Royal Caribbean Cruise Lines 2012 Annual Report Download - page 19

15
PART I
located throughout the world covering 111 countries.
Historically, our focus has been to primarily source
guests for our global brands from North America.
Over the last several years, we have continued to
expand our focus on selling and marketing our cruise
brands to guests in countries outside of North America
through fleet innovation and by responding to the
itinerary preferences and cultural characteristics of
our international guests. In 2013, we will continue to
focus on the development of key markets in Asia and
we will focus on sourcing guests and adding capacity
to the markets where we expect significant growth
and profitability, such as China and Australia.
We are also focused on expanding our Pullmantur
brand into Latin America, with particular emphasis
in Brazil. We also look for opportunities to acquire
or develop brands tailored to specific markets. TUI
Cruises, our joint venture with TUI AG, is a cruise
brand targeted at the cruise market in Germany.
TUI Cruises complements our other tailored brands
including Pullmantur and CDF Croisières de France.
Passenger ticket revenues generated by sales origi-
nating in countries outside of the United States were
approximately 49% of total passenger ticket revenues
in 2012 and 2011, and 45% in 2010. International guests
have grown from approximately 1.3 million in 2008 to
approximately 2.2 million in 2012.
Focus On Cost Efficiency, Manage Our
Operating Expenditures and Ensure
Adequate Cash and Liquidity
We are committed to our efforts to identify and
implement cost containment initiatives, including a
number of initiatives to reduce energy consumption
and, by extension, fuel costs. These include the design
of more fuel efficient ships as well as the implementa-
tion of more efficient hardware, including propulsion
and cooling systems incorporating energy efficiencies.
In addition, we are focused on maintaining a strong
liquidity position, reducing our debt and improving
our credit metrics. We are also continuing to pursue
our long-term objective of returning our credit ratings
to investment grade. We believe these strategies
enhance our ability to achieve our overall goal of
maximizing our return on invested capital and long-
term shareholder value.
Fleet Revitalization, Maintenance and Expansion
We place a strong focus on product innovation, which
we seek to achieve by introducing new concepts on
our new ships and continuously making improvements
to our fleet. Several of these innovations have become
signature elements of our brands, such as the “Royal
Promenade” (a boulevard with shopping, dining and
entertainment venues), ice skating rinks, rock climbing
walls, miniature golf and full court basketball for the
Royal Caribbean International brand, and the design
of the ships, contemporary quality dining, spacious
staterooms and suites with verandas, spa facilities and
variety of bars and lounges for the Celebrity Cruises
brand. In 2009 and 2010, Royal Caribbean International
took delivery of sister ships, Oasis of the Seas and
Allure of the Seas, which are the largest and most
innovative cruise ships in the cruise industry. With the
same focus on product innovation, Celebrity Cruises
ordered a total of five Solstice-class ships, the last of
which, Celebrity Reflection, was delivered in 2012.
The Solstice-class ships incorporate many new and
improved design features.
Our revitalization and maintenance programs enable
us to incorporate our latest signature innovations
and allow us to benefit from economies of scale by
leveraging our suppliers. Ensuring consistency across
our fleet provides us with the flexibility to redeploy
our ships among our brand portfolio. As part of
these efforts:
• Royal Caribbean International initiated a vessel
revitalization program in 2011 in order to introduce
some of the most popular features of the Oasis-class
ships on certain Freedom-class, Radiance-class and
Vision-class ships. Liberty of the Seas, Freedom of
the Seas, Radiance of the Seas and Splendour of the
Seas were revitalized in 2011 and Rhapsody of the
Seas, Mariner of the Seas, Grandeur of the Seas,
Serenade of the Seas and Enchantment of the Seas
were revitalized in 2012 as part of this revitalization
program. An additional three ships are scheduled
for revitalization in 2013.
• Celebrity Cruises began investing in the revitalization
of the Millennium-class ships in 2010 as Celebrity
Constellation underwent a revitalization of its onboard
amenities and public areas to incorporate certain
Solstice-class features. In 2011 and the early part
of 2012, Celebrity Infinity, Celebrity Summit and
Celebrity Millennium added onboard amenities,
public areas and new staterooms. In 2013, Celebrity
Constellation will undergo a second revitalization to
incorporate additional amenities and staterooms.
We are also committed to building state-of-the-art
ships, and currently our brands, including our 50%
joint venture TUI Cruises, have signed agreements
for the construction of five new ships. These consist
of our recently ordered third Oasis-class ship which
is scheduled to enter service in the second quarter
of 2016, two ships of a new generation of Royal
Caribbean International cruise ships to be known
as the Quantum-class which are scheduled to enter
service in the fourth quarter of 2014 and second
quarter of 2015, respectively, and two ships of a new
generation for TUI Cruises, which are scheduled to
enter service in the second quarter of 2014 and sec-
ond quarter of 2015, respectively. These additions