Royal Caribbean Cruise Lines 2009 Annual Report Download - page 34

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The current worldwide economic environment is resulting in financial difficulties for shipyards and their subcontractors. This may
cause or result in delivery delays, ship cancellations or increases in shipbuilding costs that could adversely affect our results of
operations.
The current worldwide economic environment is causing a loss of business for shipyards and their subcontractors which could
result in financial difficulties, liquidations or closures. These events could adversely affect the timely delivery or costs of new ships or
the ability of shipyards to repair and refurbish our existing fleet in accordance with our needs or expectations. Delivery delays and
cancelled deliveries can adversely affect our results of operations, as can any constraints on our ability to repair and maintain our
ships on a timely basis.
Our operating costs and taxes could increase due to market forces and economic or geo- political factors beyond our control.
Our operating costs, including fuel, food, payroll, airfare for our shipboard personnel, insurance and security costs are subject to
increases due to market forces and economic or political instability or other factors beyond our control. Increases in these operating
costs could adversely affect our profitability. In addition, the recent volatility in the price of fuel is making our ability to predict fuel
prices extremely difficult. United States, state and local authorities as well as foreign authorities periodically consider increases in
taxes. Any such tax increases could also cause an increase in our costs.
Unavailability of ports of call may adversely affect our results of operations.
We believe that port destinations are a major reason why passengers choose to go on a particular cruise or on a cruise vacation.
The availability of ports is affected by a number of factors, including, but not limited to, existing capacity constraints, security
concerns, adverse weather conditions and natural disasters, financial limitations on port development, exclusivity arrangements that
ports may have with our competitors, local governmental regulations and local community concerns about port development and
other adverse impacts on their communities from additional tourists. Any limitations on the availability of our ports of call or on the
availability of shore excursion and other service providers at such ports could adversely affect our results of operations.
Price increases for commercial airline service for our passengers or major changes or reduction in commercial airline service could
adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our
p
assengers.
Many of our passengers depend on scheduled commercial airline services to transport them to or from the ports where our
cruises embark or disembark. Increases in the price of airfare would increase the overall price of the cruise vacation to our passengers
which may adversely impact demand for our cruises. In addition, changes in the availability of commercial airline services could
adversely affect our passenger’s ability to obtain airfare as well as our ability to fly our passengers to or from our cruise ships which
could adversely affect our results of operations.
Changes or disruptions to the travel agency industry could adversely affect our results of operations.
We rely on travel agencies to generate the majority of bookings for our ships. If the current economic environment continues for
an extended period of time or worsens, these agencies could be adversely impacted and significant disruptions or contractions could
occur to these businesses. This could reduce the number of travel agencies available for us to market and sell our cruises. If these
events were to occur, it could have an adverse impact on our financial condition and results of operations.
A
disruption in our shoreside business may adversely affect our results of operations.
Our principal executive office and shoreside operations are located at the Port of Miami, Florida and we have large call centers
for reservations in Springfield, Oregon, Wichita, Kansas and Addlestone, England. Although we have developed disaster recovery
and similar contingency plans, actual or threatened natural disasters (i.e. hurricanes, earthquakes, tornados, fires, floods), information
systems failure or similar events in these locations may have a material impact to our business continuity and results of operations.
Further, we do not carry business interruption insurance for the majority of our shoreside operations. As such, any losses or damages
incurred by us could have an adverse impact on our results of operations.
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