Tag Archives: Celebrity Edge

Collective Planning Puzzle

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Ovation of the Seas will split her deployment between Australia and Alaska

This year will be a big year for Royal Caribbean Cruises with Royal Caribbean International and Celebrity Cruises introducing new ships. The new ships in turn are the primary drivers generating itinerary changes throughout the fleets, according to Chris Allen, vice president, deployment and itinerary planning, Royal Caribbean Cruises.

Celebrity will be introducing the new Celebrity Edge this fall, sailing seven-day cruises from Port Everglades for the winter season, and Royal Caribbean will introduce the Symphony of the Seas with a summer Mediterranean season.

Royal Caribbean and Celebrity have already announced a large percentage of their deployment over the next two years and by March or April are expecting to have most if not all of their itineraries open for sale through April 2020.

“One big story is the variety of Oasis-class homeports and ports of call,” Allen said. The Symphony enters service this spring and will sail seven-day cruises from Barcelona and Civitavecchia, before moving to Miami for year-round alternating seven-day Eastern and Western Caribbean cruises.

In 2019, when the Oasis goes to the Mediterranean for the summer, the Harmony will move from Port Everglades to Port Canaveral. In addition, the Allure; which is in Miami for the 2018-2019 winter, goes back to Port Everglades; and the Oasis goes to Miami in the fall.

Another headliner for 2019 will be the Ovation going to Alaska from Australia via Hawaii to Vancouver before homeporting in Seattle, where she is replacing the Explorer of the Seas.

“Sailing alongside the Radiance, hardware-wise I think we will have the most interesting ships in Alaska,” Allen noted. “It will also be the first time we have two Quantum-class ships in North America with the Anthem of the Seas on the East Coast.”

While the cruise fleet is growing, many ports are expanding too and new ports have come online, according to Allen, who said it was important to partner with destinations to develop them for the long term, making sure the brands have great destinations to call at.

“We develop itineraries for each brand reflecting their strategic vision; the itineraries must fit what the brands represent and must appeal to the sourcing markets,” he explained.

“We look at guest feedback, the attractiveness of destinations, trends, what is popular, what is not, marketability, and then balance that vs. the cost side, fuel and port costs.

“The beauty of our industry is that compared to hotels, we can move ships and maximize the appeal of the ships and their profitability.

“This formula works and has not changed at the macro level although the input is constantly changing, such as fuel costs and regulations.”

He said that itinerary planning is a big puzzle that the company is always trying to optimize. “We have a small team here that works very hard. The deployments we have are some of the most important decisions we make as a company, it impacts everything we do – it is imperative that we get things right.  We have some very smart and dedicated people on our team, but we rely on the collective knowledge and partnering across the company, with the brands, but also all the other areas and with all the destinations, tour operators, ports and governments around the world.  It really takes a collective effort to put the puzzle together.”

Cruise Lines Agree: Europe Is Back

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The downturn in the European cruise market is history as leaders from Carnival Corporation, Royal Caribbean Cruises and Norwegian Cruise Line Holdings painted a picture of a strong and robust European cruise environment on year-end earnings calls.

Capacity in the Mediterranean will be up significantly this summer, and the same goes for Northern Europe.

“You will recall that successive geopolitical events through the summer of 2016 resulted in a noted depressed demand environment for European sailings. 2017, however, saw an unprecedented turnaround in demand for Europe voyages from our core North American customer, particularly for the brands that were disproportionately negatively impacted in 2016,” said Frank del Rio, president and CEO of Norwegian Cruise Line Holdings, on the company’s year-end earnings call.  “The strength and speed of this turnaround was faster than anticipated, taking only one year for European itinerary pricing to recover and surpass 2015 prior peak levels.”

Royal Caribbean Cruises will position its newest hardware in the Mediterranean, with the Symphony of the Seas this summer followed by the Celebrity Edge’s 2019 summer program in the Mediterranean,.

The Britanna and Costa Magic (Photo: Sergio Ferreira)

“Recent trends have been particularly strong for North America, Europe and Asia Pacific itineraries,” said Richard Fain, chairman and CEO of Royal Caribbean Cruises.

CFO Jason Liberty added:  “Demand for both Mediterranean and Northern Europe sailings has consistently surpassed our expectations with all key source markets booked nicely ahead of last year in both rate and volume.”

At Carnival Corporation, CFO David Bernstein said on the company’s December earnings call that its seasonal Europe program was considerably ahead of the prior year on both occupancy and pricing.

“For our EAA (Europe, Asia, Australia) brands, for European deployment, occupancy is nicely ahead at higher prices,” he said.

“We don’t go into details by brands, but a number of times we have talked about seeing an improving economy in the southern part of Europe for a long time. We had talked about it bouncing along the bottom, but we have started to see some improvement, and we have seen that Costa has done very well in 2017, and we expect it to do well in 2018,” Bernstein continued. “So, we are comfortable and very confident and happy to see the improvement in that part of the world.”

No Concerns in the Caribbean for Royal

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Oasis of the Seas (Photo: Arjan Elemendorp)
Oasis of the Seas
The new Symphony of the Seas will help propel the Caribbean to a record year of cruise capacity.

Despite the uptick in ships and passengers, capacity and pricing is not a concern for Royal Caribbean International.

“After the hurricanes in September, we saw that softness for about four to six or seven weeks but that recovered and picked up and we’re in a good booked position for Q1,” said Michael Bayley, president and CEO, on the company’s Q4 2017 earnings call. “And overall we’re feeling pretty good about the Caribbean for 2018.

“We’re fortunate because we’ve got the Symphony of the Seas coming into the Caribbean towards the end of the year. We have also got Celebrity Edge and we’re introducing Mariner of the Seas after an extensive modernization and revitalization and we’re putting that product into the short market, so that’s quite a lot of volume that’s coming into that market. We’re actually very excited about what that product’s going to do, the bookings are going very well and it’s still outside of its typical booking window because it’s a short product. So overall, we’re feeling okay about the Caribbean.”

As for the booking window, the company opened 2019 deployment four months earlier than in previous years.

Richard Fain, chairman and CEO of Royal Caribbean Cruises, noted the booking window continues to impress.

“Now you may recall that a year ago I said and I’m quoting, that the booking window has stretched as far as we will ever want and I don’t expect to announce another record level bookings a year from today,” Fain said. “Well I wasn’t terribly accurate, here we are a year later and we’re announcing another record level bookings.”

CFO Jason T. Liberty advised that other companies in the Caribbean marketplace may have pricing challenges, but those incidents are not indicative of the entire market.

“There are occasions sometimes when a new product enters the market from competitors and they may have some challenges initially and you may see some fairly aggressive pricing going into the market,” he said. “That can be disruptive but it’s very localized.”