Royal Caribbean Cruise Lines 2014 Annual Report Download - page 5

returns from the ships we have sailing in the
region, gave us the confidence to announce
that the third Quantum class vessel, Ovation of
the SeasSM, will make her debut in Tianjin in 2016.
Our capacity in Asia continues to increase,
and our investments in the region will continue
to expand in order to ensure we maintain our
leadership position in the market.
While growing revenue is critical to our success,
another of our main focus areas continues to
be controlling costs, and it is fair to say that
cost discipline is a part of our DNA. You may
recall that in 2013 we beat our budgets across
the board, and for 2014 our cost guidance was
flat to slightly down. We finished the year down
0.6% which provides further evidence that our
people fully embrace the importance of this
pillar. It is especially gratifying to see this level
of focus on costs while strategically investing
in technology enhancements and in growing
markets, like China.
We know keeping our capacity growth mod-
erate is prudent, and our anticipated growth
through 2017 remains unchanged. The deliv-
ery of Quantum of the SeasSM in October
marked the first year, in almost two years, that
our brands took delivery of a new vessel. In
April 2015 we took delivery of Quantum’s sister
ship, Anthem of the SeasSM, which will be fol-
lowed by Ovation of the SeasSM and Harmony
of the SeasSM in 2016, and no new vessels in 2017.
The new vessels not only deliver significantly
better revenues, they are also significantly more
energy efficient. We expect these new ships
to drive considerable demand and to be a
catalyst to attaining our Double-Double targets.
In the fourth quarter of 2014 we began to
experience extreme volatility in the fuel and
currency markets. While the price of oil declined
dramatically, it was coupled with the strength-
ening of the US Dollar. As we entered 2015,
fuel began to rise modestly and the US Dollar
has continued to appreciate. While over time
these two factors have historically had an
inverse correlation, offsets are not exact and
short-term movements are inevitable. This will
create fluctuations in our earnings, but it does
not change the underlying fundamentals of
our business. In fact, I have never been more
bullish about our future.
Our brands have never been stronger. 2014
was a turning point, and 2015 will be another
important step towards our Double-Double
goals. We will leverage our innovative and
differentiated hardware, global footprint, dis-
tinct brands, and exceptional employees to
deliver another step-change in earnings for
our valued shareholders.
It is gratifying to get to do work we are passion-
ate about and to welcome guests onboard the
most exciting ships in the world. We could not
do it without the unwavering support we receive
from our Board of Directors, the wonderful
employees who provide such great vacations
and you, our shareholders. We are grateful for
your continued acknowledgement of our prog-
ress and the overall strength of our business.
RICHARD D. FAIN
Chairman & Chief Executive Officer
Royal Caribbean Cruises Ltd. 3