Royal Caribbean Cruise Lines 2010 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 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

both Moody’s and Standard & Poors. Looking
forward, I am encouraged regarding the sus-
tainability of this “rising tide” of our company’s
returns, credit metrics and product quality. The
primary components of our strategic framework
all have great momentum behind them; targeted
global expansion, slower capacity growth and
cost containment. This momentum, combined
with our fuel hedging program is allowing us to
drive continued product innovation and guest
satisfaction while simultaneously improving our
corporate returns.
Globalization, Brand Expansion and Satisfaction
One important component of our strategy is our
ever diversifying global sourcing of guests. By
next year, we expect that more than 50% of our
customers will come from markets outside of
the United States and importantly, our interna-
tional guests love our product just as much as
our U.S. sourced guests. As we expand globally
we are generating incremental demand for our
cruises which helps to both fill our new berths
and improve our overall pricing power. We see
opportunity for further expansion in Europe,
Asia and the Southern Hemisphere. While these
opportunities increase the demand for our cruises,
we are at the same time slowing our growth
of new berths. The combination of increasing
demand and slowing supply has terrific implica-
tions on our pricing power going forward.
Another significant component of our strategy
is smart capital deployment. We delivered two
amazing vessels during 2010, Allure of the Seas
for our Royal Caribbean International brand and
Celebrity Eclipse for the Celebrity Cruises brand.
Both vessels have lived up to the extraordinary
standards of their predecessors and the Oasis-
and Solstice-class vessels continue to command
pricing and ratings premiums to their peers. As
our capacity growth slows (with only one vessel
delivery in 2011, Celebrity Silhouette and one in
2012, Celebrity Reflection), we are incorporating
some of the innovations from these newest ves-
sels into some of the existing ships in the fleet.
In particular, creative dining concepts, consumer
partnerships and even the addition of new state-
rooms will be carried back to select members
of the existing fleet. These retrofit projects will
enhance our guests’ experiences onboard but
will improve our ticket and onboard revenue
opportunities as well.
Additionally, as we announced in February, we
have undertaken the development of a new class
of vessel for the Royal Caribbean International
brand. “Project Sunshine” will deliver an entirely
new product platform to the company during
LETTER TO SHAREHOLDERS 2
By next year, we expect that more than 50% of our customers will come from markets outside of the United States
and importantly, our international guests love our product just as much as our U.S. sourced guests.