Royal Caribbean Cruises takes to the waves and drops anchor to see the sights. The world's second-largest cruise line (behind the combined Carnival Corporation and Carnival plc behemoth), the company operates about 40 ships with about 95,850 berths overall. Its three main cruise brands -- Royal Caribbean International, Celebrity Cruises, and Pullmantur Cruises -- carry about 4 million passengers a year to about 420 ports, including ones in Alaska, Asia, Australia, Canada, the Caribbean, Europe, and Latin America. Its other brands include Azamara Club Cruises and CDF Croisières de France. In addition, Royal Caribbean operates land-based tours and expeditions through Royal Celebrity Tours.
Royal Caribbean funds its business through two primary sources of revenue: passenger ticket revenues, including the sale of air transportation to and from its ships, and the sale of goods and services while passengers are aboard. Passenger ticker revenues accounted for 73% of total 2011 revenues.
The company has expanded in the Asian, European, Latin American, and Caribbean markets with additional cruises from the UK, Spain, and Italy as well as new itineraries for Australia, New Zealand, the South Pacific, Panama, Singapore, and Shanghai. In 2011 it expanded its business in China, India, and South Korea. The cruise operator has boosted its passenger ticket revenues outside the US from 40% in 2008 to 49% in 2011.
Total revenues for 2011 increased $784.8 million (11.6%) to $7.5 billion from $6.8 billion in 2010. About $507.8 million of this increase was attributable to a 7.5% increase in capacity. The capacity growth was primarily due to revenue generated by new ships -- Allure of the Seas, Celebrity Silhouette, and Celebrity Eclipse. About $277 million of the increase in revenues was driven by an increase in ticket prices and the favorable effect of changes in foreign currency exchange rates.
Strong revenue growth outpaced the growth in expenses, helping Royal Caribbean to post an 18% net income increase in 2011 in spite of a rise in cruise operating expenses, which went up $484.5 million (11%) to $4.9 billion from $4.5 billion in 2010. Marketing, selling and administrative expenses rose 13% due to an increase in marketing, selling, and payroll expenses primarily associated with its international expansion. Depreciation and amortization expenses for 2011 went up 9%.
Looking to the future it's full steam ahead as Royal Caribbean adds more vessels and passenger berths and diversifies its customer base in international markets. The firm's Royal Caribbean International has recently added three ships to its line: Oasis of the Seas , Allure of the Seas and Celebrity Silhouette. Touted as the world's largest cruise ship, the gigantic Allure of the Seas (and its sister vessel Oasis of the Seas which went into service in 2009) weighs 220,000 gross tons, boasts 5,400 berths, spans 16 decks, and includes themed "neighborhood" areas and amphitheaters. Allure of the Seas embarked on its maiden voyage in December 2010. The smaller Celebrity Silhouette entered service in 2011.
Royal Caribbean also operates TUI Cruises through a joint venture with TUI AGserving the growing and relatively untapped German cruise market. Operations began in 2009 with the 1,850-berth ship Mein Schiff (My Ship). To meet growing demand Royal Caribbean sold its Celebrity Mercury ship to TUI Cruises to relaunch it as Mein Schiff 2 in 2011.
Overall, Royal Caribbean's non US-based passengers have grown from 871,000 in 2007 to 2.2 million in 2011.
Co-founder Arne Wilhelmsen owns more than 19% of Royal Caribbean. – less