Royal’s Onboard Revenue Spike Driven by Experiences

Independence of the Seas

Onboard revenue for Royal Caribbean Cruises was up significantly in the company’s first quarter, going from $602 million in 2018 to $729 million in 2019.

“Guests spend for onboard activities has continued to shift towards areas that involve experiences over buying things and this quarter was no different,” said Jason T. Liberty, CFO, Royal Caribbean Cruises.

Passengers spent an average of $69.10 (gross) per day in the first quarter compared to $62.55 a year prior.

Liberty said shore excursions and various types of packages were key in driving the onboard revenue performance.

“We saw an over the index of spend on shore excursions and products like beverage packages, internet packages and again it is more focused on the experiential stuff versus seeing more spend occur within the retail shops,” he said.

German cruise line introduces social media access fee

German line AIDA Cruises is introducing a flat fee for internet access to social media networks on board its ships.

Passengers will be able to share their experiences on board with friends on social networks, such as Facebook, Twitter, Instagram or WhatsApp for €4 a day or €19 a week.

AIDA claims to be “dramatically increasing” the bandwidth and speed of internet connections in addition to the new social media flat rate.

New internet packages to be introduced soon will allow unlimited access rather than be based on minutes of use.

Three options will be available with packages costing €25 for 250MB, €39 for 500MB and €99 for 3 GB of access.

Thomas Pfitzer, chief technical officer at the Carnival Corporation-owned line, said: “The use of mobile devices is continuously growing. We want to accommodate this trend and are offering our guests an additional service with the flat rate.

“With these package offers, we help keep the costs of satellite-based internet connections at sea reasonable and calculable for our guests.”

Six ships in the fleet will be equipped with enhanced internet access by next month, with completion due by November.

The new internet packages and fees will be part of the standard offering on new flagship AIDAprima (pictured).

Passengers who book internet packages in advance through the MyAIDA portal will receive a 5% discount.

Royal Caribbean tests Internet capability by offering free WiFi

Royal Caribbean International has given away Internet access for the past couple of weeks on its newest ship, Quantum of the Seas.

The ship is one of three to be rigged for communications with the O3b mid-level satellite network, that provides for greater bandwidth and communications speeds.

The debut of a new, faster Internet service on Royal Caribbean International ships is only weeks away.

Royal Caribbean Cruises Ltd. Chairman Richard Fain said in a conference call with Wall Street analysts on Thursday that the system is now in testing on Oasis of the Seas, and full rollout is expected in early summer.

Provider O3B is using a series of mid-orbit satellites for the service, rather than one geostationary satellite orbiting at 22,000 miles. That means signals travel shorter distances, increasing speeds.

Fain said that the change will give Oasis “more Internet bandwidth than every other cruise ship of every other cruise line in the world combined.”

The service is initially targeted for Oasis of the Seas and the upcoming Quantum-class ships.

Internet service with speeds closer to those on land will help Royal Caribbean attract Millennial generation cruisers (ages 14-34) in particular, Fain said.

Royal Caribbean President Michael Bayley said guests were encouraged to use as much Internet capacity as they wanted or needed at no charge during recent cruises.

“On Quantum, because we have so much bandwidth, over the past three weeks we’ve given out free WiFi. I mean free, free, free all the time,” Bayley told a group of travel agents on Freedom of the Seas over the weekend.

Royal Caribbean officials said the experiment was a kind of “stress test” to see just how much demand the system can handle.

“So we’ve been monitoring the consumption of bandwidth when we let everybody have free bandwidth — the crew, the guests, everybody — and we’ve only used a fraction of it,” Bayley said.

The standard charge on most Royal Caribbean ships for Internet access is 65 cents a minute.

Cruise line officials said it is unlikely that Internet access will become free on ships equipped with O3b. The current working model is to charge like many land resorts a fee of $10 to $15 a day for unlimited access, Royal Caribbean spokesman Harry Liu said.

There will be a premium package for large-bandwidth usage like streaming video, and Bayley said the line is exploring what it can do with such applications.

“Soon we’re going to start speaking more about this capability,” Bayley told the agents. “Because of the scale and size of this bandwidth, we could do streaming videos. It’s genuinely as good as being in a city somewhere in the United States. It is better than that.”