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1
Global Cruise Industry
“Strategy for success in the Asian cruise market”
Michael Bayley, Senior Vice President, International
Royal Caribbean Cruises Ltd.
2
Global Industry Growth
Source: G.P. Wild (international Ltd) from PSA, CLIA, ECC and other sources
-
5
10
15
20
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Year
Gue
sts
(Mill
ion'
s)
7.0%CAGR
2
3
Global Cruise Industry
Source: RCL 2008 North American fleet model. 2009 estimated
0 2 4 6 8 10 12 14 16 18 20
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Cruise Passengers (M)
• Small but growing segment of vacation market 18 Million passengers
375,000 berths
240 ships
• All regions remain under-penetrated
• Measured growth in North America
• Accelerating growth in rest of the world
North America Rest of World
3
4
Historical growth focus on N. America
-
2
4
6
8
10
12
1997 2002 2003 2004 2005 2006 2007 2008 2009
Year
Gue
sts'
Mill
ions
Europe
North America
Asia & Australia
Source: Mintell from G.P. Wild (international Ltd) from PSA, CLIA, ECC and other sources: Europe Includes EU 27, Russia and Eastern European Countries
Latin America/other
5
Relative Market Size
North America
330 Million Residents 10 Million Cruisers
3% Penetration
Europe
500 Million Residents 5 Million Cruisers
1% Penetration
Latin America
570 Million Residents 1 Million Cruisers
0% Penetration
Asia
3,000 Million Residents 1 Million Cruisers
0% Penetration
6
Cruise Industry Target Market
• Broad appeal across nation, age and wealth levels
• Offer multiple products to appeal to majority of consumers
• Ability to move assets around markets
• More a question of market prioritization by brand
• Profitability and growth opportunities are key
7
Array of Brands in the Marketplace
8
Europe - 2007
• €12.9 billion in annual direct spending
• €29.0 billion in annual total output
• 282,125 jobs
• €9.1 billion in annual employee compensation
Source: North American data - BREA, 2008 report commissioned by CLIA. European data – 2007 report by G.P. Wild * BREA commissioned by ECC
North America - 2008
• $19.1 billion in annual direct spending
• $40.2 billion in annual total output
• 357,710 jobs
• $16.2 billion in annual employee compensation
Economic Benefits of Cruising
9
In everything we do, Royal Caribbean Cruises Ltd. is ever conscious ofa very special, and very certain, responsibility. Simply put, we must protect
the marine environment and sustain the well-being of the people andplaces we serve.
Because we know that clean oceans are good for the environment,good for our guests and good for our business, we strive to achieve the
highest possible standards of environmental and community stewardship.
By following strict company policies and practices and using innovativetechnologies, we conduct our business Above and Beyond Compliance(what we call “ABC”) with existing laws and regulations. Our beautiful
oceans and their rich marine life demand nothing less.
Source: Extract from Royal Caribbean Cruises Ltd. 2008 Stewardship report http://www.royalcaribbean.com/envSitelet.do
Environmental Stewardship
10
• Save the Waves
• Appliances
• Hull Coating
• Window Tinting
• Advanced Wastewater Purification
• Propulsion & Hull Design
• Hull Design
• Fresh Water Consumption
• Heating, Ventilation & A/C
• Operational Conservation Measures
Environmental Stewardship
11
2004 International Deployment
Europe (summer)
SplendourBrillianceJewelGalaxyMillenniumConstellation
South America
Infinity
12
2010 International DeploymentEurope
SplendourVisionBrillianceJewelVoyagerAdventureNavigatorIndependence (YR)CenturyConstellationEquinoxEclipseJourneyQuestEmpressPacific DreamSovereignZenithBleu De France
South America
InfinitySplendourVision
International Caribbean
Enchantment /GrandeurOcean Dream (YR)Pacific Dream
Dubai
Brilliance
Australia & NZ
Rhapsody
Asia
Legend (YR)Quest
Egypt
Bleu De France
13
• People love to cruise
• Growing global appeal
• Represents excellent value for money
• Compelling newbuilds
• Global growth
13
Strong Consumer Affinity
14
Asian Cruise Market Growth
Key Fundamentals for Success
• Market
• Product
• Distribution
• Infrastructure
15
North America
330 Million Residents 10 Million Cruisers
3% Penetration
Europe
500 Million Residents 5 Million Cruisers
1% Penetration
Latin America
570 Million Residents 1 Million Cruisers
0% Penetration
Asia
3,000 Million Residents 1 Million Cruisers
0% Penetration
Market
16
Asian Cruise Market Growth
Key Fundamentals for Success
• Market
• Product
• Distribution
• Infrastructure
17
Legend of the Seas - SingaporeProduct
18
Legend of the Seas – Singapore and Kaohsiung (Taiwan)
Product
19
Legend of the Seas – Hong KongProduct
20
Legend of the Seas – ShanghaiProduct
21
Legend of the Seas – ShanghaiProduct
22
Legend of the Seas – Beijing (Tianjin)Product
23
Legend of the Seas – Tokyo (Yokohoma)
Product
24
Asian Cruise Market Growth
Key Fundamentals for Success
• Market
• Product
• Distribution
• Infrastructure
25
Asian Distribution Network
26
Asian Cruise Market Growth
Key Fundamentals for Success
• Market
• Product
• Distribution
• Infrastructure
27
Infrastructure
• Partnership with public and private institutions
• Comparable international cruising regulations
• Competitive port charges and fees
• Safe, clean and hospitable port cities
• Ports to accommodate ships of today and tomorrow
28
1970
1980
1990
2003
2006
2009
Evolution of the Industry