Royal Caribbean’s CocoCay Drives Rate and Short Market

“To describe Perfect Day as a home run wouldn’t do it justice. It really resets the bar in the short cruise market,” said Richard Fain, chairman and CEO, Royal Caribbean Cruises, on the company’s second-quarter earnings call.

Fain highlighted Perfect Day CocoCay as part of Royal Caribbean’s strength to adapt to an ever-changing business environment.

“We continue to do well because we continue to adapt our product to the changing desires of our current and future guests and the changing environment which we operate,” Fain added.

Michael Bayley, president and CEO of Royal Caribbean International, said that through 2020, 11 Royal Caribbean ships will call at the private island that now features an expansive water park.

“If you may recall, we put Mariner, Navigator and Independence through Royal Amplified and we completely changed the product offering in the short cruise market and literally put the biggest best ships in that short market, which is about 20-something per cent of the entire American cruise market,” Bayley said. “So we already started to see demand increasing for those products because they are truly great products.”

Bayley said that since May when the new experience opened, the company has taken around 350,000 guests to CocoCay.

Holyhead: 30 Percent Traffic Increase Set For 2020

“2019 will be on par with 2018 for passenger numbers and calls,” said a spokesperson for Cruise Wales, discussing the cruise traffic in Holyhead.

Next year is better, showing a 30 per cent increase in passenger numbers thanks to larger vessels, the spokesperson said.

“Cruise Wales works closely with local authorities, port services, and tourism businesses to meet expectations to ensure passengers are immersed in our wonderful culture and heritage so they will return again and again,” they said. “We are also working on digital language translation and an ambassador program.”

Berth bookings for Holyhead Port are being taken out through 2022.

Through the Tourism Investment Support Scheme, the Welsh government has invested in a pontoon at Fishguard allowing larger cruise vessels to call, and the Port of Holyhead is also to undergo change, with a new multi-use berth development with 340 meters of dock space coming soon.

Fain: Cruise Industry Has Features That Make It Recession Resistant

Royal Caribbean Cruises is well-prepared to adapt to a changing marketplace, according to Chairman and CEO Richard Fain, speaking on the company’s second-quarter earnings call.

“When circumstances change, we are prepared to adapt. While no one is recession-proof, looking forward, I think the industry has features that make it recession-resistant,” he said. “The growing appeal of our product, the relative price attractiveness, the fixed cost component, the portability of our assets, et cetera; all of these things make us better able to do well even in bad times.

“A good example of that would be China, where Spectrum of the Seas started operating just a few weeks ago,” Fain continued. “Conventional wisdom suggests that bringing a new ship into a market whose economy is weakening ain’t such a good idea. But Spectrum and our other ships there are doing very well, despite the softer economy.”

CFO Jason Liberty said that the company had plans and scenarios it would consider if the economy slowed down.

Liberty said the multi-brand cruise corporation operates a worldwide business that can source guests globally.

“We also have itineraries that go to a thousand different places,” Liberty said. “So what’s available to our guest is much more.

“We also have a much stronger balance sheet and a much stronger liquidity position,” he continued. “And I think we would evaluate our plans in case there was a change in the winds.”

That being said, Liberty said the company was not seeing any of those changes whether it’s booking levels, even daily, or onboard performance.

Looking back to the last recession, Liberty said there was regret that the company pulled back on its growth.

“We would all be talking about higher earnings numbers today, better return profile today, if we hadn’t slowed down our growth or our investment efforts in expanding our global footprint, investing in different projects that would have put us in an even stronger position than we are today.”