Royal Caribbean Cruise Lines 2013 Annual Report Download - page 36
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PART I
could have an adverse impact on our financial condi-
tion and results of operations.
Disruptions in our shoreside operations or our infor-
mation systems may adversely affect our results of
operations.
Our principal executive office and principal shoreside
operations are located at the Port of Miami, Florida
and we have shoreside offices throughout the world.
Actual or threatened natural disasters (e.g., hurricanes,
earthquakes, tornadoes, fires, floods) or similar events
in these locations may have a material impact on our
business continuity, reputation and results of opera-
tions. In addition, substantial or repeated information
systems failures, computer viruses or cyber-attacks
impacting our shoreside or shipboard operations could
adversely impact our business. We do not generally
carry business interruption insurance for our shore-
side operations or our information systems. As such,
any losses or damages incurred by us could have an
adverse impact on our results of operations.
Failure to develop the value of our brands and differ-
entiate our products could adversely affect our results
of operations.
Our success depends on the strength and continued
development of our cruise brands and on the effective-
ness of our brand strategies. Failure to protect and
differentiate our brands from competitors throughout
the vacation market could adversely affect our results
of operations.
The loss of key personnel, our inability to recruit or
retain qualified personnel, or disruptions among our
shipboard personnel due to strained employee relations
could adversely affect our results of operations.
Our success depends, in large part, on the skills and
contributions of key executives and other employees,
and on our ability to recruit and retain high quality
personnel. We must continue to sufficiently recruit,
retain, train and motivate our employees to maintain
our current business and support our projected growth.
Furthermore, as of December 31, 2013, 80% of our
shipboard employees were covered by collective bar-
gaining agreements. A dispute under our collective
bargaining agreements could result in a work stoppage
of those employees covered by the agreements. A loss
of key employees or disruptions among our personnel
could adversely affect our results of operations.
Business activities that involve our co-investment with
third parties may subject us to additional risks.
Partnerships, joint ventures, and other business struc-
tures involving our co-investment with third parties,
such as our joint venture to operate TUI Cruises, gen-
erally include some form of shared control over the
operations of the business and create additional risks,
including the possibility that other investors in such
ventures could become bankrupt or otherwise lack
the financial resources to meet their obligations, or
could have or develop business interests, policies or
objectives that are inconsistent with ours. In addition,
actions by another investor may present additional
risks of operational difficulties or reputational or
legal concerns. These or other issues related to our
co-investment with third parties could adversely
impact our operations.
We rely on third-party providers of various services
integral to the operations of our businesses. These third
parties may act in ways that could harm our business.
In order to achieve cost and operational efficiencies,
we outsource to third-party vendors certain services
that are integral to the operations of our global busi-
nesses, such as our onboard concessionaires, certain
of our call center operations and operation of a large
part of our information technology systems. We are
subject to the risk that certain decisions are subject
to the control of our third-party service providers and
that these decisions may adversely affect our activities.
A failure to adequately monitor a third-party service
provider’s compliance with a service level agreement
or regulatory or legal requirements could result in sig-
nificant economic and reputational harm to us. There
is also a risk the confidentiality, privacy and/or secu-
rity of data held by third parties or communicated
over third-party networks or platforms could become
compromised.
A failure to keep pace with developments in technology
or technological obsolescence could impair our opera-
tions or competitive position.
Our business continues to demand the use of sophis-
ticated technology and systems. These technologies
and systems must be refined, updated, and/or replaced
with more advanced systems in order to continue to
meet our customers’ demands and expectations. If
we are unable to do so in a timely manner or within
reasonable cost parameters or if we are unable to
appropriately and timely train our employees to oper-
ate any of these new systems, our business could
suffer. We also may not achieve the benefits that we
anticipate from any new technology or system, and a
failure to do so could result in higher than anticipated
costs or could impair our operating results.
We may be exposed to risks and costs associated with
protecting the integrity and security of our guests’
and employees’ personal information.
We are subject to various risks associated with the
collection, handling, storage and transmission of
sensitive information, including risks related to com-
pliance with applicable laws and other contractual
obligations, as well as the risk that our systems collect-
ing such information could be compromised. In the
course of doing business, we collect large volumes
of internal and customer data, including personally
identifiable information for various business purposes.