On a rapid course for expansion
Richard Fain, chief executive of Royal Caribbean Cruises, rises from a chair in his office overlooking the Miami coast to explain how one of the company's ships will be “stretched” next spring.
He points to a computer model that illustrates this novel form of ship surgery. The 74,000-tonne Enchantment of the Seas will be cut in half and a new 73ft section inserted. The logistics are complex: the midsection will be floated from Finland and then wedged into place at a dry dock in Rotterdam using hydraulic jacks and 18-wheel lorries.
Why such an elaborate operation? It is simply the quickest way for Royal to increase capacity to meet a growing demand for cruises, says Mr Fain. “We can add a relatively small number of berths but at a profitable rate,” he explains. “This way we can maximise the existing hardware.”
The stretching initiative will add 151 rooms at a price of about $60m (￡31.3m), compared to the $800m or so that it would cost to build a similar ship. Royal plans to have Enchantment of the Seas back in service by July 2005, whereas new ships take years to build.
The dry-dock method reduces costs by about $7m an important saving given the declining US dollar and the fact that the majority of cruise liner construction takes place in Europe.
With the launch of nine ships since 1999, Royal has expanded its fleet by about one-third yet still cannot meet demand. The company did not expect high growth in passenger numbers just a few years ago. Indeed, it made a bid for P&O Princess, a UK rival, in November 2001 to strengthen its financial position following the terrorist attacks of September 11 2001.
“In the dark days after September 11, we thought, ‘How will things change?' We were more highly leveraged than our competitors, so if times were bad,we would be punished disproportionately,” says Mr Fain.
Royal's move caught the jealous eye of Carnival, the world's largest cruise company, which made a counterbid for P&O in December 2001. A fierce, drawn-out tussle followed, concluding with P&O's wedding to Carnival in April 2003 after a $8.2bn hostile takeover.
Mr Fain is calm and introspective when recalling the drama. “There was a lot of excitement in being involved with something like that,” he says. “Obviously, I was disappointed, but the deal was initially struck ata time when our bargaining power was not at its highest.”
Without a trace of irony, Mr Fain recounts his telephone call to Micky Arison, chief executive of Carnival, to offer congratulations the day after the rival's bid was accepted a magnanimous gesture on Mr Fain's part, considering he once described the battle for P&O as “rancorous”.
As it turns out, Royal overestimated the downturn. Like its competitors in the cruise industry, it rebounded surprisingly well from a “perfect storm” created by terrorism, the war in Iraq and the Asian outbreak of the Sars disease mainly because travellers more willingly took to the seas than the skies.
Cruise companies also expanded their operations to regional ports to accommodate a growing number of “drive-to” passengers those who preferred driving to their embarkation point rather than flying.
In 2003, the worldwide number of cruise passengers increased by 6.6 per cent to 9.83m, according to the International Council of Cruise Lines, an industry body. Total expenditure by passengers and companies' operational costs rose to $12.9bn last year, against $10.3bn in 2000. “After 9/11, we did better than we could have imagined,” said Mr Fain.
Royal may be benefitting from the sector-wide upturn, but it has also created some momentum of its own. With just two brands and 29 ships, Royal is much smaller than Carnival, which has 12 brands and 75 ships. But it has carved a niche for itself with some attention-grabbing marketing initiatives such as adding rock-climbing walls to all its ships and bringing Cirque du Soleil, the Canadian circus troupe, to its Celebrity cruise line. When Enchantment of the Seas is stretched next year, Royal plans to add bungee trampolines and suspension bridges.
Royal is also trying to change the perception that cruising is an activity reserved for retirement couples and the elderly. This year it launched Xpeditions branded cruises to Antarctica and the Galapagos Islands adventure destinations not normally associated with large operators.
It is also trying to appeal to families by offering childcare facilities and clubs for teenagers. The company has formed a partnership with Fisher-Price, the toymaker, to develop programmes for children and parents, noting a sharp increase in children under three cruising with their parents in the past few years.
Further, the cruise industry remained relatively unscathed even after a record four hurricanes this summer. Operators retained bookings and continued to run cruises by changing itineraries and moving their ships out of a storm's path.
Although the impact of the hurricanes dented Royal's earnings by 10 cents a share in the third quarter, net yield an important industry gauge rose by 12.8 per cent to pre-9/11 levels. This was due to increased capacity, ticket revenues and on-board spending by guests.
Advanced bookings and pricing are strong and the company expects fourth quarter net yields to rise by 4 to 5 per cent from previous forecasts of 1 to 3 per cent. As demand for berths outpaces supply, Royal has seen a 7 to 9 per cent increase in prices this year.
Still, Carnival remains solid in the number one position. Last year it generated $6.7bn in revenue, not including results from P&O Princess. Royal, by contrast, had sales of $3.8bn.
Analysts say that its heavy load of $5.8bn in debt, $955m of which is short-term, remains a drag on the company, though Royal has said it plans to refinance.
Soaring oil prices are also a concern for Royal, though it is about 45 per cent hedged for fuel costs for fourth quarter.Against this, cruise companies are enjoying the effects of the weak dollar, as more travellers are booking cruises in advance to lock in rates for spring and summer. The future may be difficult to predict, but for the time being Royal Caribbean appears to be on course for further growth.
豪华游轮加快航速
皇家加勒比海游轮(Royal Caribbean Cruises)的首席执行官理查德?费恩(Richard Fain)坐在他俯瞰迈阿密海岸的办公室里。他从椅子上站起身，解释公司的一艘轮船明年春天将怎样被“拉长”。
他指了指一个阐释这种新式轮船外科手术的电脑模型。7.4万吨的Enchantment of the Seas号将被切成两段，在中间插进一段长73英尺的新船体。物流非常复杂：中段船体将从芬兰漂浮过来，然后在鹿特丹的一个干船坞中，用液压千斤顶和18个轮子的载重卡车把它顶到位。
为何如此大费周章？因为公司要提升运能，以满足对海上旅行日益增长的需求，这就是最快的方法，费恩先生表示。“这样我们能增加的舱位少一些，但价格很划算。”他解释道，“这种方法可以让我们在最大程度上利用现有的设备。”
这一拉伸船体的创新举措将在船上增加151个房间，花费约6000万美元，相比之下，造一艘小一点的船要花8亿美元左右。皇家加勒比海计划到2005年7月让Enchantment of the Seas号重新运营，而如果是新船，要花几年时间才能造好。
干船坞法将使成本降低约700万美元。鉴于美元在下跌，且大多数游轮的建造工作在欧洲进行，因此这是一笔重大的节约。
自1999年9艘船下水以来，皇家加勒比海已将其船队扩大了约三分之一，但依然无法满足需求。就在几年前，公司还没预料到乘客人数会大幅增长。事实上，就在2001年“9.11”恐怖袭击后，公司向英国竞争对手P&O Princess发出收购要约，以增强自身财务状况。
“在‘9.11’后的那段黑暗时期，我们在想‘情况会如何变化呢？’我们在经营中的举债水平比竞争对手高，所以要是市况不好，我们受到的伤害会大得多，”费恩先生表示。
皇家加勒比海的举动招致了嘉年华公司(Carnival)的忌妒。嘉年华是全球最大的游轮公司，它在2001年12月向P&O发出竞争性收购要约。随后就是一场激烈而旷日持久的争斗。嘉年华于2003年4月以82亿美元恶意收购P&O，争斗以两公司联姻告终。
在回忆那一幕时，费恩先生语气平静且自我反省。“参与那样的事情十分刺激，”他说，“我自然感到很失望。但最初达成这笔交易时，我们的议价能力还不是最强。
费恩先生复述了他打给嘉年华首席执行官米奇?阿里松(Micky Arison)的电话内容，话中不带一丝嘲讽之意。那是在竞争对手的要约被接受的第二天，他致电表示祝贺。这反映出费恩先生这一方的大度，他毕竟曾把这场P&O收购战说成“充满恶意的”。
最终证明，皇家加勒比海把低迷时期估计得太严重了。像它在游轮行业的竞争者一样，在恐怖主义、伊拉克战争，以及亚洲非典疫情相继爆发造成的“完美风暴”中，皇家加勒比海游轮令人惊讶地复苏，主要原因是旅客更愿意坐船，而不太愿意坐飞机了。
各游轮公司也把自己的业务拓展到地区港口，为日益增加的“自驾车”乘客提供服务。这些乘客宁愿开车去他们的登船点，而不愿坐飞机去。
据行业组织国际旅游班轮理事会(International Council of Cruise Lines)统计，全球游轮旅客人数2003年增加6.6%至983万人。旅客支出总额和公司运营成本去年上升至129亿美元，而2000年为103亿美元。“‘9.11’后，经营比原来的想象要好，”费恩先生表示。
皇家加勒比海可能正受益于整个行业的好转，但公司自己也创造了一些发展动力。皇家加勒比海只有2个品牌和29条船，规模比嘉年华小很多。后者有12个品牌，75艘船。但皇家加勒比海通过一些引人注目的营销创举，也在市场上占据了一席之地。这些创举包括，在公司所有游轮上增加攀岩，在“名流”(Celebrity)游轮上安排加拿大马戏团太阳马戏团的演出。在Enchantment of the Seas号明年被拉长时，皇家加勒比海计划在上面增加蹦床和吊桥。
有人认为，海上旅行是属于退休夫妇和老年人的活动。皇家加勒比海正设法改变人们这种想法。今年公司推出了去往南极洲和加拉帕哥斯群岛的Xpeditions品牌海上游，一般大型游轮不会前往这些探险目的地。
皇家加勒比海还提供儿童护理设施和青少年俱乐部，试图以此吸引家庭游客。公司与玩具制造商费雪(Fisher-Price)结成合作伙伴，开发供儿童和父母共同参与的旅行计划，因为它们注意到，过去几年间，3岁以下儿童和父母一起乘坐游轮的数量急增。
此外，即使今年夏天出现了创记录的4场飓风，但是游轮行业仍然未受很大影响。运营商们通过改变航线、将船驶离风暴经过的路线之外，从而保住了预定业务并继续运营。
虽然飓风的冲击让皇家加勒比海的第三季度每股盈利减少了10美分，但公司的净收益率增长12.8%，达到了“9.11”事件前的水平，这是一个重要的行业指标。净收益率的增长归因于公司运能、票务收入和游客在船上消费的增加。
提前预定和定价情况表现强劲，公司预计，第四季度净收益率将从先前预期的1%至3%提高到4%至5%。由于舱位供不应求，因此今年皇家加勒比海的价格已经上涨了7%至9%。
不过，嘉年华还是稳固地保持着老大的地位。去年该公司获得了67亿美元的营业收入，其中不包括P&O Princess的收入。相比之下，皇家加勒比海的收入为38亿美元。
分析师表示，公司债务达58亿美元，其中9.55亿美元为短期债务，沉重的债务负担仍在拖累公司，但皇家加勒比海已表示，计划进行再融资。
油价飚升也是皇家加勒比海的一大担忧，尽管公司第4季度燃料成本的45%已进行了对冲。由于更多旅游者提前预订游轮，以锁定春季和夏季的游轮价格，各家游轮公司现在正享受美元疲软带来的结果。未来或许很难预测，但就目前看来，皇家加勒比海游轮似乎将会进一步增长。
