Royal Caribbean Cruise Lines 2008 Annual Report Download - page 22

6 Royal Caribbean Cruises Ltd.
PART I
In May 2007, Zenith was redeployed from Celebrity Cruises to Pullmantur.
Before redeployment to Pullmantur, Zenith underwent renovations to
incorporate Pullmantur’s signature elements, while adding approxi-
mately 38 new verandas and 25 staterooms. Empress of the Seas and
Sovereign of the Seas were redeployed from Royal Caribbean Inter-
national to Pullmantur in March 2008 and November 2008, respectively.
Before redeployment to Pullmantur, each ship underwent renovations
to incorporate Pullmantur’s signature elements. Upon the return of
Island Star in April 2009 from Island Cruises, the ship will be redeployed
to Pullmantur and will sail under the name Pacific Dream. Before redeploy-
ment to Pullmantur, the ship will undergo renovations to incorporate
Pullmantur’s signature elements. This ship will be dedicated to the Latin
American market in support of Pullmantur’s Latin American expansion.
Azamara Cruises. In May 2007, Blue Dream was redeployed from
Pullmantur to Azamara Cruises, and is sailing under the name Azamara
Journey. In September 2007, Blue Moon was also redeployed from
Pullmantur to Azamara Cruises and is sailing under the name Azamara
Quest. Before redeployment to the Azamara Cruises brand, each ship
underwent renovations to incorporate Azamara Cruises’ signature
elements, while upgrading guest suites and staterooms, and adding
two new specialty restaurants.
CDF Croisières de France. In April 2008, Holiday Dream was redeployed
from Pullmantur to CDF Croisières de France and sails as its first ship
under the name Bleu de France. Before redeployment to CDF Croisières
de France, Holiday Dream underwent renovations, including the addi-
tion of a French bistro and a spa with a sea water center, to customize
the ship for French guests.
New Markets and Itineraries
Our ships operate worldwide with a selection of itineraries that call on
approximately 425 ports. New ships, including both newly constructed
ships and those we acquire, allow us to expand into new markets and
itineraries. Our brands have expanded their mix of itineraries, while
strengthening our ability to penetrate the European, Latin American
and Caribbean markets further.
In April 2008, Independence of the Seas was introduced in the United
Kingdom and began offering itineraries from the United Kingdom to
the Mediterranean, Ireland and the Canary Islands. Navigator of the
Seas, which had offered the U.K. program in 2007, offered cruises
sailing out of Spain and Italy during the summer of 2008. In the fall,
both Royal Caribbean International and Celebrity Cruises expanded
in Australia, New Zealand and the South Pacific with Royal Caribbean
International’s Rhapsody of the Seas and Celebrity Millennium. In
December 2008, Royal Caribbean International introduced new
Southern Caribbean itineraries from Panama on Enchantment of the
Seas. Also in late 2008, Legend of the Seas began offering sailings
throughout Asia from Singapore and Shanghai, and Radiance of
the Seas began offering cruises in South America around Cape Horn.
In 2009, we will continue to focus on the acceleration of Royal Carib-
bean International’s and Celebrity Cruise’s strategic positioning as global
cruise brands while expanding Pullmantur. An unprecedented 22 ships
will be sailing in Europe for the Company and Royal Caribbean Inter-
national will have the most European capacity of any non-European
brand as it increases its capacity to eight ships: Independence of the
Seas, Voyager of the Seas, Navigator of the Seas, Brilliance of the
Seas, Jewel of the Seas, Legend of the Seas, Splendour of the Seas,
and Vision of the Seas. Brilliance of the Seas will remain in Europe
year round throughout 2009, and then will begin offering sailings
from Dubai starting in January 2010. In late 2009, Legend of the
Seas will return to Asia and commence year round deployment
throughout 2010.
Celebrity Cruises will also increase its capacity in Europe in 2009. With
five ships, the brand will have its greatest presence ever in Europe,
with sailings being offered on Celebrity Solstice, Celebrity Equinox,
Celebrity Century, Celebrity Summit, and Celebrity Constellation. The
2009 season will also mark the debut of Celebrity Equinox with Holy
Land sailings from Rome, which will be a first for the brand. The Royal
Caribbean International brand will return to Israel in 2009, having last
visited Israel in 2000. Azamara Cruises will offer European sailings on
both Azamara Journey and Azamara Quest. Also, Pullmantur and CDF
Croisières de France will continue to offer European itineraries on all ships.
In January 2009, Mariner of the Seas began year round cruises to
Mexico from Los Angeles, California. Also in January, Vision of the
Seas began offering seasonal Caribbean itineraries from the Dominican
Republic. Starting in the fall of 2009, both the Celebrity Cruises and
Royal Caribbean International brands are expanding into new North
American markets. Celebrity Mercury will operate Caribbean cruises
from Baltimore, Maryland and Charleston, South Carolina and Royal
Caribbean International will operate Mexico cruises from San Diego,
California with the Radiance of the Seas. Royal Caribbean International
will debut Oasis of the Seas in the Eastern Caribbean in December 2009.
Also starting in December, Royal Caribbean International will increase
its capacity in Brazil, deploying both Splendour of the Seas and Vision
of the Seas.
In an effort to secure desirable berthing facilities for our ships, and
to provide new or enhanced cruise destinations for our passengers,
we actively assist or invest in the development or enhancement of cer-
tain port facilities and infrastructure, including mixed-use commercial
properties, located in strategic ports of call. Generally, we collaborate
with local, private or governmental entities by providing management
and/or financial assistance and often enter into long-term port usage
arrangements. In exchange for our involvement, we generally secure
preferential berthing rights for our ships.
International Passengers
Passenger ticket revenues generated by sales originating in countries
outside of the United States were approximately 40%, 37%, and 24%
of total passenger ticket revenues in 2008, 2007 and 2006, respectively.
International passengers have grown from approximately 511,000 in
2004 to approximately 1.3 million in 2008.
We sell and market our global brands, Royal Caribbean International,
Celebrity Cruises and Azamara Cruises, to passengers outside of North
America through our offices in the United Kingdom, Germany, Norway,
Italy, Spain, Singapore, China, Brazil, and Australia. We believe that
having a local presence in these markets provides us with the ability to
react faster to local market conditions as well as providing us with the
ability to better understand our customer base in each respective mar-
ket. We further extend our reach with a network of 48 independent
international representatives located throughout the world. Historically,
our focus has been to primarily source our passengers for our global
brands from North America. Currently, we are expanding our focus to
sell and market our cruise brands to countries outside of North America
through fleet innovation and by responding to cultural characteristics
of our global passengers.