FORT LAUDERDALE -- At its Investor Day in May, Norwegian Cruise Line Holdings introduced a term: ROEx, short for return on experience. It means delivering experiences that customers want in an efficient way.
In an on-stage discussion at CruiseWorld on Friday, Travel Weekly editor in chief Arnie Weissmann asked the man who came up with that term, NCLH CEO Harry Sommer, to elaborate on ROEx.
Sommer began by explaining the different philosophies of two previous CEOs, Kevin Sheehan and Frank Del Rio. He called Sheehan "a CFO by trade" who focused on ROI, or return on investment. His philosophy was to "spend a penny here and get two pennies back," Sommer said. Del Rio, who Sommer called his mentor, focused on delivering "fantastic experiences for guests, and that's great, but sometimes we were delivering fantastic experiences that guests didn't necessarily want."
Sommer's example was the sculpture garden on the Norwegian Prima, a Norwegian Cruise Line ship that debuted in 2022. Del Rio was passionate about the art and decor aboard the ships sailed by Oceania Cruises, a cruise line he co-founded, and he brought that passion to the Norwegian Prima. "While it's really pretty, the Norwegian Cruise Line guest didn't necessarily appreciate that experience," Sommer said.
Now, NCLH aims to "focus on providing guests with experiences that they value," which combines the best of the Sheehan and Del Rio philosophies, Sommer said. And so, return on experience (or ROEx, pronounced ar-oh-ex) is being applied to food, entertainment, amenities, destinations, excursions -- any experience or amenity that touches the guest. The company uses data from guest satisfaction scores to help uncover what guests are willing to pay for.
Sommer recalled that in his first week as CEO, about a year-and-a-half ago, he asked the head of hotel operations for a list of all the meals that guests ordered, a request that drew a surprised reaction.
"He said, 'No one's ever asked me for this,'" Sommer said. "Well, if we serve meals that guests don't want, then let's stop preparing them, because it just adds waste into the system and distracts us from better preparing the meals that guests do want."
Sommer says the ROEx philosophy is working, as shown by guest satisfaction scores, which are "the highest they have ever been across all three brands."
He called the company's record financial results "the cherry on top."