Royal Caribbean Cruise Lines 2013 Annual Report Download - page 6

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whole segment; Pullmantur’s Latin strategy is beginning
to gel; Croisières de France is expanding rapidly in
France; and TUI cruises continues to beat expectations
while preparing to take delivery of its new ship.
A Quantum Leap in the Cruising Experience
2014 also brings us tangible proof of our commit-
ment to pushing the boundaries of what is possible in
the cruise experience. Quantum of the Seas debuts our
first new class of ships since 2009. The ship is a marvel
in ways that are readily apparent—like a 14-passenger
capsule, inspired by the London Eye, that lifts guests
more than 300 feet over the seas for spectacular views.
As with previous Royal Caribbean launches, Quantum
is the most eagerly awaited ship in the cruise industry.
When you take a step back, you will realize that
every Royal Caribbean ship has been the most antici-
pated in the industry, and there is a clear reason for
that—we are maniacal about innovation and continuous
improvement.
Ready for the Markets That Are Ready to Cruise
We made a conscious choice years ago to build
global brands, rather than take a purely multi-regional
approach. This model allows us to shift sourcing to the
highest demand markets to take advantage of the most
profitable consumer segments. That choice has proven
prescient in several ways, particularly in markets with a
strengthening middle class: as consumers find them-
selves with the resources to take a cruise vacation they
know the brands they want and many of those brands
are ours. Royal Caribbean International has been well
received in the China market, and we anticipate
the opportunity to build the brand even further in that
vital market.
In a similar way, 2014 is a year of transition for
Pullmantur. Pullmantur has faced the biggest challenges
of any of our businesses and has been a substantial
drag on the whole group’s results. That will change. We
have divested the non-core businesses which included
a brick and mortar travel agency, a land tour company
and a small airline operation. These businesses were
not significant to our overall profitability and selling these
businesses allows the Pullmantur brand to be focused
on its core cruise business. During 2014, we expect to
reinvigorate our position in Latin America, while protect-
ing our leadership position in Spain. We are confident
that the upside from Pullmantur will be meaningful to
our results as they continue to recover throughout 2015
and beyond. Pullmantur—and the difficult economic
environment it operates in—has been our biggest chal-
lenge; but it is ready to shift to becoming one of our
biggest opportunities.
Continuous Improvement Knows
No Boundaries
Our year of peak revenue yields was 2008 and
while we’re almost back to those levels we are still not
satisfied. Since 2006 we’ve added the Oasis, Solstice
and Freedom classes to our fleet which today make up
roughly 40% of our capacity. These ships are highly
differentiated and continue to generate premium yields.
We are focused on the revenue and we believe that
we have several factors that will help propel our yield
growth moving forward: Quantum class and Oasis III,
growth in China, Celebrity’s premium positioning,
improvement in the European economies, strong
onboard revenue, and Pullmantur’s strategy.
Grateful for the Opportunity to Do the Work
We Love
We are all fortunate to work in a business that is
focused on making people happy, bringing families
together, and showing people the wonders of our world
and its oceans. We are even more fortunate to work
with some of the most talented and dedicated co-work-
ers you could ever hope to find. Our success for the last
43 years has been driven by the extraordinary dedica-
tion and skill of our employees. Their passion and their
skill are second to none and inspire me every day. The
same can be said about the steadfast support of our
Board of Directors, the investment community and you,
our shareholders. I am grateful for your commitment to
our company and for your recognition of the underlying
strength of our business.
It is our pleasure to welcome everyone aboard the
best ships in the world, and our opportunity to offer our
guests the finest vacation they will ever have.
Richard D. Fain
Chairman and Chief Executive Officer
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