Royal Caribbean Cruise Lines 2013 Annual Report Download - page 20
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PART I
36 independent international representatives located
throughout the world covering 112 countries. Histor-
ically, 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 by tai-
loring itineraries and onboard product offerings to the
cultural characteristics and preferences of our inter-
national guests. In addition, we explore opportunities
that may arise to acquire or develop brands tailored
to specific markets.
Passenger ticket revenues generated by sales origi-
nating in countries outside of the United States were
approximately 48% of total passenger ticket revenues
in 2013 and 49% in 2012 and 2011. International guests
have grown from approximately 1.5 million in 2009 to
approximately 2.3 million in 2013.
Cost Efficiency, Operating Expenditures and
Adequate Cash and Liquidity
We continue our commitment to identify and imple-
ment cost containment initiatives. Our most recent
initiatives relate to realizing economies of scale and
improving service delivery to our travel partners and
guests by restructuring and consolidating our global
sales, marketing, general and administrative structure.
We also continue our initiatives to reduce energy con-
sumption and, by extension, fuel costs. These include
the design of more fuel-efficient ships as well as the
implementation of more efficient hardware, including
propulsion and cooling systems incorporating energy
efficiencies.
We are focused on maintaining a strong liquidity posi-
tion, reducing our debt and improving our credit met-
rics. In addition, we continue 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 improve-
ments 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) for the Royal
Caribbean International brand and enhanced design
features found on our Solstice-class ships for the
Celebrity Cruises brand.
We are committed to building state-of-the-art ships
and our brands, including our 50% joint venture TUI
Cruises, currently have signed agreements for the
construction of six new ships. These consist of three
Quantum-class ships which are scheduled to enter
service in the fourth quarter of 2014 and the second
quarters of 2015 and 2016, one Oasis-class ship, which
is scheduled to enter service in the second quarter
of 2016, and two ships of a new generation for TUI
Cruises, which are scheduled to enter service in the
second quarters of 2014 and 2015. These additions
are expected to increase our passenger capacity by
approximately 22,850 berths by December 31, 2016,
or approximately 23.1%, as compared to our capacity
as of December 31, 2013. We continuously evaluate
opportunities to order new ships, purchase existing
ships or sell ships in our current fleet.
Our revitalization and maintenance programs enable
us to incorporate many of our latest signature inno-
vations throughout the brand fleet and allow us to
benefit from economies of scale by leveraging our
suppliers. Ensuring consistency across our fleet pro-
vides us with the flexibility to redeploy our ships
among our brand portfolio.
Markets and Itineraries
In an effort to penetrate untapped markets, diversify
our consumer base and respond to changing economic
and geopolitical market conditions, we continue to
seek opportunities to optimally deploy ships to new
and stronger markets and itineraries throughout the
world. The portability of our ships allows us to readily
deploy our ships to meet demand within our existing
cruise markets. We make deployment decisions with
the goal of optimizing the overall profitability of our
portfolio, with these decisions generally made 12 to
18 months in advance. Additionally, the infrastructure
investments we have made in creating a flexible global
sourcing model has made our brand relevant in a
number of markets around the world, which allows us
to be opportunistic and source the highest yielding
guests for our itineraries.
Our ships offer a wide selection of itineraries that call
on approximately 490 destinations in 103 countries,
spanning all seven continents. We are focused on
obtaining the best possible long-term shareholder
returns by operating in established markets while
growing our presence in developing markets. New
capacity allows us to expand into new markets and
itineraries. Our brands have expanded their mix of
itineraries while strengthening our ability to further
penetrate the Asian, Australian, Caribbean, and Latin
American markets. Additionally, in order to capitalize
on the summer season in the Southern Hemisphere
and mitigate the impact of the winter weather in the
Northern Hemisphere, our brands have focused on
deployment in Australia and Latin America during
that period.