The cruise line boss who is challenging Florida's vaccine passport ban
"I didn't want to sue the governor, but I had no choice," says Norwegian Cruise Line CEO Frank Del Rio, one of the first business leaders to begin a comprehensive vaccine mandate for workers and customers.
Frank Del Rio has no regrets.
He doesn't regret requiring his employees to get vaccinated against the COVID-19 virus to return to work. He doesn't regret mandating his customers be vaccinated to sail on his company's ships. He doesn't regret having the same rules for crew members.
He does wish he hadn't felt the need to sue the state of Florida.
"I didn't want to sue the governor, but I had no choice," said Del Rio, the CEO of Norwegian Cruise Line Holdings.
Norwegian sued over the state's ban on so-called vaccine passports. A law championed by Gov. Ron DeSantis prohibits companies from requiring customers to document their vaccine status to receive services.
Norwegian is doing just that. Every passenger and crew member on a Norwegian vessel must show proof of being vaccinated against COVID-19 and be tested for the virus before boarding.
"Either I was going to be in violation of federal law — CDC regulations — or state law. That's not a position you want to be in," he said.
Del Rio was, and has been, an early, strong and vocal advocate of vaccine mandates. He was one of the first business leaders to put in place a comprehensive vaccine requirement for workers and customers.
In early April, when the vaccines had still only received emergency authorization by the Food and Drug Administration and Florida had just opened up vaccinations for everyone who was eligible, Del Rio and Norwegian announced its vaccination policy. It would still be months before the company would sail from Florida with paying passengers.
The announcement came just days after DeSantis issued an executive order banning any company from requiring its customers to show proof of a vaccination. That executive order was the basis for what has become law. Norwegian challenged the ban and won the first round in federal court, but the state plans to appeal.
And Del Rio doesn't know when his company will lift its passenger requirement. Originally, it had been set to expire in October.
"We will keep mandating the vaccine mandate as long as the science dictates that it is the right way to operate — the right way to keep people healthy," he said.
Del Rio has been in the cruise industry for more than 25 years. He became the CEO at Norwegian in 2015 after it brought a cruise line Del Rio founded in 2002.
He considers his company's vaccine mandate a competitive advantage. When the Centers for Disease Control and Prevention released its conditional sail order in the spring, it had two paths for cruise operators to welcome back paying customers: run a series of simulated cruises implementing the CDC's on-board and shoreside protocols, or require 95% of crew and passengers to be vaccinated. Del Rio chose to go with mandatory vaccinations.
"I think given today's environment, that's what people want. And therefore [it is] a competitive advantage," he said.
That confidence is supported by passengers buying cruise tickets. According to the company's third-quarter investor presentation, bookings for 2022 are in line with the record business in 2019 — the last full year before the pandemic. Norwegian sees demand "meaningfully higher than 2019 at higher pricing" for the second half of next year.
"I believe that the average American who wants to go on a cruise would prefer to go on a cruise knowing that everyone around them is vaccinated," Del Rio said.
Its 28 ships didn’t sail with passengers for 500 days because of the COVID-19 pandemic. Its first ship to set sail was in July, from Greece in the Aegean Sea. In early August, a Norwegian ship sailed again from the U.S. — in Alaska. And by mid-August, Norwegian returned to its home waters in Florida for the first time in 17 months. The company set sail out of PortMiami — and the company’s new $215 million dollar terminal nicknamed the “Pearl of Miami.”
Fewer than half of its ships have welcomed back paying passengers. It doesn’t expect to have all of its ships operating at full capacity until April.
The company released its third quarter financial results last week. It was the first quarter to include paying passengers in more than a year and a half. Norwegian has not had a profitable quarter since the end of 2019.
We went from making about $9 million a day in profit to losing $9 million a day," Del Rio told WLRN. He has promised the company will return to profitability in the second half of next year. And, if the reservation trends continue, he expects 2023 to be the best year ever for Norwegian.
"I can see a path that we return to the profitability of yesteryear," he said.
Every time Norwegian returns a ship to service it limits its passenger capacity to 60% for the first month before opening up more cabins.
"That's one additional layer of protection of the trilogy of vaccinations, testing and social distancing," Del Rio said.
Norwegian ships relaunch about every 10 days.
It also is the company's effort toward repairing the image of cruising. Ships were among the first and fastest places experiencing COVID-19 outbreaks in the early days of the global health pandemic. Some infected ships had difficulty finding harbors to take them. Cruise companies faced criticisms over how they dealt with sick passengers and crew.
"This industry took a lot of beating back in April, May of 2020. People remember what happened," said Del Rio." Protecting the integrity of our brand is more important than ever."
When Norwegian decided to require passengers and crew to be vaccinated, Del Rio said it only made sense to extend the mandate to the company's shoreside workforce, too. That was months before the Biden administration began working on a federal vaccine mandate for large companies. That work culminated last week with Occupational Safety and Health Administration releasing its rule, which goes it effect Jan. 4.
However, a federal court in New Orleans on Saturday put a temporary hold on the rule. The regulation targets companies with 100 workers or more. It would require those companies to mandate employees to be vaccinated against COVID-19 or undergo weekly testing.
Florida, and at least two dozen other states, have come out against the federal emergency standard. On Thursday, just hours after the rule was released, Gov. DeSantis announced his intention to sue.
Del Rio instituted Norwegian's employee vaccine mandate in the effort to bring workers back to the office. That began June 1.
"No jab, no job," he said. "Everyone who works at Norwegian must be vaccinated or else you're not working here."
He said there have been a few "separations" of people who refused to get the shots. And he said there have been a handful of employees who have been granted medical or religious exemptions.
While Norwegian has brought employees back to the office, it also offers workers a 4-and-1 work week. The strategy allows employees to work from home one day a week — Fridays.
"Maybe at some point in the future, we we may revert to something else. But for right now, it's working well," Del Rio said.
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