Royal Caribbean Cruise Lines 2011 Annual Report Download - page 20

2011 ANNUAL REPORT 16
PART I
including the upgrade of guest suites and staterooms,
and the addition of two new specialty restaurants.
During 2012, Azamara Quest will undergo renovations
of its onboard amenities and public areas.
Pullmantur. Pullmantur was founded in 1971 and for
approximately 20 years it was dedicated to the land
tour business in Europe primarily within Spain. As of
December 31, 2011, Pullmantur operated five ships
which range in size from approximately 1,000 to 2,300
berths for a total of 7,650 berths. In February 2012,
we entered into an agreement to bareboat charter
our ship Ocean Dream to an unrelated party for a
period of six years from the transfer date. The charter
agreement provides a renewal option exercisable by
the unrelated party for an additional four years. We
anticipate delivery of Ocean Dream will take place
in April 2012.
In May 2007, Zenith was redeployed from Celebrity
Cruises to Pullmantur. Empress of the Seas and
Sovereign of the Seas were redeployed from Royal
Caribbean International to Pullmantur in March 2008
and November 2008, respectively. Before redeploy-
ment to Pullmantur, each ship underwent revitaliza-
tions to incorporate Pullmantur’s signature elements
which include Spanish signage, logos and expanded
disco areas.
CDF Croisières de France. Founded in 2007, CDF
Croisières de France is designed to serve the contem-
porary segment of the French cruise market by pro-
viding a custom-tailored product targeted to French
cruise guests. Until November 2011, CDF Croisières
de France operated Bleu de France under a one-year
charter agreement following the sale of the ship from
CDF Croisières de France to an unrelated third party
in November 2010. In March 2012, Horizon will be
redeployed from Pullmantur to CDF Croisières de
France. The ship will enter service with CDF Croisières
de France in the second quarter of 2012, following a
revitalization to incorporate signature brand elements.
TUI Cruises. In 2008, we formed a joint venture with
TUI AG, a European tourism and shipping company to
operate TUI Cruises, a German cruise line which began
operating Mein Schiff I (formerly Celebrity Galaxy).
In 2011, we sold Celebrity Mercury to TUI Cruises, to
serve as its second ship. The ship was renamed Mein
Schiff II and began sailing in May 2011 following revi-
talizations to incorporate signature brand elements.
TUI Cruises currently has an aggregate capacity of
approximately 3,800 berths. In addition, during 2011,
TUI Cruises entered into a construction agreement to
build its first newbuild ship, scheduled for delivery in
the second quarter of 2014. TUI Cruises has an option
to construct a second ship of the same class, which
will expire on October 31, 2012.
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 in our
Royal Caribbean International, Celebrity Cruises,
Azamara Club Cruises and Pullmantur brands to new
markets and itineraries throughout the world. The
portability of our ships and our investment in infra-
structure allows us to expand into new markets and
helps us reduce our dependency on any one market by
allowing us to create “home ports” around the world.
In addition, it allows us to readily deploy our ships to
meet demand within our existing cruise markets.
Our ships offer a wide selection of itineraries that call
on approximately 460 ports in 96 countries, spanning
all seven continents. We are focused on obtaining the
best possible long-term shareholder returns by oper-
ating in established markets while growing our pres-
ence in developing markets. New capacity allows us
to expand into new markets and itineraries. Our brands
have expanded their mix of itineraries, while strength-
ening our ability to penetrate the Asian, Caribbean,
European, and Latin American markets further. We
continuously attempt to place our vessels in those
markets and itineraries where we are able to maximize
our long-term profitability. In addition, 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
increased deployment to Australia and Latin America.
We continue to focus on the acceleration of Royal
Caribbean International’s, Celebrity Cruises’ and
Azamara Club Cruises’ strategic positioning as global
cruise brands. In 2011, Royal Caribbean International
increased its year-round deployment offerings, includ-
ing more drive-to and locally sourced products for
North American and international markets. During
2011, eleven of Royal Caribbean International’s ships
sailed in Europe, making the brand an industry leader
in European capacity during the summer season.
Approximately 70% of the eleven ships were marketed
to the European market for guest sourcing. During
the Northern Hemisphere’s winter, Royal Caribbean
International increased its capacity in Australia by
redeploying a second ship to the region.
During 2012, Royal Caribbean International will con-
tinue its international expansion by seasonally adding
a second ship in Asia and a third ship in Australia,
adding new departure ports in Southern Europe in
order to target guests in key source markets in the
region and increasing capacity in Northern Europe.
The brand has also modified certain of its itineraries
for 2012 due to continuing geopolitical unrest in
Northern Africa and Greece.