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Royal Caribbean International's new brand campaign defies industry misperceptions by spotlighting authentic exploration

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Written by Teijo Niemelä Teijo Niemelä

Category: Top Headlines Top Headlines

Published: 15 October 2015 15 October 2015

Royal Caribbean International sails 23 ships to more than 250 destinations around the world delivering the world’s best vacation for adventure seekers on the most innovative vessels at sea. The cruise line is launching a new brand campaign inviting these seekers to “Come Seek” their own experience filled with adventure, exploration and discovery.

“Come Seek” reflects the brand’s adventurous spirit by placing the traveler’s personal experience and point of view at the heart of the campaign. It also showcases the essence of the experience that the brand has been delivering for more than 40 years. Known for its innovation – including the revolutionary Oasis- and Quantum-class ships – and delivering many industry-firsts from ziplines and rock climbing walls, the FlowRider surf simulator and the RipCord by iFly skydiving experience, to leading technological breakthroughs like VOOM – the fastest internet at sea, Royal Caribbean continues to transform the cruise experience offering an active adventure with an immersive experience and connectivity that all travelers desire.

“Our mission is to challenge misperceptions and invite the next generation of travelers to experience the unique Royal Caribbean adventure,” said Michael Bayley, president & CEO, Royal Caribbean International. “Our loyal guests recognize that Royal Caribbean is an adventure designed to inspire and excite the senses. With our new campaign, we will show these new travelers what our guests already know and love.”

Even as the cruise industry has grown on the strength of new ships and modern program offerings, the reality is that a majority of the population – particularly the millennial generation – has never taken a cruise. The new campaign is not only an invitation from Royal Caribbean to “Come Seek,” but aims squarely at conventions that may inhibit continued growth.

The integrated marketing campaign includes broadcast, digital and outdoor advertising, in addition to public relations, social media and direct marketing. The multi-million dollar campaign will debut on Monday, October 19th with a series of broadcast and online ads, including a first-of-its-kind live streaming outdoor campaign delivered via the social platform Periscope.

“Come Seek” is a call to travelers who want more than to sightsee along the beaten path. It’s for adventurers who don’t just want, but require, immersive, culturally rich travel. Royal Caribbean delivers adventure both onboard and with exciting and culturally rich experiences in destinations around the world. Seekers are introduced to these destinations with experiential excursions, such as an Ocean Racing Experience in Antigua, which matches two guest teams of six each with professional yachties in head to head competition, and a Mountain Top Downhill Trek through historic plantation ruins in St. Maarten.

For a sneak peek of the “Come Seek” campaign elements visit Royal Caribbean’s You Tube page.

Age group 25 to 34 second biggest customers of cruise lines in UK

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 14 October 2015 14 October 2015

Young adults aged 25 to 34 are the second largest age group for cruise lines in Britain, just one percentage point behind the 65 plus age group, survey commissioned by Association of British Travel Agents (ABTA) shows.

Cruise holidays were particularly popular with holidaymakers aged 65 plus with 13% of those who took a holiday in the last 12 months taking a cruise.

“They were followed by people aged 25-34, 12% of holidaymakers in this age group took a cruise in the last year. 25-34 year olds are also the most interested in taking cruise holidays with almost half (48%) stating that they were interested in trying a cruise,” ABTA said, adding that 15% of young families (those with children under five) who took a holiday in the last 12 months took a cruise.

Cruise line officials have said that the industry has suffered for a long time from an image problem in Britain, whereby cruises are viewed suitable only for elderly people. The figures released by ABTA could thus indicate that this could be changing.

Last year, 1.65 million Britons took a cruise, a fall of 5% on the previous year.

Deployment of capacity to China reduces capacity in North America, Europe

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 13 October 2015 13 October 2015

Deployment of capacity to China is good for the cruise industry’s profitability as it absorbs capacity from the North American and European markets, said Robin Farley, cruise industry analyst at UBS in New York

“We have written extensively on the importance of China for the cruise lines, with not only greater profitability on Chinese-sourcing ships, but also the benefit of reducing capacity in existing North American and European markets by redeploying it to China,” she said in a research note.

“And we would argue that the benefit to the cruise lines from China may be greater for the 90% plus of the fleet that is competing with less supply, perhaps a greater benefit to overall profitability than the 5-8% of supply that is in China itself,” Farley continued.

So the bottom line is, China pricing is already higher than average, profitability is greater putting a ship there versus the Caribbean. “The China story has never been that pricing was going to keep growing at a double-digit rate. The China story is that volume is growing massively because of the high China price premium.”

“CCL (Carnival Corp & plc) is not yet given guidance for 2016 – but it still sounds likely that overall yield in China could be positive with onboard spend helping, since charter prices may not be up given the supply growth,” she said.

“But prices in China would still grow overall yield and returns would grow at a greater rate given the benefit from scale growth in China as well. And of course, two ships going to China (six next year up from four this year) also help the rest of the fleet since supply growth in the rest of the world is up only 2% for CCL next year, while company wide capacity is up 3.7%,” Farley stated.

Adding ships to China generates higher yield than incremental ship in Caribbean – UBS’ Farley

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 13 October 2015 13 October 2015

Adding ships to the Chinese cruise market generates better yields to cruise lines than an incremental ship would do in the Caribbean, although the rise in yields in the first named market will slow down this year from 2014, said Robin Farley, cruise industry analyst at UBS in New York

"China is an important market for the cruise lines not because it is growing price at an outsized rate, but rather it is important because the growth of pricing in China has already surpassed the tipping point about two years ago where a ship is more profitable in China than an incremental ship in the Caribbean," Farley said in a research note.

Carnival Corp & plc (CCL), the world’s largest cruise shipping group, is growing yields in China at a single digit rate in 2015 after double-digit growth in 2014 and that is with CCL's 45% capacity increase in China this year.

After growing yields at a double-digit clip, Royal Caribbean Cruises Ltd (RCL), the industry’s number two group, is now seeing mid to high single digit yield growth in China, on top of yields that already made for RCL's second best performing ships last year in terms of profitability.

“Our checks found Quantum (of the Seas) selling for 35% higher price in China than it was selling in the Carib. earlier this year, and while that has the benefit of summer seasonality, we would point out that Quantum's price in the Caribbean was already at a double-digit premium to other Caribbean product. RCL & CCL will also home port some cruises out of Tianjin next year, which price checks suggest may be a little lower than Shanghai, but even a 15% discount to Shanghai puts it above RCL fleet on average,” Farley said.

Even without an increase in yield in China, adding ships to China is yield accretive to the cruise lines overall. It is even further accretive to earnings growth, since expense/ unit comes down with big scale increases. The China story has never been that pricing was going to keep growing at a double-digit rate. “The China story is that volume is growing massively because of the high China price premium, and that also helps capacity and price in existing markets,” Farley noted.

While the stock market pull back in China has concerned investors about consumer demand, and we also frequently get questions about the revenue declines in gaming, we would point out that cruises in China are driven by the growing middle class. As long as there is wage growth in China and as long as GDP growth causes China's middle class ranks to continue to swell, that is the source market for cruises -- not VIP wealth and not stock market wealth.