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Author: Rebecca Gibson/Monday, November 19, 2018/Categories: Report, Cruise news, Royal Caribbean
This article was first published in the Autumn/Winter 2018 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.
What if we could build an ice rink on a cruise ship? What if we could blow glass at sea? What if we could take people to places they never thought they’d see?
These are all questions posed by Royal Caribbean Cruises Ltd. (RCL) as part of its mission to create ships that astound and experiences that amaze. RCL’s core value of “looking beyond the now, sensing and feeling and intuiting what could be” has been the same since the company was first founded by Edwin Stephan and brothers Arne and Gjert Wilhelmsen in 1969. Bringing their three major Norwegian shipping companies together, the men embarked on a mission to revolutionise the concept of cruising.
At the time, cruise companies typically only transported people across the Pacific or Atlantic oceans, or offered lengthy and expensive around-the-world or trans-ocean voyages on a large passenger liner. However, RCL wanted to do something different: it aimed to provide year-round cruises from Florida, US to the Caribbean.
Placing creative thinking, innovative engineering and high-quality guest service at the heart of its strategy, RCL started off small with just one ship and, over the next couple of decades, expanded by building what, at the time, were the world’s biggest cruise ships. RCL acquired luxury operator Celebrity Cruises and its three ships in 1997, before introducing a third brand, Azamara Club Cruises, in 2007 to pioneer the current trend for offering longer stays and overnights in exotic ports with its Destination Immersion concept on its two boutique ships.
Today, it also has joint venture interests with German brand TUI Cruises and Spanish line Pullmantur Cruceros. This August, RCL also expanded into the ultra-luxury and expedition cruises sectors for the first time this when it acquired a two-thirds stake in privately owned operator Silversea Cruises, which has four expedition ships, five classic cruise vessels and two newbuilds (Silver Moon and Silver Dawn) on track to enter service in 2020 and 2021. The acquisition will enable Silversea to drive long-term capacity growth in the luxury and expedition markets at a much larger scale than it would have been able to achieve independently. (Read more in our interview with Silversea’s chief executive Roberto Martinoli here).
“Silversea is a crown jewel and the acknowledged leader in luxury and expedition cruising, two key markets that are poised for growth,” said Richard Fain, chairman and CEO of RCL, in a press release. “Uniting our two companies presents an extraordinary opportunity to expand vacation options for guests and create revenue in strategic growth areas. We are proud to welcome aboard Manfredi Lefebvre, a visionary leader whose high standards and history of innovation we deeply respect.”
Now, the company that started by taking 724 Americans from Florida to the Caribbean has become a truly global company with 60 ships that operate multiple different itineraries to thousands of destinations worldwide. It even has its own private islands – Labadee and CocoCay – and dedicated cruise terminals at some of the world’s busiest cruise ports, such as PortMiami and Port Everglades in Florida.
Delivering the onboard ‘wow’
Travellers got a glimpse of what was to become RCL’s legendary propensity for taking the seemingly unthinkable and turning it into reality when it launched its first ship in November 1970. Not only was the 724-guest Song of Norway the world’s first year-round, warm-weather cruise ship, but she also introduced mid-ship sun decks, glass-walled dining rooms and the brand’s now signature Viking Crown Lounge. Projected out from the funnel, the lounge was inspired by the lounge in the revolving restaurant on top of Seattle’s Space Needle observation tower and has made Royal Caribbean International’s ships stand out in any port to this day.
However, it was the cruise industry’s first-ever rock-climbing wall, ice-skating rink and horizontal atrium on Royal Caribbean International’s Voyager of the Seas (1999 debut) that truly kick-started the trend for incorporating novel physical activities and attractions onboard cruise ships. Royal Caribbean International has become even more inventive with every subsequent ship class, successfully claiming cruise industry-firsts on almost every vessel.
Notable examples include onboard FlowRider surfing simulators; an open-air Central Park neighbourhood with a carousel; Aqua Theaters for diving shows; robotic bartenders; RipCord by iFly skydiving simulators; Two70° entertainment space with robo-screens; the North Star observation pod that extends 300 feet above the ocean; the Sky Pad virtual reality bungee jumping experience; and SeaPlex, which can be used for sports, bumper cars, roller skating, circus school and more. Christened this April, the line’s newest ship and fourth in the Oasis class – Symphony of the Seas – is first to boast Royal Caribbean’s first glow-in-the-dark laser tag team game, a custom-made submarine-themed escape room, and a two-level Ultimate Family Suite, which has an in-room slide, a private cinema, a floor-to-ceiling LEGO wall and a 212-square-foot balcony complete with table tennis and a full-size whirlpool.
“Symphony of the Seas is the latest example of how our people work to push the envelope of innovation with each new ship,” said Fain in a press release. “The Oasis Class has been a trend-setting design, but the team has evolved the design to build on that success to provide even more incredible family adventures.”
Delivering the onboard ‘wow’ factor has also been at the top of the agenda for RCL’s others brands. TUI Cruises’ newest ship Mein Schiff 1, which was officially inaugurated in May 2018, boasts the first humanoid robot DJ, an interactive media installation with sensors that respond to guests’ movements and interactive benches for chef-led cooking sessions in the Manufaktur – Kreativ Küche restaurant.
Meanwhile, Celebrity Cruises is set to transform both its brand and the cruise industry after debuting the first of a series of new Edge-class vessels in November 2018 – the first newbuild it has designed in a decade. Celebrity Edge, which is the first vessel to be fully planned and designed using 3D virtual reality technology at RCL’s new Innovation Lab, features game-changing innovations, such as a virtual chef experience; infinite verandas that increase the square footage of staterooms by 27%; and the three-deck Eden cuisine and entertainment concept, which has an 18-foot-high live Library of Plants to provide fresh cocktail ingredients and will break records for the largest expanse of outward-facing glass at sea. There is also a cantilevered Magic Carpet platform, which will move up and down one side of the ship to add outdoor spaces to various decks at different times of the day or night.
TUI, Celebrity, Royal Caribbean International and Silversea will continue to push the boundaries as they design the new ships that are scheduled to launch over the next few years. Buoyed by guest and industry excitement about the new venues and attractions that will debut on their newest ships, the latter three are also embarking on ‘continuous improvement’ projects. Royal Caribbean International has dedicated US$900 million to modernising 10 ships with digital innovations, specialised pool spaces and experiential dining over the next four years as part of the new ‘Royal Amplified’ initiative. Celebrity has enlisted more than 500 designers, architects and engineers to work on the US$500 million revitalisation project for its Millennium- and Solstice-class vessels between 2019 and 2023. And the multi-year Project Invictus initiative will see Silversea upgrading ships and products from 2018 onwards.
“We’ve made multiple changes to our ship designs that differentiate us from other companies and set the new standard for what guests expect,” Fain told ICFR. “Our innovative spirit has been a good driver for ensuring that we will remain competitive long into the future.”
Saving the waves
Testament to its innovative spirit, RCL and its brands have always been several steps ahead of other cruise lines when it comes to operating its ships in the most environmentally sustainable way possible. Since establishing its ‘Save the Waves’ campaign in 1992, RCL has partnered with multiple environmental organisations (such as the World Wildlife Fund in 2016) and adopted various industry-first solutions and technologies in an effort to become a low-carbon, zero-waste organisation. Each new ship class emits around 20% less carbon dioxide per person per day than vessels built a few years ago.
RCL was one of the first companies in the industry to install smokeless gas turbines, advanced wastewater purification systems (now retrofitted on 33 existing ships and automatically built into all new vessels) and gas exhaust cleaning systems on its ships. When Royal Caribbean International’s Quantum of the Seas launched in 2014, RCL also debuted a ground-breaking air lubrication system that coats the hulls of ships with millions of microscopic air bubbles to minimise drag and resistance in the water. This innovation has been included on all newbuilds since 2016.
Although RCL has already cut greenhouse gas emissions by nearly 25% in 10 years, it is now aiming to achieve 35% less energy per person per night to move people around the ocean by 2020 than in 2005. As part of this, its teams are now deploying industry-first software to plan ship speeds and routes to maximise fuel efficiency and completing a major cross-brand programme to retrofit exhaust gas cleaning systems on existing vessels. It is also equipping vessels with advanced wastewater purification systems and advanced emission purification systems.
“RCL’s ‘continuous improvement’ mantra is particularly strong when it comes to environmental conservation and sustainable business practices,” Fain explained when he last spoke to ICFR.
RCL always strives to find a safer, cleaner and more energy-efficient way to power its cruise ships. TUI, for example, has become one of the few cruise operators to have opted to build LNG-fuelled ships to meet environmental goals. Ordered this July and set for delivery in 2024 and 2026, the two 161,000gt vessels will be built by Fincantieri and bring TUI Cruises’ Mein Schiff fleet up to nine ships.
However, Royal Caribbean International has gone a step further. Impressed by the zero-emission possibilities of emerging fuel cell technology, the company set its sights on pioneering a way to manufacture this type of system at a small enough size for use on ships. In 2016, Royal Caribbean International found a solution and ordered the world’s first-ever cruise ships with engines that run on a pure hydrogen fuel cell engine from Ballard Power Systems and control, converter and transformer technology from ABB Marine. The fuel cell system, which use an electrochemical reaction to convert LNG fuel directly into electricity and heat, will initially be trialled on existing ships, where it will be tested on its ability to deliver energy for hotel services while the ship is in port. Royal Caribbean International hopes that fuel cells can be used for propulsion on the two 5,000-guest Icon vessels when they debut in 2022 and 2024.
“With the Icon class, we move further in the journey to take the smoke out of our smokestacks,” said Fain in a previous ICFR keynote. “We are dedicated to innovation, continuous improvement, and environmental responsibility, and Icon gives us the opportunity to deliver against all three of these pillars.”
RCL is also one of several major cruise operators leading the way in reducing unnecessary plastic waste across its ships. From January 2019, single-use plastic straws and coffee stirrers will be replaced by paper and Forest Stewardship Council-certified wood alternatives across all its brands. The company has also kicked off an extensive cross-brand audit to find ways to reduce and eliminate other disposable plastics – such as condiment packets, cups and bags – by 2020.
“Healthy oceans are vital to the success of our company,” said Fain when the ban was announced this July. “For over 25 years, our Save the Waves programme has guided us to reduce, reuse and recycle everything we can. Eliminating single-use plastics is another step in that programme.”
The company has also been lauded for its commitment to corporate citizenship, leadership and innovation, and operating ethically, sustainably and diversely – Ethisphere Institute has named it one of the World’s Most Ethical Companies in the leisure and recreation industry for three consecutive years, starting in 2015.
“At RCL, ethical leadership is an important part of our worldview,” said Fain when the company received the award. “We value this honour and will continue to hold ourselves to the highest ethical standards in following our mantra of continuous improvement.”
Creating a new world on the water
Driven by an insatiable thirst for staying ahead of the curve in both onboard experience and environmental sustainability, RCL is in the process of unleashing a wave of cross-brand digital innovations that will transform every aspect of the cruise experience for both guests and crew. Unveiled in November 2017, the new Sea Beyond (known as Excalibur in-house) initiative will involve RCL implementing facial recognition technology, radio frequency identification tagging, GPS mapping and Bluetooth-enabled beacons to automatically check-in guests as they board.
Guests will also have access to an app for booking cruises, signing up to shore excursions, making dinner reservations, ordering drinks, exploring the ship using x-ray vision and interactive maps, and unlocking their staterooms (alongside the next generation of RCL’s WOW Bands. The app is already being piloted on Royal Caribbean International’s Allure of the Seas and Oasis of the Seas and will be refined with new ship-specific features as it is rolled out to all ships in the RCL’s three own brands in 2019.
Letting its imagination go wild, RCL has also created concept virtual and augmented reality experiences that would enable guests to transform onboard spaces into interactive gaming areas. Plus, it’s exploring the possibilities of guests being able to touch a button to replace their stateroom ceiling with a starry sky or a rainforest canopy, or wear a headset to virtually travel to new landscapes when tasting different foods in onboard restaurants.
“Every year, millions of guests are entrusting us with something very precious: their vacation time,” said Fain when Sea Beyond was unveiled to the public. “To merit that trust, we work to surpass guests’ expectations at every opportunity, from planning their trips to boarding our ships, whether on sea days or shore excursions, and in every dining, recreation and entertainment venue. Sea Beyond is a preview of how we are bringing those aspirations to life in a stem-to-stern transformation of our entire company while creating a new world on the water.”
Crew will also benefit from Sea Beyond. They will be able to use a mobile app to check guests in, track the delivery of bags to staterooms, locate passengers during emergencies and anticipate their personal needs throughout the cruise. Plus, crew will have better tools to manage their own schedules and stay connected to friends and family onshore.
“We regularly earn industry-leading guest satisfaction ratings – which is first and foremost a tribute to the outstanding work our crews do every day,” said Fain. “To continue to improve, we will put more capability to delight and surprise our guests into our crews’ hands even as we help them better manage the special challenges of being away from their homes and families while onboard.”
Other digital innovations from the Sea Beyond programme will help to make RCL’s ships smarter and safer, while further reducing their environmental impact. Forthcoming command centres, for example, will use augmented reality to assist with navigation and manoeuvring, while new bridge technology will improve how crew on the bridge communicate with those in the engine room.
“The pace of change is relentless – and so are we,” said Fain. “We are harnessing a range of technologies to enhance every facet of our business, every minute of our guests’ vacations, and every inch of the ships we build.”
From strength to strength
Certainly, RCL’s financial success shows its constant pursuit of innovation and guest satisfaction is driving results. This August, RCL surpassed Wall Street expectations when it posted second quarter earnings of US$2.27 per share, up from US$1.71 a year ago. Growth was driven by better than expected revenue from the global brands, better performance from joint ventures and lower than expected expenses. Revenues rose to more than US$2.3 billion from just under US$2.2 billion.
“While we are frustrated by foreign exchange and fuel rates, we are tickled pink that our business continues to excel and overcome these headwinds,” said Fain in a press release. “It is a pleasure to prove, once again, how strong our brands are and to demonstrate continued upside to our yields while maintaining strong expense control.”
A pioneering future
Fifty years ago, RCL embarked on a mission to create innovative ships that astound and surprise, and onboard and onshore experiences that amaze and delight every guest. Although there have been challenges along the way, by following that mission, RCL has made an indelible mark and become one of the world’s largest cruise companies and one of the world’s biggest pioneers.
The secret behind this success? Perhaps it’s that RCL has an expansive fleet and constantly builds some of the world’s biggest ships? Perhaps it’s that RCL is committed to analysing hospitality, technology and travel trends and working with the best minds in the business to develop the innovations that bring these to life on its ships and shore excursions. Or perhaps, as Fain intimated in his winter 2017 keynote in ICFR, it’s simply that RCL’s brands offer the types of immersive, culturally authentic and enriching experiences that today’s travellers are now looking for.
More likely, it’s that Fain and everyone working for RCL and its cruise brands have always kept sight of the corporation’s core founding values and practiced its ‘continuous improvement’ mantra to become the ‘best cruise line in the world’. Guided by a motivated leader who is frequently heard saying he has “the best job in the world”, RCL’s employees have retained a visceral dedication to placing the individual needs and expectations of every guest at the heart of everything they do. This has enabled RCL to cultivate a pioneering spirit that ensures it delivers truly unique and unforgettable vacation experiences that go beyond guests’ wildest imaginations.
“I’m constantly in awe of RCL’s men and women who work so hard and with such passion to produce the best vacations on earth,” said Fain when he spoke to ICFR in winter 2017. “Their skills, determination and spirit inspire me every day.”
Whatever the secret, it’s clear to both Fain and the wider industry that RCL and its cruise brands are only going to go from strength to strength if they continue to ask “what if?” and expand on the vision of innovation set out 50 years ago.
“Being totally committed to both innovation and continuous improvement means that you’re always running in a race that has no finish line,” said Fain in a previous ICFR keynote. “I wake up eager every day to see what challenge comes next.”
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