Royal Caribbean Cruise Lines 2011 Annual Report Download - page 6

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I think 2011 actually provides some excellent
insight into our vision for the company. Despite
a litany of thorny external challenges, we made
exceptional progress on many fronts, including:
improving profitability; holding non-fuel costs
to only a 1.3% increase on a comparable basis;
attaining a record improvement in our guest
satisfaction levels; increasing our pen etration
of non-US markets; a record in the number and
quality of awards received for our brands; and
obtaining a credit ratings upgrade bringing us
that much closer to Investment Grade.
The reason for such improvements is very
simple—we have the most talented, dedicated
and innovative people in the world. More impor-
tantly, we also have the most passionate men
and women of any company I know. Their skill
and their passion have made us who we are
today. They are truly awe-inspiring and to them
I express my appreciation.
Globalization, Brand Expansion
and Satisfaction
During 2011 we took delivery of the fourth
Solstice-class vessel, Celebrity Silhouette and
we are eagerly anticipating the delivery of
the fifth and final vessel in the class, Celebrity
Reflection this October. The first of the two
Royal Caribbean International Sunshine-class
vessels delivers in the fourth quarter of 2014
and will be followed by a sister-ship in the sec-
ond quarter of 2015. In addition, our German
joint venture, TUI Cruises, will take delivery of
its first newbuild ship in the Spring of 2014.
We are absolutely thrilled with the market
acceptance and performance of our latest
ships and we are confident that these new fleet
additions will similarly produce transformative
results. With this order book, our average capac-
ity growth from 2012–2015 is approximately
3.5%, a historically low rate which we believe
balances global market expansion and innova-
tion while also allowing for a meaningful reduc-
tion in our debt levels. Looking forward, while
ship deliveries always produce a stepped curve
(with high year-to-year variations), the combi-
nation of slower berth supply growth, better
penetration in our newer global markets and
strategic profitability initiatives will foster
accelerating pricing momentum.
As I alluded to earlier, 2012 marks an important
milestone in the global diversification of our
brands as we expect about 50% of our guests
to come from markets outside of the United
States. In fact, most of our incremental demand
this year will come from Asia and the Southern
Hemisphere as we expand in China, Brazil and
the Australia/New Zealand markets. Our prod-
ucts are being well received in all of these
regions and guest satisfaction scores are rival-
ing those of the traditional markets. We are
thrilled to bring the Voyager of the Seas to
China for the 2012 season, illustrating both our
commitment and excitement regarding this
nascent market. Expanding into these new
markets creates incremental demand for our
cruises, which helps to both fill our new berths
and improve our overall pricing power.
We have reached an important milestone this year as we
are now attracting about half of all our guests from outside
the United States.
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