Royal Caribbean Cruise Lines 2010 Annual Report Download - page 15

2010 ANNUAL REPORT 12
PART I
The following table details the growth in the global, North American and European cruise markets in terms of
cruise passengers and estimated weighted-average berths over the past five years:
Year
Global Cruise
Passengers(1)
Weighted-Average
Supply of Berths
Marketed Globally(1)
North American
Cruise
Passengers(2)
Weighted-Average
Supply of Berths
Marketed in
North America(1)
European Cruise
Passengers(3)
Weighted-Average
Supply of Berths
Marketed in
Europe(1)
      
      
      
      
      
(1) Source: Our estimates of the number of global cruise passengers, and the weighted-average supply of berths marketed globally, in North
America and Europe are based on a combination of data that we obtain from various publicly available cruise industry trade information sources
including Seatrade Insider and Cruise Line International Association. In addition, our estimates incorporate our own statistical analysis utilizing
the same publicly available cruise industry data as a base.
(2) Source: Cruise Line International Association based on cruise passengers carried for at least two consecutive nights for years 2006 through
2009. Year 2010 amounts represent our estimates (see number 1 above).
(3) Source: European Cruise Council for years 2006 through 2009. Year 2010 amounts represent our estimates (see number 1 above).
We compete with a number of cruise lines; however,
our principal competitors are Carnival Corporation &
plc, which owns, among others, Aida Cruises, Carnival
Cruise Lines, Costa Cruises, Cunard Line, Holland
America Line, Iberocruceros, P&O Cruises and Princess
Cruises; Disney Cruise Line; MSC Cruises; Norwegian
Cruise Line and Oceania Cruises. Cruise lines compete
with other vacation alternatives such as land-based
resort hotels and sightseeing destinations for consum-
ers’ leisure time. Demand for such activities is influ-
enced by political and general economic conditions.
Companies within the vacation market are dependent
on consumer discretionary spending.
OPERATING STRATEGIES
Our principal operating strategies are to:
• enhance our revenues, manage the efficiency of our
operating expenditures and ensure adequate cash
and liquidity, with the overall goal of maximizing our
return on invested capital and shareholder value,
• increase the awareness and market penetration of
our brands throughout the world,
• expand our fleet with the new state-of-the-art cruise
ships recently delivered and on order, while transfer-
ring key innovations to our existing fleet,
• capitalize on the portability and flexibility of our
ships by deploying them into those new markets
and itineraries that provide opportunities to opti-
mize returns, while continuing our focus on existing
key markets,
• continue to expand and diversify our passenger mix,
• protect the health, safety and security of our guests
and employees and protect the environment in which
our vessels and organization operate,
• further improve our technological capabilities, and
• maintain strong relationships with travel agencies,
the principal industry distribution channel, while
enhancing our direct consumer outreach programs.
Enhance Our Revenues, Manage Our Operating
Expenditures and Ensure Adequate Cash and Liquidity
We are focused on maximizing revenues, improving
yields and strengthening our balance sheet while
strategically managing the efficiency of our operating
expenditures. We maximize revenues and yields
through various programs prior to, during and after a
cruise vacation aimed at increasing our ticket prices
and occupancy. We are continually committed to
improving our cost efficiencies and have implemented
various cost-containment initiatives. In addition, to
ensure adequate cash and liquidity, during the eco-
nomic downturn, we discontinued our quarterly divi-
dend commencing in the fourth quarter of 2008 and
have tactically managed our capital expenditures.
We believe these strategies will enhance our ability of
achieving our overall goal of maximizing our return
on invested capital and shareholder value.
Brand Awareness and Market Penetration
We continue to increase the recognition and market
penetration of our brands among consumers through-
out the world. Royal Caribbean International and
Celebrity Cruises are established global brands in the
contemporary and premium segments of the vacation
industry. Azamara Club Cruises is designed to serve
the up-market cruise segment. Pullmantur is a widely
recognized brand in the Spanish, Portuguese and
Latin American contemporary cruise markets. CDF
Croisières de France is targeted to serve the contem-
porary segment of the French cruise market.
We increase brand awareness and market penetration
of our Royal Caribbean International brand through
communication strategies designed to emphasize
its high quality and excellent-value cruise vacations.