Royal Caribbean Cruise Lines 2008 Annual Report Download - page 20

4 Royal Caribbean Cruises Ltd.
PART I
Brand Awareness and Market Penetration
We continue to increase the recognition and market penetration of
our brands among consumers. Royal Caribbean International and
Celebrity Cruises are established global brands in the contemporary
and premium segments of the vacation industry. Pullmantur is a widely
recognized brand in the Spanish and Latin American contemporary
cruise markets. Azamara Cruises is designed to serve the emerging
deluxe cruise segment. CDF Croisières de France which commenced
operations in May 2008, is targeted to serve the contemporary seg-
ment of the French cruise market.
We increase brand awareness and market penetration of our Royal
Caribbean International brand through communication strategies
designed to emphasize its high quality and excellent-value cruise vaca-
tions. For instance, in 2008, Royal Caribbean International launched a
new brand campaign, “The Nation of Why Not.” This brand campaign
highlights Royal Caribbean International’s global destinations and inno-
vative onboard amenities. Royal Caribbean International’s communica-
tion strategies target adults and families who are vacation enthusiasts
interested in exploring new destinations and seeking new experiences.
These strategies are also designed to attract first-time cruisers to the
cruise vacation industry and to the Royal Caribbean International brand.
In order to attract the experienced cruiser who is seeking new experi-
ences as well as first-time cruisers, Royal Caribbean International provides
multiple choices to guests through a wide array of itineraries, accom-
modations, dining options, onboard activities and shore excursions.
The hallmarks of the brand include friendly and engaging service,
state-of-the-art ships, family programs, entertainment, health and
fitness and energizing onboard and shoreside activities designed for
guests of all ages.
We increase brand awareness and market penetration of our Celebrity
Cruises brand through a series of consumer and trade campaigns
designed to broaden the recognition of its high quality cruise vacations
and drive loyalty and brand preference by emphasizing the personal-
ized service and attention its guests receive. Celebrity Cruises’ commu-
nications target cruisers who seek upscale experiences and appreciate
a high staff-to-passenger ratio, spacious accommodations, fine dining
and spa services.
We increase brand awareness and market penetration of our Pullmantur
brand primarily through advertising campaigns targeted to Spanish-
speaking guests in both Spain and Latin America. All customer-facing
crewmembers speak Spanish, and onboard activities, services, shore
excursions and menu offerings are designed to suit the preferences of
this target market.
We are increasing awareness and market penetration of our Azamara
Cruises brand through trade advertising and education, public relations
and direct communications, designed to target the emerging deluxe
cruise segment of the North American and European cruise markets.
Azamara Cruises’ communications target experienced cruise guests
who prefer a more upscale, intimate and destination-focused cruise
experience on smaller ships with longer itineraries. We believe Azamara
Cruises provides a more exclusive guest experience with its distinctive
combination of personalized service, exceptional cuisine and exotic
destinations, with unique excursions.
We are increasing the awareness and market penetration of our CDF
Croisières de France brand through trade education, public relations
and direct communications, designed to target the contemporary
segment of the French cruise market. CDF Croisières de France’s com-
munications emphasizes that its cruise product is tailored specifically
to French-speaking guests. All customer-facing crewmembers speak
French, and the onboard activities and menu offerings are designed
to suit their target guests’ preferences.
In addition, we also increase brand awareness through our travel agen-
cies who generate the majority of our bookings. We are committed to
further developing and strengthening this very important distribution
channel by facilitating their focus on the unique qualities of each of
our brands.
Fleet Development and Maintenance
We currently have signed agreements with two shipyards providing for
the construction of six new state-of-the-art cruise ships scheduled to
enter service between the third quarter of 2009 and the fourth quarter
of 2012. These additions are expected to result in an increase in our
passenger capacity of approximately 22,200 berths by December 31,
2012, or approximately 28.0% as compared to our capacity as of
December 31, 2008. It is possible that some of our older ships may
be sold or retired during this time period, thus reducing the size of
our fleet. We could also order new ships or purchase existing ships,
thereby further increasing our fleet size; however, we do not believe
that current economic conditions warrant buying or ordering new
ships other than what is currently on order.
The acquisition of the state-of-the-art ships on order, along with our
maintenance programs on our existing fleet will provide us with the
flexibility to deploy our ships among our brand portfolio and expand
into growing international markets. Since our first fleet expansion pro-
gram in 1988, we have increased our average ship size and number of
available berths, which has enabled us to achieve certain economies
of scale.
In addition to our fleet development, we place a strong focus on prod-
uct innovation to drive new demand for our products and stimulate
repeat business from our guests. Innovation of our products is achieved
by introducing new concepts on our new ships and continuously making
improvements to our existing fleet. In order to offer guests a wider range
of activities and amenities and to ensure consistency across our fleets,
we have revitalized some of our older ships to update and refresh their
interiors and to incorporate signature brand elements. Renovations
have included the addition of new balconies, dining and entertainment
options, as well as refurbishments to staterooms and public areas.
Royal Caribbean International. Founded in 1968, Royal Caribbean
International was the first cruise line to design ships for warm water
year-round cruising. Royal Caribbean International operated a modern
fleet in the 1970s and early 1980s, establishing a reputation for high
quality. Between 1988 and 1992, the brand tripled its capacity by
embarking on its first major capital expansion program and taking
delivery of three Sovereign-class ships. In addition, Royal Caribbean
International took delivery of Empress of the Seas in 1990 and from
1995 through 1998, took delivery of six Vision-class ships. Since
delivery, several of these ships have undergone extensive renovations
and refurbishments. This includes the addition of new dining and