I was looking at a photo of a modern
cruise ship this morning, one of
those massive aerial shots where
the ship just looks like a white
skyscraper tipped on its side. Oh
yeah, the drone shot. Right, exactly.
And usually when you look at those,
you just see a vacation, right?
You see the pool deck, maybe a water
slide, the buffet line. A giant
floating hotel. Exactly. But looking
at the news coming out of the industry
just this week here in February
2026, I'm seeing something completely
different. I am seeing a machine
that is basically fighting a war
on three different trunks simultaneously.
And honestly, the passengers, you're
just along for the ride. That is
a much more accurate, if slightly
terrifying way to view it. Yeah.
Because it really isn't just a hotel
anymore. No. It is a piece of heavy
industrial machinery. And right
now, it's fighting a battle against
obsolescence, so we're Asian steel.
It's fighting a battle against nature,
which we saw violently in the Mediterranean
this week. Yeah, that was wild.
And perhaps most viciously right
now, it is fighting a battle inside
the corporate boardroom over what
the actual soul of this industry
looks like. And that is exactly
the mission for this deep dive.
We have these three stories that
on the surface, they look completely
disconnected. You have a ship getting
a makeover and a Singapore dry dock.
You have a storm messing up Valentine's
Day plans in Europe and a CEO getting
fired in Miami. Right. But our job
today is to connect those dots for
you. We want to figure out how the
Masaju book on Deck 12 is actually
determined by cutthroat financial
strategies happening 10 years prior.
It really is the entire ecosystem
of cruising. You've got the product,
the operation, and the business.
And frankly, all three are under
immense stress right now. So let's
start with the product. We are zooming
in on the Carnival encounter. Right
now, as we speak, this ship is sitting
in a dry dock in Singapore. It went
in on February 3rd, and it isn't
coming out until March 5th. A solid
month. Right. Now, first off, for
anyone listening who thinks a dry
dock is just, I don't know, a parking
spot, paint a picture for us. What
is actually happening in there?
Well, think of it less like a parking
spot and more like open heart surgery
combined with a frantic home renovation
show. That sounds chaotic. It is.
The ship is lifted entirely out
of the water. Which is critical
because it allows them to work on
the hull and the propulsion systems,
but it's also the only time they
can do massive structural changes
without passengers underfoot. Because
you can't exactly rip up the LIDO
deck while people are trying to
tan. Exactly. And for the Carnival
Encounter, this is desperate, necessary
work. because this ship was built
in 2002 2002 okay so in car years
that's a classic but in ship years
where the new vessels are basically
floating spaceships that's well
that's geriatric isn't it it is
what the industry politely calls
mature tonnage mature tonnage I
like that right so this used to
be the star princess then it was
the Pacific encounter for Pino Australia
and now it's joining the carnival
fleet okay But here is the fundamental
problem. You can't just run a 24
-year -old ship next to a brand
new mega ship that has, you know,
roller coasters and robot bartenders.
Right, because people will just
book the newer ship. The gap in
quality and the price you can charge
is just too wide. So you have to
reinvent the asset. You have to
make the old hardware feel like
new software. And looking at our
source material, the reinvention
here seems remarkably specific.
They aren't just slapping a roller
coaster on top or trying to force
a go -kart track onto a 2002 deck
plan. No, the structure couldn't
handle it anyway. Right, so instead
they're focusing heavily on wellness.
They're installing these Cloud 9
spa thermal suites. And I want to
dig into this because it feels like
a very intentional pivot. It is
the key insight of this entire dry
dock. Don't look at the spa as just
a luxury add -on or a place to get
a facial. Look at it as a pure revenue
strategy. They're adding saunas,
steam rooms, and specifically heated
thermal loungers. Heated thermal
loungers. I mean, I've been on one
and they are delightful. But why
is that specific piece of furniture
the strategic linchpin for a ship
like this? Because context is everything.
This ship is based in Brisbane.
It's serving the Queensland market.
And we have notes here from Anton
Loeb, the VP of Sales and Marketing
over there. He explicitly points
out that Queenslanders want luxury
regardless of the season. But wait,
Queensland is in Australia. Isn't
it basically always sunny? I just
picture surfing and beaches. Not
in July and August. Oh, right. Southern
Hemisphere. Exactly. That's their
winter. It gets brisk. So if you
rely entirely on outdoor pools and
waterslides, your onboard revenue
drops off a cliff when the temperature
drops because nobody wants to be
out on the Lido deck. That makes
total sense. But if you install
an indoor heated sanctuary, suddenly
you can command premium ticket prices
year round. You are effectively
weatherproofing the revenue of the
ship. Wow. That is incredibly smart.
It's monetizing the indoor space
to hedge against the outdoor weather.
It basically turns a seasonal asset
into a year -round cash cow. Exactly.
But they are doing exterior work,
too. The sources mention a new hull
livery, which I assume isn't just
for aesthetics. Livery is just ship
speak for the paint job and the
branding, right? Yeah. They are
giving it the red, white, and blue
Carnival hull. This is all about
brand consistency. When a family
walks down the pier, they shouldn't
feel like they booked the leftover
P &O ship. They need to feel like
they're on a real carnival ship.
Right. It's about setting expectations.
Exactly. They're also replacing
all seven Jacuzzi tubs. Seven? That
sounds like a massive plumbing nightmare.
I can't even get a plumber to fix
one sink in my house on a Tuesday,
let alone seven hot tubs on a ship
in a month. It's a massive undertaking.
And they're refreshing the twin
racer waterslides, updating the
basketball court with new hoops
and netting. It's all about removing
any kind of budget stigma from an
older vessel so they can charge
mainline prices. No, there is a
logistical nugget here that I found
really interesting. The ship is
in Singapore for the work, but you
said it lives in Brisbane. Right.
That's a long way to travel thousands
of miles with an completely empty
ship. That burns a lot of fuel for
zero profit. Which is exactly why
they don't run it empty. This is
the sheer efficiency of the industry
at work. They turn the delivery
trip into a repositioning cruise.
Oh, of course. It leaves Singapore
on March 5th and takes paying passengers
to Lombok, Vanoa in Bali, Cairns
and Darwin before it ever even arrives
in Brisbane. So they basically get
the passengers to pay for the gas
to get the ship home. Pretty much.
By March 20th, it's back in Brisbane,
refitted, rebranded and ready to
generate cash. That is the highly
controlled side of the industry.
It's basically a massive spreadsheet
exercise. You plan the drydock,
you book the contractors, you sell
the tickets. But let's pivot to
segment two, where those spreadsheets
just go completely out the window
because Mother Nature decides to
intervene. The operations side.
Right. We are moving from the controlled
drydock to the absolute chaos of
the Mediterranean, specifically
Valentine's Day weekend 2026. And
it sounds like this was less about
romance and roses and more about
holding on for dear life. Absolutely.
For a lot of passengers on MSC,
this was a very stark reminder that
they are, in fact, on a boat in
the open ocean. We had severe winter
storms slamming into the coast of
France. The sources mentioned the
mistral winds really kicking up.
Yeah, the data here shows wind gusts
over 40 knots on the 14th, topping
50 knots on the 15th. Now, for those
of us listening who don't sail,
Put that in perspective, is 50 knots
just really windy or is that actually
dangerous? 50 knots is force 10
territory on the Buford scale. It's
roughly 57 miles per hour. Wow.
Now, imagine a skyscraper, which
is essentially what the MSC World
Europa is. It has this massive surface
area. When a 57 mile per hour wind
hits the side of that ship, it creates
what we call a sail effect. So the
whole ship acts like a giant sail.
Exactly. It pushes the ship sideways
with immense uncontrollable force.
So trying to maneuver a 200 ,000
ton vessel into a narrow concrete
port like Marseille in those conditions
isn't just difficult, it's negligent.
You risk smelting the pier or worse,
breaching the hull of the ship.
So the captain makes the call. We
cannot dock in Marseille. Now, usually
when a ship ships a port, people
are annoyed because they miss their
wine tour or their lunch in town.
But the sources highlight that Misson
Marseille is a very specific type
of disaster because it's a turnover
port. Why is that distinction so
important? This is where the logistical
nightmare really begins. Most ports
you visit are transit ports. You
get off, buy a magnet, eat a crepe,
you get back on the ship. Right.
A turnover port is where the cruise
actually begins and ends for a huge
chunk of the passengers. So you
have thousands of people with their
suitcases waiting on the pier in
Marseille to board. And you have
thousands of people currently on
the ship who are desperately trying
to catch flights home from the Marseille
airport. Oh, wow. I didn't even
think about the flights. So if the
ship can't dock, you have people
stranded on the dock in the rain
and people trapped on the ship missing
their connections, the entire logistics
chain just snaps in half. Instantly.
And this is where we see the harsh
difference between the glossy brochure
and the reality of operations. MSC
had to divert immediately to find
safety. The MSC World Europa went
to Toulon, which is a naval port
about 40 miles away. It's much more
sheltered from the wind. OK, 40
miles isn't terrible. No. But the
MSC Splendida had it worse. It had
to go even further, about 130 miles
away de Villefranche -sur -Mer over
near Nice. So now you have your
passengers either 40 or 130 miles
away from where they parked their
cars or booked their outbound flights.
How did the cruise line handle that
chaos? Because I have to assume
the passengers were highly vocal
about this. They always are. And
this is where it gets really interesting
from a crisis management perspective.
The guest experience depended entirely
on which ship you happen to be on.
How so? Well, if you were on the
Splendida in Villefranche, 130 miles
away, the decision was binary. It's
simply too far to bus people back
and forth to Marseille for day trips.
So the company just said, automatic
refunds for your shore excursions.
Go rebook something local here in
Nice. Done. It was a clean break.
That makes sense. It's disappointing
for the guest, but it's clear communication.
But the World Europa was only 40
miles away and two on. That's tantalizingly
close. Right. And that proximity
caused what I call the friction
of uncertainty. The operations team
probably looked at the map and thought,
hey, it's only 40 miles. Maybe the
wind will die down. Maybe we can
secure enough buses to run people
down the highway. Oh, no. So they
didn't just cancel. Exactly. Instead
of a quick, clean refund, guests
were told to just wait for case
-by -case letters to be delivered
to their cabins. Which is honestly
the absolute worst thing you can
tell a passenger in a crisis. Just
wait. It completely removes their
agency. It perfectly illustrates
the decision matrix these companies
face every day. First, safety. Yeah.
You have to divert the ship. That's
non -negotiable. Right. Second is
revenue. Can we somehow save the
excursion money by busing them?
And third is guest satisfaction.
In this specific case, trying to
save the revenue or perhaps just
trying to salvage the original itinerary
might have actually hurt satisfaction
more because it left people in limbo.
It's a great example of the operational
resilience required, though, because
you can build the most advanced
ship in the world and the world
Europa is LNG powered, it's cutting
edge stuff. But if the wind blows
50 knots, you are still entirely
at the mercy of the elements. You
simply can't engineer your way out
of a hurricane force gust. You really
can't. And that feeling of being
at the mercy of forces you can't
control transitions us perfectly
to the biggest story of the week.
Because while the captains were
out there fighting the wind in the
Mediterranean, the executives at
Norwegian Cruise Line Holdings were
fighting for their jobs in Miami.
The boardroom. And this is the heavy
hitting financial stuff. On February
12th, 2026, Harry Summer was ousted
as the CEO of Norwegian Cruise Line
Holdings. A massive industry shaking
move. and he is being replaced by
John W. Chidsey. Okay, so I looked
up John Chidsey's resume when I
was reading the sources, and I actually
double -checked it because I thought
I had the wrong browser tab open.
I saw Subway and Burger King. Yes.
This guy isn't a cruise guy, he's
a fast food guy. You're reading
that entirely correctly. His executive
claim to fame is running massive
fast food franchises. Now, he has
been on the NCAA's board of directors
since 2013, so he certainly knows
the corporate structure of the company,
but he has never run a cruise line
operationally. He hasn't spent his
life dealing with shipyard dry docks
and mistral winds. This feels very
intentional. You don't hire the
Burger King guy if you want to focus
on artisanal, luxury, or bespoke
travel experiences. You hire him
to cut costs and streamline operations.
Precisely. This move is being heavily
driven by an activist investor group
called Elliott Investment Management.
They recently bought a 10 % stake
in the company, and they're effectively
walking into the boardroom and saying,
The party is over. But what is their
actual beef with Norwegian? Is the
company failing? I feel like I see
their commercials everywhere. It's
definitely not failing, but it is
lagging behind its peers. Elliott
is looking at something called the
yield gap. They compare Norwegian
to its two massive rivals, Carnival
Corporation and Royal Caribbean.
OK, let's look at those numbers.
In 2025, Carnival brought in record
revenue. nearly $27 billion. And
CLH, in its strongest quarter, did
about $2 .9 billion. That's a massive
difference. But isn't that just
a scale issue? Carnival is a much
bigger company with way more ships.
It is partly scale, yes. But Elliott
argues that Norwegian stock is fundamentally
undervalued relative to its actual
potential. They believe that if
Norwegian adopted what they are
calling a Norwegian Now Plan, which
is essentially a strict diet of
financial discipline and margin
expansion, the stock could hit $56
a share. Wow. Which is 159 % upside
from where it has been trading.
159 % upside is exactly the kind
of number that makes Wall Street
sit up and listen. So Ellie comes
in, pushes out the cruise guy Harry
Summer, and installs the efficiency
guy, John Chidsey. But there's a
twist in the source material here
that I found really fascinating.
They aren't just asking for cuts,
are they? Oh, they aren't. And this
is the central paradox of the whole
situation. At the exact same time
they are installing a fast food
CEO to cut costs, they are publicly
demanding their legend of the cruise
industry, Adam Goldstein, be put
on the board of directors. Adam
Goldstein. That name definitely
rings a bell. He was with Royal
Caribbean, right? He was the president
of Royal Caribbean for years. He
has over 30 years of deep experience
in this industry. He is literally
the guy who helped build the modern
mega ship experience that dominates
the market today. So Elliott is
playing a very complex game here.
They want Chidsey to tighten the
bolts on the finances, make the
burgers cheaper to produce, if you
will. But they want Goldstein in
the room to make sure they don't
actually destroy the product in
the process. Because if you cut
too much, if you turn a premium
Norwegian cruise into the equivalent
of a soggy sandwich sitting under
a heat lamp, people just stop booking.
Right. And then your profit margins
don't matter because your revenue
plummets. Right. Cruising is fundamentally
an experienced economy. It relies
heavily on repeat customers. You
simply can't efficiency your way
to popularity if the food is bad,
the cabin service is slow, and the
entertainment is cheap. And the
stakes are incredibly high right
now. Because Norwegian isn't just
cutting back and playing it safe.
They're currently committed to spending
billions of dollars on brand new
ships. I'm glad you brought that
up. The new Fingantieri deal. Right.
The sources mention they are ordering
new ships for Norwegian, Oceania
and Regent Seven Seas, but the delivery
dates are in 2036 and 2037. 2037.
Just think about that time frame
for a second. I mean, I don't even
know what I'm having for dinner
tonight, let alone what the global
economy or travel trends will look
like in 2037. That's more than a
decade away. But that is the massive
lead time of this heavy industry.
You have to place your multi -billion
dollar bets 10 years in advance.
And they are building an entirely
new class of ship for Norwegian
over 227 ,000 gross tons. That size
will hold over 5 ,000 passengers.
That puts it right up there with
the biggest ships in the world,
the absolute behemoths. It does.
So here is the very real situation
facing the new CEO today. You have
John Chidsey, brought in and known
for extreme cost cutting and operational
efficiency. And sitting on his desk,
he has an invoice for the biggest,
most expensive luxury vessels the
company has ever built arriving
in a decade. Talk about pressure.
Right. He has to figure out how
to pay for those massive future
ships while actively trying to slash
today's operating budget. It really
feels like a battle for the soul
of the company. Are they going to
be the premium line they always
claim to be in their marketing?
Or are they going to become the
fast food chain of the seas? Highly
efficient, very profitable, very
consistent, but not exactly where
you go for a gourmet luxury experience.
That is the multi -billion dollar
question that everyone is asking
right now. The expert consensus
seems to be that Chidsey is there
to make the machine run leaner today
so that the massive revenue from
those future ships actually turns
into the kind of profit margins
that satisfy Elliott management.
So he's there to fix the plumbing,
not necessarily to design the dinner
menu. Exactly. But it connects right
back to our first story, doesn't
it? Carnival is out there spending
millions of dollars to put heated
thermal loungers on a 24 -year -old
ship because they fundamentally
know the experience is what sells
the tickets. They know that if the
passenger is cold on a sea day in
August, they won't come back. Precisely.
Carnival is upgrading the physical
product to compete. And CLH is currently
upgrading the corporate management
to compete. But eventually those
two strategies have to meet in the
middle. You can't have financial
discipline without a product that
people actually want to buy. And
you certainly can't have a great
product if you go bankrupt trying
to build it. It seems like a constant
high wire tightrope walk. It is
a very delicate ecosystem. Yeah.
And right now the wind is blowing
50 knots on all sides of it. So
if you're a listener who just wants
to book a nice vacation for your
family next year, what does all
this corporate drama actually mean
for you, should you be worried about
booking your next cruise? I don't
think you need to be worried at
all, but I do think it means we
are entering a major transition
period for the industry. The Wild
West era of just building bigger
and bigger ships with crazier attractions
is settling into a phase of intense
operational optimization. Meaning
the accountants are taking over?
Essentially, yes. You might start
to see fewer free perks, more strategic
upselling -like charging for access
to those thermal suites, and just
a tighter, more strictly managed
operation overall. We've really
seen the full life cycle of the
industry today. We saw the old ships
getting new life with Carnival's
massive renovation in Singapore.
We saw the harsh operational reality
of dodging winter storms with MSC
in the Med. And we saw the future
strategy being fought over tooth
and nail in the Norwegian boardroom
in Miami. It really does validate
that floating city concept we started
with. You have the construction
crews, the emergency splices and
the city council all screaming at
each other at once, just trying
to keep the whole thing afloat.
Here is a provocative thought to
leave you with as we wrap up this
deep dive. We have a former Subway
and Burger King CEO now running
a luxury cruise holding company.
Investors are aggressively demanding
higher margins. Are we inevitably
moving toward a fast food model
of efficiency in cruising? It is
a very valid fear. Standardization
is great when you are buying a $5
burger. You want it to taste exactly
the same in London as it does in
New York. But I am not sure if that
logic holds up for a $5 ,000 luxury
vacation where people specifically
want to feel special, not processed.
And if that standardization really
does take hold, can the Cloud9 spa
experience, those heated loungers
we started this whole conversation
with, survive the spreadsheet? Or
will they just be looked at as an
unnecessary line item expense by
a CEO who is used to counting pickle
slices? That is exactly what we
will have to watch, and I would
highly suggest keeping a close eye
on March 2nd. March 2nd? Why? What
happens then? That is when NCLH
is scheduled to report their full
earnings. It will be the very first
time we really get to hear the new
leadership's tone. It will be the
next major chapter in this drama.
And we will get to hear John Chidsey
speak directly to the market and
lay out his vision. We will definitely
be listening for that. Thanks for
taking this deep dive with us today
and helping us navigate these very
choppy waters. Always a pleasure.
Hopefully next week the weather
is a bit calmer for everyone. Fingers
crossed. And for everyone listening,
whether you are dreaming of relaxing
in a thermal suite or just trying
to avoid a winter storm at an airport,
keep your eyes on the horizon. We'll
catch you next time.