Around the Industry: New Directions

Royal Caribbean Cruise Line is setting a new course with a series of new ship deployments.

Three- and Four-Day Market

RCCL is boosting its three- and four-day market capacity more than 70 percent - from 324,000 to 560,000 - within the next 12 to 15 months.

In December 1996, the 1,600-passenger Nordic Empress will start three- and four-day cruises from San Juan sailing Fridays and Mondays, respectively. Ports of call will be St. Thomas and St. Maarten on the three­ day sailings and St. Croix, St. Maarten and St. Thomas on the four-day program. (Assuming St. Maarten has returned to normal conditions. See Hurricane story.)

"There is definitely a market for short Caribbean vacations," noted Rod McLeod, Executive Vice President of Marketing, Sales and Passenger Services for RCCL, adding that the average length of a Caribbean island vacation is three-and-a-half to four days.

For those who want to stay longer, RCCL will also offer pre- and post-cruise land packages.

Also in December of 1996, the 2,350-passenger Sovereign of the Seas will take over the Nordic Empress' program from Miami. In June of 1997, the Nordic Empress will be redeployed for three months to Port Canaveral tapping into the Central Florida summer market. Cruises will call at Nassau and CocoCay.

In addition, RCCL will continue to operate the 1,500-passenger Viking Serenade on short cruises from Los Angeles.

While RCCL is pioneering short cruises out of San Juan, McLeod admitted there is a risk factor. "We do not have a local market adjacent to the embarkation point and need to fly passengers in," he said, noting that the air cost on a per diem basis is double that of a seven-day cruise.

"When you look at it, if you come from New York, San Juan is only half an hour longer flight time than Miami. Plus we compensate with the uniqueness of the product," McLeod added.

McLeod also counts on incentive business and said the program is "fresh" for the incentive market.

RCCL has announced prices out of San Juan starting at $699 including air for three days and $899 including air for four days. Rates are per person, based on double occupancy. Port charges are additional.

RCCL has not announced prices for its Port Canaveral-Bahamas cruises yet.


According to McLeod, the move reflects RCCL's adjustment to changing vacation patterns in the United States as well as to the industry's need to generate more first time passengers (who will later convert to longer cruises).

By 1997, RCCL will have an estimated annual passenger capacity of 1.4 million, including 560,000 passengers in the short cruise market, or 40 percent of total capacity.

This year, RCCL's short cruise capacity is about 34 percent of the line's overall passenger capacity. In comparison, Carnival Corporation will have approximately 35 percent of its total passenger capacity in the three- and four-day market.

Two Plus Two

RCCL has also announced that the new 1,950- passenger Grandeur of the Seas will begin service in December of 1996, sailing seven-day Caribbean cruises from Miami.

This new ship will call at only two "commercial ports" - San Juan and St. Thomas - and at two out­ islands - RCCL's Labadee and CocoCay.

In addition, the ship will spend two days at sea. According to RCCL, due the ship's high speed, the Grandeur of the Seas provides six more hours in port than the line offers currently.

The itinerary would seem to encourage more spending aboard the ship with two days at sea and two days at the company's private out-islands.

In addition, for the Nordic Empress, short cruise per diems are comparable to longer cruises, but passengers spend considerably more on board.

Hence, the overall strategy signals efforts to create a more profit-oriented RCCL.


This past month, RCCL also announced that the new 1,804-passenger Splendour of the Seas will be homeported out of San Juan for a winter season of seven-day cruises starting November 30, 1996.

The Splendour of the Seas will debut next March with a summer season in Europe before joining RCCL's Monarch of the Seas and Nordic Empress in San Juan.

The Song of America, which is now sailing from San Juan, will be redeployed for seven-day cruises from Los Angeles. She will be replacing the Song of Norway, which will sail 10- and 11 -day cruises alternating between Miami and San Juan in the winter of 1996/97.

RCCL has not yet announced a replacement for the Song of America on the Bermuda program for 1997.

Also, on December 17, the 714-passenger Sun Viking starts on her year-round Far East program. McLeod said that the Sun Viking is doing "very well" and that RCCL is committed to the Far East.

While RCCL is pioneering new markets, it will also slightly be reducing its seven-day capacity out of Southern Florida in 1997 compared to 1995 which McLeod said was incidental with the ship movements. RCCL will also be increasing its seven-day capacity moderately out of Los Angeles and significantly out of San Juan.

While RCCL will be increasing its Panama Canal capacity, that is mainly due to repositioning cruises, according to McLeod, who conftrmed that RCCL will largely maintain present capacity in Alaska and Europe.

Reflecting on the recent deployment announcements, McLeod said: "Look at what we have been able to do with just three of the Vision ships." (Three more ships are slated to be introduced through 1998.)

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