Richard Fain

Royal Caribbean's Chairman Richard Fain has personally looked around the new International Cruise Terminal in Singapore and likes what he sees.

Fain has been told that the new terminal will be ready for the arrival of Royal Caribbean's Voyager of the Seas when she arrives on May 26 for her debut in Asia.  Previously the Singapore Tourism Board had only indicated that the new terminal would be ready in the second quarter of 2012.

"Because the ship is coming in late May, I was assured the terminal would be ready for the voyage of the ship," Fain said. "It's also very efficient. That's important in the cruise industry. It's gratifying to see how well-thought through the logistics are: How passengers come in, how luggage is handled, the supplies to the ship. There are commodious areas to handle all the activities that need to be attended to. They are all well-thought out in a progressive way."

Voyager of the Seas' first cruise from Dubai to Singapore is already sold out, which has exceeded expecations according to Fain.

Royal Caribbean's two largest shareholders, A Wilhelmsen AS and Cruise Associates, have informed Royal Caribbean that they have terminated the Shareholders’ Agreement between themselves.  The deal between the two shareholders meant they agreed to vote their shares for the election as directors of four nominees of each shareholder. With the termination of the Shareholders’ Agreemnt, the two shareholders are no longer obliged to vote their shares in this manner.

Royal Caribbean is not included in the agreement but did issue a statement that the decision has nothing to do with Royal Caribbean as a company.  Richard Fain, Royal Caribbean's Chairman had this to say,  "This action is solely between the two shareholders and does not involve the Company.  We do not expect today’s announcement to result in any change in the Company’s operations or strategic direction."

Per Royal Caribbean's Articles of Incorporation stipulate that when the Shareholders’ Agreement was in place, the approval of at least one director affiliated with each of the two shareholders was required for certain corporate actions. Now that the agreement is terminated, this is no longer a requirement. In addition, Royal Caribbean noted that these changes are consistent with current trends in best practice for good corporate governance.

North America has been the perennial leader in cruising for so many years now but Royal Caribbean's Chairman Richard Fain thinks that will change.  During the launch of Celebrity Cruise's newest ship (Royal Caribbean owns Celebrity Cruises), Fain made this profound prediction, "Next year, the rest of the world will book more cruises than North America".

Given how Royal Caribbean has distributed its fleet in recent years, it's really no surprise.  Half of Royal Caribbean's fleet is based in Europe.  In addition, Royal Caribbean is adding capacity  in Asia and Australia and they're also opening sales offices in the countries from which its ships will cruise.

With high airfares, many North Americans chose not to cruise in Europe this year, and many believe the strength in the Alaska market is a result of that reluctance.

Royal Caribbean held its conference call today to announce the company's second quarter financial results, Royal Caribbean chairman Richard Fain characterized an accounting error from the previous quarter as being "embarrassed".

Nonetheless, Fain was excited about the company's short term future and was overall positive about the direction Royal Caribbean is going in, "It still looks like this will be one of the best years in our history".

As a result of the error, Royal Caribbean lowered its full-year earnings per share prediction by 30 cents at the midpoint to a range of $2.90 to $3.20, mostly in order to reflect a revision to how it accounts for interest expense.

Despite Fain's and other executives attempts to diffuse the accounting error situation, Royal Caribbean's stock took a hit following the call, with the price dipping as low as 11% from its market open price.

The interest-expense accounting error related to the amortization of certain financing fees, and caused the revision of some prior results and lower guidance for the rest of the year. The revision is a noncash item, and Fain said the team that made the error also found it and quickly reported it.

During the call, Brian Rice, Chief Financial Officer for Royal Caribbean, called the mistake a human error and like Fain, was embarrassed by the situation.

Royal Caribbean Chairman Richard Fain spoke with CruiseMates about the company's decision to move more of its ships to Australia and the reasons for the change.  

In 2012, 2 Royal Caribbean ships (Rhapsody of the Seas, Radiance of the Seas) and 2 Celebrity ships will call upon Australia for a number of cruises.

Asked about the potential for over-saturing the Australian cruise market, Fain seemed confident that Royal Caribbean could easily adjust, "Keep in mind the flexibility of our product. If something does not work out we can always change our plans and put our ships somewhere else."

Asked if Royal Caribbean considers what other competitors are doing or if the decision to move ships to an area is based purely on Royal Caribbean, Fain responded, "We really just look at our own brand."

Royal Caribbean's Radiance of the Seas is almost ready after undergoing a "revitalization" before she is deployed to Australia later this year.  In the meantime, Royal Caribbean has released a number of quick video updates that detail the changes that she has undergone.

Summary of revitalisation – interviews with Richard Fain, Adam Goldstein and Lisa Bauer
Radiance of the Seas will be the next Royal Caribbean International ship to receive the Royal Advantage this June 2011. On Radiance, there will be more to taste, savor & share as an array of dining options arrive onboard. Other enhancements include a nursery, Diamond Lounge and outdoor movie screen.

The new Samba Grill
Royal Caribbean International's Radiance of the Seas cruise ship continues with her 22-day dry dock. Watch the installation of Radiance's new restaurant, Samba Grill - a sumptuous steakhouse experience with personality and flare.

Quill & Compass Pub
This video shows the Quill & Compass Pub start to come to life on Radiance of the Seas. Radiance is the first ship in Royal Caribbean International Radiance Class to receive this pub:

The Float Out
In this video, Radiance of the Seas is tested on the water for the first time since her dry dock:

New Staterooms
There are 15 additional staterooms are being added to the Radiance of the Seas during her dry dock in Victoria, British Columbia, Canada. Watch this video for more information about the family suite to single guest staterooms that are being added:

Hull work from bow to stern
Radiance of the Seas is still moving forward with her dry dock process, watch this video to see Marine Operations do their work from the bow to the stern of the ship:

Azipods
The azipods on Radiance of the Seas are being upgraded to improve fuel efficiency. Watch this Royal Caribbean video to learn more on the process with Radiance's Captain Claus Andersen:

Safety drill
This video highlights the crew performing a safety drill while Radiance of the Seas is in dry dock:

New Royal Babies and  Tots Nursery
Radiance of the Seas is the 5th ship to introduce the Royal Babies & Tots Nursery to the Royal Caribbean International fleet. Watch this clip to see what once was an arcade come to life as a nursery.

Outdoor Poolside Cinema
Watch as workers install an outdoor, poolside movie screen on Radiance of the Seas during her 22-day dry dock. Guests will be able to enjoy watching major sporting events, concerts and family-oriented movies.

Izumi Specialty Restaurant
Watch the installation of Radiance's new restaurant, Izumi - a first to the Radiance Class. Guests can choose from popular sushi rolls, sashimi, our Hot Rock (Ishiyaki) Plates, sukiyaki and more.

Rita’s Cantina
Watch the installation of Rita's Cantina on Radiance of the Seas during her 22 day dry dock. This lively and casual restaurant features tasty traditional Mexican fare and a comprehensive selection of margaritas. Caters to families by day, and adults by night.

Final Dry Dock preparations
Radiance of the Seas 22 day dry dock is almost complete. Watch this video to see Captain Claus Andersen give a tour of all the final preparations before guests arrive for their cruise vacation on the revitalized Radiance of the Seas.

Royal Caribbean's Chairman and Chief Executive Richard Fain received a 59% increase in his salary in 2010, which brought his annual paycheck to $8.6 million.

The reason for the increase in pay was mostly due to a cash incentive payment of nearly $4.1 million, about $2.9 million more than the previous year's amount.

Fain's base salary remained the same for the third straight year at $1 million and the cruise line's financial results were better in 2010 than in 2009.

In a proxy filing with the Securities and Exchange Commission, Royal Caribbean stated, "Executives were rewarded for their contributions to this positive performance through payment of performance based annual bonuses above target levels".

The other four executives for Royal Caribbean saw their 2010 bottom lines rise as well from 18.5% to 48.9% thanks to increases in cash incentives.  Royal Caribbean Cruise Line's CEO Adam Goldstein saw the biggest increase, who received $4 million and was second to Fain in total compensation for the year.

Royal Caribbean chairman Richard Fain sat down with Smart Money for a question and answer session to talk about the state of Royal Caribbean today.  Here are a few of the questions of particular interest.

SmartMoney: Historically, cruises have been cheaper than vacations on land. Has the gap narrowed?

A cruise is still a better value. It frustrates me that [so many people] haven't cruised. Eighty percent of Americans haven't taken a cruise!

SmartMoney: Asia has the growth everyone wants. You have done little there.

We are getting to that point. The Chinese government in particular has made a decision that cruise tours are good for the country. They have started making investments in port facilities. [Our participation] couldn't have come much earlier.

You can read the entire interview here

Royal Caribbean has signed a letter of intent with German shipyard Meyer Werft to build the cruise line its newest ship, a 4,100-passenger, 158,000-ton ship with an expected delivery of fall 2014.

The order is for one ship with the option of a second ship that would be delivered for Spring 2015.

"This next generation will not disappoint," said Richard Fain, chairman and CEO of Royal Caribbean's parent company Royal Caribbean' Cruises, Ltd., in a statement. "It will offer features for everyone," Fain said. "From grand, spectacular spaces to small intimate settings; from active, invigorating activities to the serenity of more personal space; and from a plethora of dining alternatives to a cornucopia of opportunities for families."

The new ship class is being called "Project Sunshine" until a formal name for the new class is decided upon.  

This new ship will be the first of a new class, although its size is very similar to the Freedom Class ships, which are slightly larger (158,000 tons for Project Sunshine vs 160,000 tons for Freedom).

In a conference call with investors, Royal Caribbean Chariman and CEO Richard Fain confirmed rumors that Royal Caribbean may be ready to look to building a new ship.

During the call, Fain thinks now may be the time to look at building a new ship, "We feel time may now be right for such a move."  In addition, a new ship would be a new class of ship, meaning it would not be another Oasis class ship or any other pre-existing Royal Caribbean ship class.

There's no timetable yet for placing an order, and Fain added in the short term, Royal Caribbean is focusing on current hardware revitalization, which means they will enhance current ships.  Fain called the program "Oasis-sizing", where they take features from Oasis and Allure of the Seas and roll them out to older ships.  This program was announced earlier this year and will add new features to older ships such as Radiance of the Seas, Splendour of the Seas, Liberty of the Seas and Freedom of the Seas.

UPDATE: (10:30am) Royal Caribbean Chariman and CEO Richard Fain added during a question and answer session that they will remain tight lipped about the new ship, but confirmed the ship will be a Royal Caribbean brand ship and based on the company's previous history of ordering ships for a new class, will likely start with one ship and then add more ships based on that class afterwards