Royal Caribbean Cruise Lines 2010 Annual Report Download - page 12

PART I
ROYAL CARIBBEAN CRUISES LTD. 9
As used in this Annual Report on Form 10-K, the terms
“Royal Caribbean,” the “Company,” “we,” “our” and
“us” refer to Royal Caribbean Cruises Ltd. and the
terms “Royal Caribbean International,” “Celebrity
Cruises,” “Pullmantur,” “Azamara Club Cruises,” and
“CDF Croisières de France” refer to our cruise brands.
In accordance with cruise vacation industry practice,
the term “berths” is determined based on double
occupancy per cabin even though many cabins can
accommodate three or more passengers.
This Annual Report on Form 10-K also includes trade-
marks, trade names and service marks of other com-
panies. Use or display by us of other parties’ trademarks,
trade names or service marks is not intended to and
does not imply a relationship with, or endorsement or
sponsorship of us by, these other parties other than as
described herein.
ITEM 1. BUSINESS
GENERAL
Royal Caribbean International was founded in 1968.
The current parent corporation, Royal Caribbean
Cruises Ltd., was incorporated on July 23, 1985 in the
Republic of Liberia under the Business Corporation
Act of Liberia.
We are the world’s second largest cruise company
operating 40 ships in the cruise vacation industry
with an aggregate of approximately 92,300 berths
as of December 31, 2010. Our brands include Royal
Caribbean International, Celebrity Cruises, and
Azamara Club Cruises along with our Pullmantur
brand, which has been custom tailored to serve the
cruise markets in Spain, Portugal and Latin America
and our CDF Croisières de France brand which pro-
vides us with a custom tailored product targeted at
the French market. In addition, we have a 50% invest-
ment in a joint venture which operates the brand TUI
Cruises, specifically tailored for the German market.
Our ships operate on a selection of worldwide itiner-
aries that call on approximately 420 destinations on
all seven continents. In addition to our headquarters
in Miami, Florida, we have offices and a network of
international representatives around the world which
focus on our international guest sourcing.
We compete principally on the basis of innovation
and quality of ships, quality of service, variety of itin-
eraries, choice of destinations and price. We believe
that our commitment to build state-of-the-art ships
and to invest in the maintenance and revitalization of
our fleet to, among other things, incorporate our latest
signature innovations, allows us to continue to attract
new and loyal repeat guests and expand into growing
international markets and provides us with the flexibility
to deploy our ships among our brand portfolio.
We believe cruising continues to be a widely accepted
vacation alternative due to its inherent value, extensive
itineraries and variety of shipboard and shore-side
activities. In addition, we believe that our products
appeal to a large consumer base and are not depen-
dent on a single market or demographic. Further, we
believe our global brands possess the versatility to
enter multiple cruise market segments within the
cruise vacation industry. As a result, we strategically
manage our brands as a single business with the ulti-
mate objective of maximizing shareholder value.
OUR BRANDS
Royal Caribbean International
We currently operate 22 ships with approximately
62,000 berths under our Royal Caribbean International
brand, offering cruise itineraries that range from two
to 18 nights. Royal Caribbean International offers a
variety of itineraries to destinations worldwide, includ-
ing Alaska, Asia, Australia, Bahamas, Bermuda, Canada,
the Caribbean, Europe, Hawaii, the Middle East, the
Panama Canal, South America and New Zealand.
Royal Caribbean International is positioned at the
upper end of the contemporary segment of the cruise
vacation industry, generally characterized by cruises
that are seven nights or shorter and feature a casual
ambiance. We believe that the quality of the Royal
Caribbean International brand also enables it to attract
consumers from the premium segment, which is gen-
erally characterized by cruises that are seven to 14
nights and appeal to the more experienced guest who
is usually more affluent. This allows Royal Caribbean
International to achieve among the broadest market
coverage of any of the major cruise brands in the
vacation industry.
Royal Caribbean International’s strategy is to attract
an array of vacationing consumers by providing a
wide variety of itineraries and cruise lengths with
multiple innovative options for onboard dining, enter-
tainment and other onboard activities. Popular prod-
uct innovations include surf simulators, an interactive
water park called the H2O Zone™, “Royal Promenades”
(boulevards with shopping, dining and entertainment
venues), ice skating rinks, bungee jumping trampolines
and rock climbing walls.
Most recently, in October 2009 and October 2010,
Royal Caribbean International took delivery of the
sister ships, Oasis of the Seas and Allure of the Seas,
respectively, which are the largest and most innovative
cruise ships in the industry. In addition, during 2010,
Royal Caribbean International introduced DreamWorks
Animations® themed activities onboard certain ships