Tag Archives: Richard Fain

Royal Caribbean sells stake in Spanish and French cruise brands

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Royal Caribbean Cruises is selling part of its interest in its Spanish and French cruise operations for an undisclosed sum.

Madrid-based private equity firm Springwater is taking a 51% stake in Pullmantur and Croisières de France, leaving the US cruise giant with a 49% holding through a new joint venture.

Royal Caribbean will retain full ownership of the ships and aircraft currently operated by the two brands, which will be leased into the joint venture.

Chairman and chief executive, Richard Fain, said: “Pullmantur and CDF have a long history of offering authentic, localised cruise vacations to their home markets.

“We look forward to the new focus that this joint venture with Springwater will bring to these companies as they seek to grow.”

He added: “Given the signs of recovery we have seen in the Spanish economy, as well as increased interest in cruising from tourists in France, we think this is the right time to bring together the extensive experience of our deeply valued employees at Pullmantur and CDF with the local travel and tourism expertise of the Springwater team.

“Springwater’s local management presence in Madrid, coupled with RCL’s long-standing history in cruise operations, will provide the foundation for improved returns in the future.”

Ovation of the Seas joins Royal Caribbean’s fleet following delivery ceremony

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Richard Fain and Bernard Meyer
There is a new Royal Caribbean ship officially in the fleet, as of today.

Royal Caribbean took delivery of its 24th cruise ship, Ovation of the Seas, in a ceremony held today in Bremerhaven, Germany.  Ovation of the Seas is the third Quantum-class ship in Royal Caribbean’s fleet.

Royal Caribbean Chairman Richard Fain took delivery of Ovation of the Seas from Meyer Werft Yard’s Managing Partner Bernard Meyer at the official handover ceremony.

“Ovation of the Seas is magnificent,” said Richard. “Our thanks to the Meyer Werft team for their ongoing partnership in designing and building awe-inspiring ships with us.”

“It’s wonderful to welcome Ovation of the Seas to the Royal Caribbean family of ships,” said Michael Bayley, President and CEO, Royal Caribbean International. “We have once again introduced yet another one of the most technologically advanced cruise ships and the very first that has been built for the China market – a market we continue to demonstrate our commitment to expanding. Quantum Class has redefined the status quo, and we are excited for our guests in China and Australia to enjoy their extraordinary vacations onboard this stunner.”

Ovation of the Seas will now sail to Southampton, U.K., where the ship will offer a series of short getaways before she sets sail on her 52-night “Global Odyssey” culminating in the arrival to her homeport in Tianjin, China.

She will begin her first homeport sailing season in China from Tianjin in June 2016. Ovation, together with Quantum of the Seas, Mariner of the Seas, Voyager of the Seas and Legend of the Seas, will make up the largest fleet of any cruise line sailing in China.

RCCL execs pleased with pricing-discipline policy

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Royal Caribbean’s campaign to curb last-minute deep discounts is off to a good start.

So say top execs at Royal Caribbean Cruises Ltd., who had several things to say about what they’re calling Royal’s “price integrity policy,” in talking to Wall Street analysts last week.

Starting in March, Royal said it would stop filling its ships by offering very low prices within a month of sailing. Depending on the itinerary, Royal said it would stop discounting either 10, 20 or 30 days before the ship leaves the dock.

In an earnings call with analysts, Royal Chairman Richard Fain said the company was extending the policy in some cases to apply to bookings within 40 days of departure.

That is what is called incremental progress. If Royal sticks with it, there may be positive results for both Royal and travel agents.

Fain said that Royal is trying hard to be more consistent in its pricing, in part to keep travel agents in its corner.

“There’s probably one thing that frustrates the travel agents that we work with as much as anything else, [and it] is those late last-minute discounts,” he said. “And we can’t afford to frustrate them.”

A bit later in the call, CFO Jason Liberty raised a second reason why curbing the deep-discount cycle will benefit Royal.

“It’s really very important to the branding,” said Liberty. It lacks credibility, Liberty said, to contend that you are a brand that is high quality and has high respect in the industry — “and you can have us for half-price.”

“So the ability to maintain your image as a higher-quality product, which really has to permeate everything you do, is probably a big driver, as big a driver of our thinking as anything else,” Liberty said.

Fain said Royal recognizes that the policy is costing money in the short term. But Royal’s second-quarter earnings were up 34% from a year ago, so any losses are being offset elsewhere.

“It’s still early days, but the impact we have seen from a load factor perspective is relatively small, and it’s in line with our expectations,” Fain said.