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15

Left: The christening of Mein

Schiff 4 in Kiel

Below: Guests watch a show

on Anthem of the Seas. Guest

satisfaction scores are up

across the brands

“Clearly we have

become a more

global company,

so we obviously

see our business

impacted by more

global activities”

set ambitious targets to double Royal

Caribbean’s per-share earnings by 2017 over

2014 levels as well as to raise its return on

invested capital by double digits.

The healthy trends reflected in the

results affirm the business decisions that

the company has taken, says Richard Fain.

“They show that our strategy is working. As

we have ensured that our brands perform

at peak levels, guest satisfaction statistics

have reached record levels and that’s driving

some very powerful figures. As the image

of the brand rises, along with the price we

can command, we are generating increased

profits. In turn this justifies building new

and better ships. We are in the middle of a

virtuous circle at the moment.”

He comments: “I think so far economies

around the world are doing significantly

better, helping drive markets. Clearly we

have become a more global company, so we

obviously see our business impacted by more

global activities. Whereas years ago we had

to focus on the US economy, now anything

anywhere in the world impact us, but right

now it is working well for us.”

Growth in capacity to meet the surge in

demand from new markets is continuing

apace, following a period of some years of

slower expansion. Indeed, two of the six

brands that operate under the auspices of

the world’s second largest cruise company

are currently contributing to a capacity

boom in the industry. Royal Caribbean

International launched Anthem of the Seas

in the spring and will welcome both the new

Oasis-class ship Harmony of the Seas (from

STX France) and Quantum-class Ovation

of the Seas (Meyer Werft) in spring 2016.

Then there is TUI Cruises, which brought

Mein Schiff 4 to market in May, and in June

undertook the keel laying for Mein Schiff 5

(due next year) and the start of production

on Mein Schiff 6 (set for 2017 delivery).

Two further options have been confirmed

for the subsequent two years.

Despite all the positive indicators for the

business, international markets have hardly

been stable recently. Indeed, when I spoke

to Fain, the Chinese Yuan had undergone a

second devaluation in a week and ongoing

concern about China’s stalled growth was

worrying investors worldwide. Given the

growing importance of China to Royal

Caribbean’s current and future deployments,

the economic slump in the region has to be

of some concern.

“China is a very important market for

us, and one where our brands have done

particularly well,” says Fain. He admits,

however: “It is an expensive market to

operate in and we will need to continue to

watch it very closely.”

Despite the realism inherent in that last

statement, his outlook remains optimistic

given the company’s success to date in

the region. “The reception of Quantum

of the Seas was incredibly successful, and

it’s clear the market values the fact that

Image: 2015 Ulrich Schaarschmidt