Royal Caribbean Cruise Lines 2009 Annual Report Download - page 24

Onboard Activities and Other Revenues
Our cruise brands offer modern fleets with a wide array of onboard services, amenities and activities, including swimming
pools, sun decks, lawn decks, spa facilities (which include massage and exercise facilities), beauty salons, bungee jumping
trampolines, boxing rings, gaming facilities, lounges, bars, a wide variety of dining options and venues, Las Vegas-style
entertainment, hot glass shows, retail shopping, libraries, dedicated recreational areas for youth of all ages, cinemas, conference
centers, internet cafes and shore excursions at each port of call. While many onboard activities are included in the base price of a
cruise, we realize additional revenues from, among other things, gaming, the sale of alcoholic and other beverages, gift shop items,
shore excursions, photography, spa/salon and fitness services and art auctions. In addition, we offer a wide variety of specialty
restaurants and dining options. A new flexible dining option, “My Time Dining” and “Celebrity Select Dining”, allows guests for
Royal Caribbean International and Celebrity Cruises respectively, to choose when they dine in the main dining room onboard, on a
day-by-day basis, which includes the industry’s first pre-cruise day-by-day flexible dining reservation system. Royal Caribbean
International, Celebrity Cruises and Azamara Club Cruises offer enhanced functionality on their respective internet sites for selecting
shore excursions, specialty dining and amenities prior to embarkation. Royal Caribbean International and Celebrity Cruises also offer
a catalogue gift service, which is now offered via the internet to provide travel agents and others the opportunity to purchase gifts for
guests.
In conjunction with our cruise vacations, we offer pre- and post-cruise hotel packages to our Royal Caribbean International,
Celebrity Cruises and Azamara Club Cruises guests. We also offer escorted, premium land-tour vacation packages in Alaska, Asia,
Australia, the Canadian Rockies, Europe, New Zealand and Latin America. These escorted, premium land-tour vacations are offered
exclusively in conjunction with our cruises marketed to our Royal Caribbean International, Celebrity Cruises and Azamara Club
Cruises guests through our cruise-tour operations, Royal Celebrity Tours. Pullmantur also offers land-based travel packages to
Spanish and European vacation travelers including hotels and flights to Caribbean and Thailand resorts and sells land based tour
packages to Europe aimed at Latin American guests. In addition, we sell cruise vacation protection coverage, which provides guests
with coverage for trip cancellation, medical protection and baggage protection. Onboard and other revenues accounted for 28.6%,
27.6% and 28.0% of total revenues in 2009, 2008 and 2007, respectively.
Segment Reporting
We operate five cruise brands, Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF
Croisières de France. The brands have been aggregated as a single reportable segment based on the similarity of their economic
characteristics as well as products and services provided. (For financial information see Item 8. Financial Statements and
Supplementary Data.)
Employees
As of December 31, 2009, we employed approximately 4,900 full-time and 800 part-time employees worldwide in our shoreside
operations. We also employed approximately 54,600 shipboard employees. As of December 31, 2009, approximately 80% of our
shipboard employees were covered by collective bargaining agreements. Based on employee survey results, we believe our
employees’ satisfaction level with our organization is strong.
Insurance
We maintain insurance on the hull and machinery of our ships, which includes additional coverage for disbursements, earnings
and increased value, which are maintained in amounts related to the value of each ship. The coverage for each of the hull policies is
maintained with syndicates of insurance underwriters from the British, Scandinavian, French, United States and other international
insurance markets.
We maintain liability protection and indemnity insurance for each of our ships through either the United Kingdom Mutual Steam
Ship Assurance Association (Bermuda) Limited or Steamship Mutual Underwriting Association (Bermuda) Limited. Our protection
and indemnity liability insurance is done on a mutual basis and we are subject to additional premium calls in amounts based on claim
records of all members of the mutual protection and indemnity association. We are also subject to additional premium calls based on
investment shortfalls experienced by the insurer.
We maintain war risk insurance for our ships, including terrorist risk insurance, on each ship through a Norwegian war risk
insurance organization. This coverage includes coverage for physical damage to the ship which is not covered under the hull policies
as a result of war exclusion clauses in such hull policies. We also maintain protection and indemnity war risk coverage for risks that
would be excluded by the rules of the indemnity insurance organizations, subject to certain limitations. Consistent with most marine
war risk policies, under the terms of our war risk insurance coverage, underwriters can give seven days notice to us that the policy
will be canceled and reinstated at higher premium rates.
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