excursions, for instance).

 

Regent customers enjoy the quiet luxury of the ships (emphasis on "quiet") While this might sound as if only older people would appreciate this, you might be surprised. With the hectic lives many of us lead, it can be refreshing to be on a laid back ship with most of your needs being attended to.

 

Luxury travelers, for the most part, want small ships. Regent's largest ships holds 700 passengers (the new one will hold 750). To us, Oceania's Riviera and Marina at approximately 1,250 passengers are huge.

 

Oceania passengers, on the other hand, seem to like everything ala carte. Many Oceania passengers set up their own excursions on Roll Call and certainly would not want included excursions. They do not mind that the time you board the ship depends upon what cabin category you are in. They have an Executive Lounge and Concierge Lounge that are available only to passengers in certain stateroom categories. On Oceania, few people buy the alcohol package ($60/day/person) and prefer to carry their own alcohol on board (Oceania is quite accepting of this).

 

Obviously I could go on and on about the differences between the two cruise lines. It is important to note that these are my opinions - based on sailing both cruise lines and reading thousands of comments and reviews on Cruise Critic.

 

To bring this back on topic (well sort of:-), Prestige Cruise Holdings did make some changes to Regent that were not well received. At one point they were going to have early boarding for passengers in the higher suites. There were many complaints on CC regarding this subject. Ultimately, this policy did not launch. PCH did put a policy in place where some passengers can book excursions and dining reservations early.

 

It is great that everyone has so many choices in cruise lines. NCL definitely sounds like a great choice for families. I've seen tours of a couple of the ships on television -- they are amazing. For us, the most important thing is that people are treated with respect. Someone staying in the most expensive suite is not a better person than someone staying in the least expensive suite. Everyone should be treated equally. IMO, this should be the case on all cruise lines -- not only luxury.

 

Okay -- getting off of my soapbox.

 

P.S. WildcatRock brought up a good point. I do think that Apollo will eventually sell off the combined entity. Note: This opinion is based purely in intuition:-)

Edited January 26, 2015 by Travelcat2

[Uniall]

Don't want to take this thread off topic but will try to respond briefly. On luxury cruise lines, there is no "class" system. This is a big difference IMO. Certainly people pay more for larger suites - receive benefits within the suites (butlers, etc.) but, once you walk outside the door of your suite, everyone is treated the same. While being all-inclusive does not make Regent luxury, you do not have to show your room key while on the ship (unless you are embarking, disembarking or purchasing something). So, when you walk into a lounge or restaurant, no one knows (or cares) if you are in the largest suite on the ship or the smallest. Everyone is equal (or as much as one can be). A downside to being all-inclusive is that you are paying for things that you do not necessarily want (alcohol and excursions, for instance).

 

Regent customers enjoy the quiet luxury of the ships (emphasis on "quiet") While this might sound as if only older people would appreciate this, you might be surprised. With the hectic lives many of us lead, it can be refreshing to be on a laid back ship with most of your needs being attended to.

 

Luxury travelers, for the most part, want small ships. Regent's largest ships holds 700 passengers (the new one will hold 750). To us, Oceania's Riviera and Marina at approximately 1,250 passengers are huge.

 

Oceania passengers, on the other hand, seem to like everything ala carte. Many Oceania passengers set up their own excursions on Roll Call and certainly would not want included excursions. They do not mind that the time you board the ship depends upon what cabin category you are in. They have an Executive Lounge and Concierge Lounge that are available only to passengers in certain stateroom categories. On Oceania, few people buy the alcohol package ($60/day/person) and prefer to carry their own alcohol on board (Oceania is quite accepting of this).

 

Obviously I could go on and on about the differences between the two cruise lines. It is important to note that these are my opinions - based on sailing both cruise lines and reading thousands of comments and reviews on Cruise Critic.

 

To bring this back on topic (well sort of:-), Prestige Cruise Holdings did make some changes to Regent that were not well received. At one point they were going to have early boarding for passengers in the higher suites. There were many complaints on CC regarding this subject. Ultimately, this policy did not launch. PCH did put a policy in place where some passengers can book excursions and dining reservations early.

 

It is great that everyone has so many choices in cruise lines. NCL definitely sounds like a great choice for families. I've seen tours of a couple of the ships on television -- they are amazing. For us, the most important thing is that people are treated with respect. Someone staying in the most expensive suite is not a better person than someone staying in the least expensive suite. Everyone should be treated equally. IMO, this should be the case on all cruise lines -- not only luxury.

 

Okay -- getting off of my soapbox.

 

P.S. WildcatRock brought up a good point. I do think that Apollo will eventually sell off the combined entity. Note: This opinion is based purely in intuition:-)

 

Thank you for your insights. By the by, I don't think the commentary is off topic one iota.

 

Prior to Kevin Sheehan's unexpected rapid departure, Regent & Oceania passengers were probably concerned what negative effect NCL would have on them. Now, with Frank Del Rio at the helm, the shoe is on the other foot.

 

John

[newmexicoNita]

Lets just hope this is a good not bad move. Remember, just because a website advertises up to X % off a cruise doesn't mean one thing: that could be one cruise, it could be a dozen, it could mean one catagory and the secret words here are : up to. All I can say is: NCL stock is doing very well the past month or so.

[njhorseman]

Lets just hope this is a good not bad move. Remember, just because a website advertises up to X % off a cruise doesn't mean one thing: that could be one cruise, it could be a dozen, it could mean one catagory and the secret words here are : up to. All I can say is: NCL stock is doing very well the past month or so.

 

No, NCLH stock has declined this month. It closed at $48.03 on Dec 29, and $46.76 on Dec. 31, 2014. It closed at $45.20 on Jan 9, 2015, the day Sheehan's retirement was announced, and closed today, Jan 26 at $46.05. So, it's down almost $2 per share since Dec 29 .

[Beaver1975]

And with this announcement Andy Stuart realizes he has reached his personal career ceiling at NCL....

 

Not so fast!!

[www3traveler]

I just checked the price of stock as of a few minutes ago was $50.52.

[ohioNCLcruiser]

Not so fast!!

 

I'm thrilled to say I was wrong! Congrats to him!

[Hikini]

I think he wanted to axe the snow room on the new ship and they said no:p

 

He did a wonderful job and will be missed. Sorry to see him go....

 

And he did a great job on the Undercover Boss show. I wish him well.

[linwood77]

As reported on Seatrader,Kevin Sheehan has resigned to be replaced by Frank Del Rio.

Will they have to rename the bars?

 

It has happened again! Andy Stuart is now the President and CEO. Will the pub now be called "O'Stuart's"? Here is the article posted here on Cruise Critic today.

 

http://www.cruisecritic.com/news/news.cfm?ID=6221

Edited March 4, 2015 by linwood77
Added Title

[Uniall]

Andy

 

Congratulations, Mr. President

 

This is a well deserved promotion for you, a grand day for NCL, and a day of celebration for NCL customers.

 

I've started my celebration with this song: https://www.youtube.com/watch?v=UH01FhqMdc8

 

John

 

Edited March 4, 2015 by Uniall

[linwood77]

It has happened again! Andy Stuart is now the President and CEO. Will the pub now be called "O'Stuart's"? Here is the article posted here on Cruise Critic today.

 

http://www.cruisecritic.com/news/news.cfm?ID=6221

 

Sorry!!! I just gave Andy Big promotion LOL! He is now the President and COO of Norwegian Cruse Line. Not the CEO :D

[Cruiser Bruiser]

Andy

 

Congratulations, Mr. President

 

This is a well deserved promotion for you, a grand day for NCL, and a day of celebration for NCL customers.

 

I've started my celebration with this song: https://www.youtube.com/watch?v=UH01FhqMdc8

 

John

 

 

Good move, FDR. Replacing Mr. Olive Garden with Mr. NCL seems like a no-brainer.

[swedish weave]

Sorry!!! I just gave Andy Big promotion LOL! He is now the President and COO of Norwegian Cruse Line. Not the CEO :D

 

Don't apologize !!!! Go ahead and promote Andy !!!

[littlelulu01]

Kevin Sheehan just sent me a welcome aboard packet and letter he signed as CEO on behalf of the entire ncl team.;)

[Kim White]

After all these changes with NCL, Do you still feel this new CEO is doing a better job? Gratuities went from $12.00 in Jan to $12.95 to $13.50 within 9 months. Specialty restaurants went up and already add there 18% tip, drinks 15% each drink for tip. Now I know NCL pays these workers next to nothing and I always pay extra, but I feel like it should be my decision to tip and how much not the cruise line. Sadly, we usually tip more than NCL and the staff still gets less money. Our steward, who always is good, we slip him a little for himself because he does all the work. Except our last cruise. We had a woman steward, and she was terrible. My hubby didn't want to tip her at all, but we only gave her half of what we have given past stewards. She might have a sick husband or kids we don't know her story, maybe she's new. We cruise again next month same cabin. If we get the same steward, I'm going to request you delete my gratitude or give me another steward. We prepaid everything and choice the UBP but once we signed in when they took our picture, we were told we would have to go to the front desk to get it corrected. They also charged us a $13.50 service fee daily when we prepaid in Jan when the rate was still $12.00. We didn't want to go over our credit limit so we had to cancel our dinner at a special restaurant because of these $13.50 times 7 days times 2 and if you don't give the restaurant 24 hours notice, they still charge you. Kevin Sheehan was a great leader.

[Travel Junkie Judy]

After all these changes with NCL, Do you still feel this new CEO is doing a better job? Gratuities went from $12.00 in Jan to $12.95 to $13.50 within 9 months. Specialty restaurants went up and already add there 18% tip, drinks 15% each drink for tip. Now I know NCL pays these workers next to nothing and I always pay extra, but I feel like it should be my decision to tip and how much not the cruise line. Sadly, we usually tip more than NCL and the staff still gets less money. Our steward, who always is good, we slip him a little for himself because he does all the work. Except our last cruise. We had a woman steward, and she was terrible. My hubby didn't want to tip her at all, but we only gave her half of what we have given past stewards. She might have a sick husband or kids we don't know her story, maybe she's new. We cruise again next month same cabin. If we get the same steward, I'm going to request you delete my gratitude or give me another steward. We prepaid everything and choice the UBP but once we signed in when they took our picture, we were told we would have to go to the front desk to get it corrected. They also charged us a $13.50 service fee daily when we prepaid in Jan when the rate was still $12.00. We didn't want to go over our credit limit so we had to cancel our dinner at a special restaurant because of these $13.50 times 7 days times 2 and if you don't give the restaurant 24 hours notice, they still charge you. Kevin Sheehan was a great leader.

 

I agree.

 

I feel like we are being nickeled an dimed.

I see these execs sitting at a big table brainstorming......

Who can think of the best way to hit the passengers with little added fees?

 

Raise the price here, raise the price there....raise it again...AND the cruises are more expensive.

 

They have to be saving a bundle with the cost of oil and I do not see them passing it along....

Kevin, I wish you were here........

[Kim White]

Hi Judy, We meet you last year on the Dawn Oct 31st to Nov 7th. Such a pleasure meeting you. We went Labor Day weekend this year and going again next Friday. I'm hoping things will be correct. After this cruise we will be on the Pearl. The Escape looks exciting, and want to book, but I'm gonna wait and see how service is after this cruise.

Hope your doing well :D