Cruise Industry in High Gear: Royal Caribbean CEO Shares Secrets to Success
In a competitive travel market, cruise lines are fighting for a share of Americans’ tourist budgets. Royal Caribbean, one of the largest cruise companies in the world, is shortening trips and packing days with activities and exclusive opportunities to keep customers hooked.
Experience-Driven Mindset
In an interview with CNBC’s "Squawk on the Street," Royal Caribbean CEO Jason Liberty discussed the company’s strategy to attract and retain customers. "I think we are an experience-driven mindset," Liberty said. "Over half of our guests are actually millennials or younger, and when you survey those guests, about 42% of them say in the next 12 months their plans are to actually go on shorter vacation experiences."
Utopia of the Seas: A Taste of Luxury
Onboard the Utopia of the Seas, the world’s second-largest ship with a maximum capacity of nearly 5,800 passengers, customers are treated to 13 pools, 21 dining options, two casinos, and much more. Liberty believes that the company’s ability to provide a unique experience sets it apart from competitors. "We’re not seeing any pullback from the consumer, whether that’s planning their vacation experiences further out… [or] then on the ships, they go out and they continue to spend," Liberty said.
Scaling the Business
To compete with other types of vacations, such as skiing, casinos, or theme parks, Royal Caribbean is looking at how to better appeal to customers. "When we look at what our guests are doing when they’re not with us, they’re going to Orlando, they’re going to Vegas, they’re going to all-inclusive resorts," Liberty said. "What we’re trying to do is make sure that our experience, whether on the ship or at our private islands, is something that is highly competitive with land-based vacation."
Morningstar Travel and Leisure Analyst Jamie Katz:
"The American traveler doesn’t always have time to take a six- to eight-day cruise due to work schedules and kids’ school calendars," Katz said. "A three-day cruise provides customers with more options."
Expansion Plans
One of the benefits of bringing a new ship to market is the ability to charge more. "You’re really seeing sizable pricing premiums. Historically, pricing of a new ship is a 20% premium to existing ships across the industry," said Patrick Scholes, travel and leisure analyst at Truist Securities.
Conclusion
Royal Caribbean’s strategy to focus on experiences and unique amenities has proven successful. The company’s ability to provide a luxurious experience at an affordable price has made it a favorite among travelers. As the company continues to expand and innovate, it’s likely to remain a major player in the cruise industry.
FAQs
Q: What sets Royal Caribbean apart from other cruise companies?
A: Royal Caribbean’s focus on experiences and unique amenities sets it apart from other cruise companies. The company offers a range of activities and exclusive opportunities that provide customers with a unique vacation experience.
Q: Why is Royal Caribbean expanding its business?
A: Royal Caribbean is expanding its business to increase its capacity and competitiveness in the market. The company believes that its ability to provide a unique experience sets it apart from competitors and will help it attract and retain customers.
Q: How does Royal Caribbean plan to compete with other types of vacations?
A: Royal Caribbean plans to compete with other types of vacations by providing a unique experience that is competitive with land-based vacation options. The company is focusing on creating a luxurious experience at an affordable price to attract and retain customers.
Q: What are the company’s expansion plans?
A: Royal Caribbean has several expansion plans, including the launch of new ships and the expansion of its existing fleet. The company plans to continue innovating and expanding its business to stay competitive in the market.
Author: www.cnbc.com
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