With Icon of the Seas and other innovative ships, Royal Caribbean is confident it can compete with any destination for family vacations.
Icon of the Seas, the world’s largest cruise ship, is helping Royal Caribbean compete for tourism dollars with Las Vegas, Orlando and other destinations for multigenerational family vacations, said Royal Caribbean Group CEO Jason Liberty.
“We feel like we’ve started this transition from being a traditional cruise vacation to being a world-class multi-generational family option that stands shoulder to shoulder with Orlando and Las Vegas and any land-based destination experience that you could mention,” said Liberty, speaking on a conference call following the release of fourth-quarter results.
Orlando is home to large theme parks like Walt Disney World Resort and Universal Studios. Universal Orlando is building a $1 billion theme park.
Icon of the Seas officially set sail on January 27 with a christening by Lionel Messi. It cost $2 billion, and the 20-floor ship has eight different neighborhoods, each with a different experience for guests. Bookings volume and customer feedback has been “phenomenal,” said Liberty.
The company plans to innovate further to “chip away” at the value gap with land-based vacations. “We’re beginning to really attract a lot of demand from those land-based options with better quality product, more exciting products and great price points,” said Liberty.
A major objective is focused on getting customers to stay in Royal Caribbean’s ecosystem of brands, something land-based experience providers do very well. The cruise company wants to incentivize stronger customer loyalty with repeat experiences.
Royal Caribbean reported revenue for 2023 of $13.9 billion and adjusted Ebitda of $4.5 billion.
Royal Caribbean Cruise Guests Spend Like There’s No Tomorrow
- Strong labor markets, high wages, surplus savings, and elevated wealth levels are fueling onboard spending to record levels.
- In 2024, 70% of guests have booked at least one of their onboard activities before their cruise started.
- This year so far has started with a “record-breaking” start to the wave season. Bookings have consistently outpaced last year across all key products at much higher rates, said Liberty.
- 2024 will see the introduction of the European Union Emission Tax Scheme. It will apply to 40% of Royal Caribbean’s itineraries in Europe but won’t “significantly weigh on earnings,” said Royal Caribbean Naftali Holtz.
Conflicts Cause Itinerary Changes
- Israel has been replaced in its Mediterranean itineraries due to its ongoing war with Hamas. The company has rerouted ships away from the Red Sea due to the Houthi conflict with the U.S..