Norwegian Cruise Line Holdings, parent company of NCL, Oceania Cruises and Regent Seven Seas Cruises, terminated nine percent of its shoreside workforce earlier this week, according to the Miami Herald.  NCL did not explain why it was necessary to terminate nearly a tenth of its employees, particularly during the holiday season. Meanwhile, NCLH promoted its CEO’s son to a lucrative position (see below) as president of a NCLH brand, Oceania Cruises.

NCL released a conclusory and gobbledygook statement that it took “several prudent actions across our business to align with our strategic priorities.”

The Miami Herald referred to NCL’s SEC filing which said that “cost minimization initiatives” in order to achieve “sustained, profitable growth” were what caused the layoffs.

Cruise Industry News said NCLH has over 3,500 full-time shoreside employees (per its 2021 Environmental Report), meaning layoffs could total over 300 employees.

The Rich Get Richer

The Miami Herald pointed out that “Frank Del Rio, NCLH CEO (photo above), has come under fire in recent years for his salary.” Reuters reported that there was “rising opposition” to CEO Del Rio’s high pay pay tied to “questionable practices.”

“While the industry was in crisis and laying off thousands of workers during the pandemic as the company lost up to 150 million dollars a month, Del Rio made $36.4 million in 2020. He took in $22.6 million in 2021.”

CEO Del Rio (senior) is by far the highest paid cruise executive in the world. Including his compensation in 2015 of nearly $31,000,000, he had earnings of over $129,000,000 for a five year period, including $22,590,000 in 2018, $17,808,000 in 2019, $36,400,000 in 2020 and $22,600,000 in 2021.

As Skift revealed, Del Rio’s exorbitant income is over 1,000 times more than the median wage at NCL of $19,319.

In 2021, the New York Times included Del Rio (senior) in an article titled “C.E.O. Pay Remains Stratospheric, Even at Companies Battered by Pandemic” where it wrote:

“Norwegian Cruise Line barely survived the year. With the cruise industry at a standstill, the company lost $4 billion and furloughed 20 percent of its staff. That didn’t stop Norwegian from more than doubling the pay of Frank Del Rio, its chief executive, to $36.4 million.”

Like Father Like Son

While NCL was unceremoniously terminated thousands of its employees, it announced that Del Rio’s son, 44-year-old Frank Del Rio Jr., was promoted to president of Oceania Cruises. To make way for Del Rio’s son, the current president of Oceania, Howard Sherman, will be replaced and will assume the position of what NCLH is calling a “special advisor.”

Frank Jr.’s employment contract is attached and provides:

  • Base annual salary of  $500,000.00;
  • Incentive bonus;
  • Equity award;
  • Retirement, Welfare and Fringe Benefits;
  • Medical Executive Reimbursement Plan;
  • Cash car allowance of $1,500.00 per month / $18,000 per year; and
  • Paid vacation of four (4) weeks  per year and “all other holiday and leave pay generally available to other similarly situated executives of the Company.”

Skift reported this summer that Del Rio Sr.’s “car allowance alone was (a whopping) $27,600″ ($2,300 a month).”  The new cruise executive Del  Rio (Junior) also stands to collect many millions of dollars in incentive bonuses and equity awards in addition to his $500,000 salary.

NCL Jacks Up Its Service  Fees 

Earlier this month, we reported that NCL is drastically increasing its service charges by an unprecedented 25% for most cabins, effective January 1, 2023. NCL’s guests staying in The Haven and other suites will face a $5 increase to a whopping total of $25 per person per day.

Del Rio senior has developed a reputation of being a greedy cruise tycoon who has gouged its customers before, with extra higher charges, including increased room services charges, automatic gratuities, restaurant cover charges, service fees for continental breakfast room service, and every other imaginable expense that customers could possibly be “nickeled and dimed” for.

Even the regular cruise bloggers and cruise cheerleaders like The Points Guy (Gene Sloan) are calling NCL’s latest fee hike “unprecedented” and “enormously” high. Mr. Sloan writes:

“With the increase, a family of four staying in a suite will pay a cool $700 in service fees during a typical seven-night cruise — a level never before seen in the cruise business.”

The popular @CruiseGuy (Stewart Chiron) tweeted “YIKES!” NCL “to further hike cruise service charges to levels never before seen in cruising.”

The Crew Members Continue to Get Screwed

A portion of the money generated on NCL’s cruise ships by the increased fees will go toward non-tip earners (like kitchen staff, cleaners, etc.) to defray the wages that NCL pays. And some of the fees described by cruise cheerleaders as “unprecedented” and “enormously” high fees will go toward NCL’s profits and executive salaries, as I explained in NCL Increases Service Fees Again – But Will NCL’s Crew Remain Underpaid While CEO Del Rio Continues to be Paid an Average of $25,000,000 a Year?

Tis the Christmas Season (Bah Humbug?)

For hundreds of fired NCL shoreside employees, it will be a bleak holiday season. But for the Del Rios, junior and senior, they can begin to think about what luxury cars to lease with their $3,800 a month (more than $45,000 a year) car allowances, which is several times greater than the mean NCL compensation of just $19,319.

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Image Credit: Frank Del Rio (senior) – Mark Elias/Bloomberg via Getty Images and Storify.