Royal Caribbean Cruise Lines 2010 Annual Report Download - page 14

Download and view the complete annual report

Please find page 14 of the 2010 Royal Caribbean Cruise Lines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

PART I
ROYAL CARIBBEAN CRUISES LTD. 11
guests, including exercise facilities, swimming pools,
beauty salons, gaming facilities, shopping, dining,
certain complimentary beverages, and entertainment
venues. Pullmantur’s tour operations sell land-based
travel packages to Spanish guests including hotels
and flights primarily to Caribbean resorts, and land-
based tour packages to Europe aimed at Latin
American guests.
CDF Croisières de France
We currently operate one ship, Bleu de France, with
approximately 750 berths under our CDF Croisières
de France brand, offering four to ten night cruise itin-
eraries. CDF Croisières de France is designed to serve
the contemporary segment of the French cruise market
by providing us with a brand custom-tailored for
French cruise guests. In November 2010, Bleu de
France was sold to an unrelated party. As part of the
sale agreement, we chartered Bleu de France from
the buyer for a period of one year from the sale date
in order to fulfill existing guest commitments. At the
end of the charter period, Pullmantur will redeploy
Horizon to CDF Croisières de France and prior to its
redeployment the ship will undergo renovations to
incorporate signature brand elements.
CDF Croisières de France offers seasonal itineraries
to the Mediterranean. CDF Croisières de France offers
a variety of onboard services, amenities and activities,
including entertainment venues, exercise and spa
facilities, fine dining, and gaming facilities.
TUI Cruises
In 2008, we formed a joint venture with TUI AG, a
European tourism and shipping company which owns
51% of TUI Travel. The joint venture operates TUI
Cruises, designed to serve the contemporary and
premium segments of the German cruise market by
offering a custom-tailored product for German guests.
All onboard activities, services, shore excursions and
menu offerings are designed to suit the preferences
of this target market. TUI Cruises operates one ship,
Mein Schiff, with a total of approximately 1,850 berths.
As previously announced, we will be selling Celebrity
Mercury to TUI Cruises to serve as its second ship.
The sale is expected to close at the end of February
2011 and the ship will enter service with TUI Cruises
in the second quarter of 2011, under the name Mein
Schiff 2, following an extensive refurbishment.
INDUSTRY
Cruising is considered a well established vacation sec-
tor in the North American market, a growing sector in
the European market and a developing but promising
sector in several other emerging markets. Industry
data indicates that a significant portion of cruise guests
carried are first-time cruisers. We believe this could
present an opportunity for long-term growth and a
potential for increased profitability.
We estimate that the global cruise industry carried
18.7 million cruise passengers in 2010 compared to
17.3 million cruise passengers carried in 2009. We
estimate that the global cruise fleet was served by
approximately 400,000 berths on approximately 281
ships by the end of 2010. There are approximately
20 ships with an estimated 53,000 berths that are
expected to be placed in service in the global cruise
market between 2011 and 2014. The majority of cruise
passengers in the cruise vacation industry have his-
torically been sourced from North America, and to a
lesser extent, Europe.
North America
Although the North American cruise market has his-
torically experienced significant growth, the compound
annual growth rate in cruise passengers for this market
was approximately 0.9% from 2006 to 2010. This
more limited growth is attributable in large part to the
recent international expansion within the cruise indus-
try. We estimate that North America was served by
136 ships with approximately 190,000 berths at the
beginning of 2006 and by 151 ships with approximately
241,000 berths by the end of 2010. There are approxi-
mately 13 ships with an estimated 36,000 berths that
are expected to be placed in service in the North
American cruise market between 2011 and 2014.
Europe
In Europe, cruising represents a much smaller sector
of the vacation industry; however, it has experienced
a compound annual growth rate in cruise passengers
of approximately 12.4% from 2006 to 2010 and we
believe this market has significant continued growth
potential. We estimate that Europe was served by 100
ships with approximately 94,000 berths at the begin-
ning of 2006 and by 114 ships with approximately
144,000 berths by the end of 2010. There are approx-
imately seven ships with an estimated 16,000 berths
that are expected to be placed in service in the
European cruise market between 2011 and 2014.