CNN interviewed Royal Caribbean CEO Adam Goldstein to talk about where Royal Caribbean is right now and its future. Topics of the interview included the state of the cruise industry, the arrival of the Allure of the Seas and an unusual debate over which really is the largest cruise ship. Here are some highlights of the interview from Adam.
There will always be some percentage of the business that comes in the form of discount. It's the nature of the business that there will be some of that, but I think it's fair to say that while there still are attractive offers and discounts available on the marketplace today, they're not as broad or as deep as what we were doing in the midst of the recession or in the deepest part of the recession.
Goldstein on adding Starbucks to other ships in the fleet: We need to see what happens here because this is a test case. We're focused on Allure of the Seas and then if it is a big success we'll look at other possibilities.
Goldstein on adding ships larger than Allure: In the near term, no. We don't have any current plans to go beyond Oasis class. In fact, we've said that we're not currently thinking of adding to Oasis class.
The CleanSea Shipboard Wastewater Treatment System that can be found onboard Royal Caribbean's Oasis of the Seas and the soon to ship out, Allure of the Seas, has received certification from Det Norske Veritas (DNV).
This certification follows successful testing of the CleanSea system to verify that the effluent produced by the system meets MEPC 159(55) regulations. These regulations stipulate that the effluent has met or exceeded certain characteristics, verified over a 10 day period. The Headworks Bio CleanSea system produces excellent quality effluent with all parameters under the maximums by 30-90%.
These water systems handle all of the all black water, hotel grey water, laundry grey water, galley grey water, and decanted bioresidue wastewater produced during operation. The system, which is 100% redundant, is rated to handle 3,000 m³/day (790,000 GPD).
Jamil Murni, from Houston, Texas has been sentenced to four years in jail for defrauding Royal Caribbean. Murnii was a fuel buyer for Royal Caribbean who concocted a scheme to defraud the cruise line of more than $600,000, according to a news release from the U.S. attorney for the Southern District of Florida.
Murni created a fake fuel purchasing company called "Sea Fuels Trading" and applied to have it become a fuel provider for Royal Caribbean. He then used his position with the cruise line to secure contracts with his company. He then purchased fuel from competitors and sold it back to Royal Caribbean for a higher price.
As part of his punishment, Murni will have to pay back $610,228 in restitution to Royal Caribbean.
Royal Caribbean's Legend of the Seas is going to call the port of Incheon, South Korea not just a port of call but their home port very soon. Incheon port authority officials are hoping to welcome even more cruise ships by expanding facilities and adding more immigration booths.
Thus far 15 cruise ships have made a call to Incheon this year and with more passengers from Europe and North America traveling to South Korea for tours, Incheon officials hope to develop more local tours to encourage tourists to stay in the area.
A ship like Legend of the Seas generates a lot of revenue for the city, as each time she pulls into port, approximately W1 billion (US$1=W1,114) in financial effect hits the city.
Two Royal Caribbean passengers were arrested last week by U.S. Customs and Border Protection officers for allegedly smuggling heroin in a bag of shoes.
When Serenade of the Seas arrived in San Juan, Puerto Rico, custom officers seized 3.5 kilograms of cocaine and 6.48 kilograms of heroin in two unrelated incidents. Officials nabbed Diana Hortencia Latigua-Lorenzo, 32, a U.S. citizen, and her brother, Breidy Latigua-Lorenzo, 20, a citizen of the Dominican Republic.
The estimated street value of the heroin is $324,000 and the estimated value of the seized cocaine is $84,000.
Allure of the Seas is primed to make her maiden voyage later this month and the Wärtsilä engines that are installed in Allure of the Seas, are what power Royal Caribbean's newest ship. In addition, the Wärtsilä engines have common-rail systems, which provide lower fuel consumption and reduced emissions, giving smokeless operation at various engine loads.
The brand new largest cruise ship in the world sports six Wärtsilä 46 engines, including three 12-cylinder and three 16-cylinder Wärtsilä 46 engines in V-configuration, and Wärtsilä 7500-horsepower bow thrusters with a combined power output of some 20 MW that make the vessel easy to maneuver.
Royal Caribbean and Wärtsilä have a history of cooperation going back 40 years and the last ship in Royal Caribbean's line to feature the enginers is Allure of the Seas' sister ship, Oasis of the Seas.
Royal Caribbean took delivery of its newest ship, Allure of the Seas, sister ship to the much touted Oasis of the Seas from the STX Europe shipyard in Turku, Finland.
After nearly two years of construction, STX handed over Allure of the Seas to Royal Caribbean, who will now begin the process of readying Allure of the Seas for her inaugural cruise later this year. Allure is scheduled to arrive in Fort Lauderdale on November 11. It's maiden voyage is set for Dec. 1.
Among new offerings on Allure is the first Starbucks at sea, the first GUESS store at sea, a Brazilian churrascaria restaurant, a Mexican cantina and a hot dog stand. The ship also will be the first to feature DreamWorks Animation characters such as Shrek, part of a new partnership between DreamWorks and Royal Caribbean.
A public meeting was held last week that featured the members of the Placencia Village Council, Placencia Tour Guide Association and the Placencia chapter of the Belize Tourism Industry Association. The meeting was geared to having these locals express their concerns to Royal Caribbean represenatives and to the Belize government about a plan to build a new cruise terminal in Placencia.
Royal Caribbean has already purchased the land for the terminal, but opponents claim the proposal would damage the environment of the area, which is central to Placencia's appeal to begin with. Obviously the prospect of a cruise terminal in the town would increase the amount of tourists visiting the area, locals are more concerned with the environmental impact the cruise ships and tourists would have in the long run.
"Overnight tourists and foreign home owners are our current and future bread and butter that we have worked so hard for over the last 20 years," said local developer Boris Mannsfeld, who is building the Villas at CocoPlum. "They will be driven away if cruise ships arrive here."
Guests cruising aboard Royal Caribbean's new Allure of the Seas will have the opportunity to have their usual morning coffee as Starbucks will launch its first coffee shop at sea.
“We are always looking for unique ways and places to connect with our customers and deliver the Starbucks Experience,” said Chris Carr, senior vice president and general manager of Starbucks Licensed Stores. “Starbucks presence aboard Allure of the Seas is another place where our customers want and expect us to be.”
Starbucks will serve it's usual line of coffee drinks on the Royal Promenade from 7am to 11pm each day. The Seattle's Best Coffee will remain on the ship (Seattle's Best Coffee is a subsidary of Starbucks) and be served in the Adagio main dining room, conference rooms and the ship's signature specialty restaurants.
“We are passionate about delivering the WOW,” said Lisa Bauer, senior vice president of Hotel Operations, Royal Caribbean International. “Opening the first ever Starbucks at sea is another example of how Royal Caribbean is delivering distinctive beverage and dining options to our guests and exceeding their expectations. We are offering something that no other cruise brand can.”
Royal Caribbean third-quarter earnings rose an amazing 55% thanks to increased cruising demand and operating and fuel costs fell. Revenue rose to $2.06 billion from $1.76 billion a year before.
Third-quarter earnings were $356.8 million, or $1.64 per share, compared with earnings of $230.4 million, or $1.07 per share, a year earlier.
Royal Caribbean said it's near-term bookings were stronger than they had expected while revenue remained stable and continues to "be characterized as slowly improving,".
In addition to its third-quarter results, Royal Caribbean gave investors a prelimary look at 2011 earnings and expects to exceed Royal Caribbean's previous record of $3.26 a share.