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RCCL first quarter exceeds forecast on strength of major products

Royal Caribbean Cruises Ltd (RCCL), the world’s second largest cruise shipping group, has reported first quarter net profit of $45.2 million, a marked increase from $26.4 million in the same period a year earlier. Revenues fell slightly, to $1.82 billion from $1.88 billion.

Earnings per share rose to $0.20 compare to the company’s own forecast of $0.10 to $0.15.

“Commercially the year is turning out as expected, with strong booking trends and yield growth for all major products. The strengthening of the US Dollar and the rise in fuel prices are negatively affecting earnings, but cost efficiencies are mitigating a large portion of the impact,” the company said in a statement.

Net yields fell by 1.0% on a constant currency basis (down 5.4% As-Reported). “Strong close-in pricing on Caribbean sailings drove the better than anticipated performance.

Net cruise costs excluding fuel increased 0.9% on a constant currency basis (down 1.7% As-Reported), significantly better than guidance driven by further efficiencies,” RCCL said.

UK market to return to growth 2015, young people greatest challenge - Leven

The British cruise market should resume growth this year after a drop in 2014, said Stuart Leven, Managing Director of Royal Caribbean International UK & Ireland. "I wasn't surprised by the drop at all. There was less capacity deployed ex UK last year," he told Cruise Business onboard the new Anthem of the Seas.

The British source market is of strategic importance for the Royal Caribbean Cruises Ltd'S (RCCL) contemporary market unit, he said, adding that Oasis class tonnage could not be deployed in Barcelona without strong support of the British source market. Half of the customers the company sources from the UK sail from Southampton, while the other half goes on fly cruises. Europe, where the company has seven ships this summer, is the most favoured fly cruise destination, followed by the Caribbean. "We will bring Dubai back in December. It has been a favourite among British passengers," Leven pointed out.

The greatest challenge Royal Caribbean International and the entire cruise industry is facing is to bring new generations to cruising. The perception that cruising is expensive and only for old people remains alive and well and it has turned out to be very difficult to change. New ships are an important aspect in driving the business forward, but you cannot expect new hardware alone solve the industry's challenges. "If you think that hardware alone is enough, you are kidding yourself," Leven stated, adding: "We sell holidays. Last night, there were about 100,000 people on board our ships."

The industry will need to invest very significant resources in educating the younger generations about the attractions of cruise holidays, but at the same time the industry itself will have to understand how these young people live their lives. And here a fundamental change has taken place in a rather short time. "There was a time when people wanted escapism from gadgets. The millennials don't do that," Leven said. Communication with friends and relatives at home is essential to these people and they also live in "now" – decisions are made on the go. The cruise industry needs to understand this and its implications if it hopes to widen its customer base to young people.

Looking ahead to the year 2020, Leven said that the UK cruise market will be bigger then what it is now. "About 30 million package holidays are sold in Britan every year. And just under 1.7 million cruises. There's our potential," he concluded.

Latin America offers great potential for Royal Caribbean group

The Latin American source markets offer a great potential for the Royal Caribbean Cruises Ltd. (RCCL) group, senior executives said.

Royal Caribbean International, the group's contemporary market unit, has been building up its business in Mexico over the past 18 months and this has produced encouraging results, said Michael Bayley, who heads the company. "We see growing numbers of Mexicans flying to out to cruise not just in the Caribbean, but also in Europe," he told a press conference on board the new Anthem of the Seas.

"Mexicans are among the three top spenders at Royal Caribbean International, they book the highest grade staterooms and their on board spend is also high," he continued. Ricardo Amaral, who runs the group's Latin America business from Sao Paulo in Brazil said that not only Mexico and Brazil are attractive source markets, but also e.g. Chile, Argentina, Colombia and Panama.

Latin America is becoming an attractive source market also for RCCL group's premium market Celebrity Cruises unit and the luxury market Azamara brand, he added.

RCCL also has a Latin America and Spain focused brand, Pullmantur.

Royal Caribbean rumoured to talk of orders with Meyer Turku

Royal Caribbean Cruises Ltd. (RCCL), the world's second largest cruise shipping group, is in talks with Meyer Turku Shipyard about significant new orders, a Finnish media report said.

"If a deal will be struck, construction of the vessels would take place in the beginning of the next decade. It would bring work to Turku for several years," the Helsingin Sanomat daily reports on its website.

Jan Meyer, ceo of the Turku yard, was quoted by the paper as saying. "Royal Caribbean is the second largest cruise shipping company in the world. Of course I hope that they would order new ships from us in the future. However, at this moment there are no news." The Turku shipyard's latest deliveries to the RCCL group were the first two Oasis class vessels of Royal Caribbean International, the contemporary market unit of the group.

The paper also mentioned that the shipyard, which is owned by the German Meyer family, would soon finalise an earlier agreed contract to build two ships to Carnival, which it described as a UK company.

Carnival plc, which owns P&O Cruises, P&O Cruises Australia, Princess Cruises and AIDA Cruises, is a British company, while Carnival Corporation, which owns the other brands of the Carnival Corp & plc group, is a Panamanian company that is headquartered in the US. The two trade as a single entity and have identical boards and top management.

Princess Cruises to have five ships in Australia in 2016-17

Princess Cruises has announced it will home port five ships in Australia to sail the cruise line’s largest-ever program offering in Australia, New Zealand and the South Pacific for the 2016-2017 season. Princess Cruises will introduce the 3,082-guest Emerald Princess to the market, with Golden Princess returning to sail from Melbourne and Sun Princess, Sea Princess and Dawn Princess rounding out the fleet and expanding the cruise line’s in-market capacity by 20 percent.  

Highlights of the new program include an 84-day Circle South America voyage, more ways to see New Zealand, longer South Pacific cruises and Circle Australia voyage options.  In addition, Land and Sea Vacation packages will immerse adventure-seekers in the diverse destinations.
On sale beginning April 22, 2015, the new Princess Cruises’ Australia season runs from October 2016 to April 2017. More details can be found at
"Australia and the entire South Pacific region has always had an allure as a magical place for travellers, and cruising is one of the best ways to explore this part of the world," said Jan Swartz, president of Princess Cruises. "As demand for the region grows, we’re responding with more voyages, more destinations and more creative itinerary options."
Cruise-goers can choose from 120 cruise options, in total visiting 113 destinations in 39 countries. Some of the choices include:

– An 84-day Circle South America cruise on Sea Princess departing Sydney, Australia on January 11, 2017 and visiting 28 destinations in 18 countries including Argentina, Chile, Brazil, Costa Rica, Panama, Ecuador and Uruguay.  Overnight calls in Buenos Aires, Rio de Janeiro and Lima and a full-transit of the Panama Canal add to this special voyage.
– More ways to explore the natural wonders of New Zealand with all five Princess ships sailing to the country’s beautiful coastal landscapes on cruises ranging from 11- to 14-days.
– Circle Australia voyages on Sun Princess with departures from Sydney in October 2016 and March 2017 as well as the first-ever roundtrip voyages from Brisbane and Fremantle.
– 10- to 14-day voyages through the idyllic and remote islands of the South Pacific from Sydney, Brisbane or Melbourne, on Sun Princess and Sea Princess.
– A 42-day four continent voyage from England to Australia on September 28, 2016 aboard Emerald Princess as she sails south for her first-ever season Down Under.
– Two 42-day journeys to the Orient aboard Dawn Princess sailing from Sydney and Brisbane with visits to multiple destinations in China and Japan. The Sydney sailing departing March 16, 2017 is timed to visit Japan during its famous Cherry Blossom season.

To further enhance the cruise vacation experience, Princess Cruises will offer two Land and Sea Vacation packages.  The Australian Outback package immerses guests in Aboriginal culture and includes visits to the Great Barrier Reef and Ayers Rock in Uluru National Park, a UNESCO World Heritage Site.  The more extensive Ultimate Australia package highlights include a Sydney city tour, the Great Barrier Reef, the northern tropical city of Darwin, the Outback and more.