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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, according to 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 offering a unique experience for guests. According to Liberty, bookings volume and customer feedback have been “phenomenal.”
The company plans to continue innovating to close the value gap with land-based vacations. Liberty mentioned, “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.”
An important focus for Royal Caribbean is to encourage customers to stay within its ecosystem of brands, similar to how land-based experience providers achieve strong 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 driving 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 has had a “record-breaking” start to the wave season, with bookings consistently surpassing last year’s numbers at much higher rates, as per Liberty.
- 2024 will see the introduction of the European Union Emission Tax Scheme, which will affect 40% of Royal Caribbean’s itineraries in Europe but is not expected to have a significant impact on earnings, according to Royal Caribbean’s 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..
