Royal Caribbean Adds Enhancements to Current Offerings

(Reuters)

Royal Caribbean (NYSE:RCL) just might be the goldilocks of the U.S.-based cruise operators. Carnival (NYSE:CCL) is by far the largest and NCL is the smallest, so does that make Royal Caribbean "just right?"

With its latest upgrades, Royal Caribbean has the world's most technically-advanced cruise ships, and now the company is shifting its focus to improve what's featured on the inside to enhance passengers' onboard experience.

We sat down with Lisa Bauer, Royal Caribbean's senior VP of Hotel Operations, to talk about the companies new “Royal Enhancements,” an upgrade program that improves current offerings on its ships -- things like 3-D movie theaters, real Broadway shows, characters from hit movies land a lineup of new themed restaurants like Brazilian churrascaria.

FBN: Lisa, what is this new “Royal Advantages” program all about?

Bauer: To make it simple, some of the features we built into the newer ships are more popular than others, so we are taking the best new features and adding them to other ships in the fleet.

FBN: Royal Caribbean is getting serious about upgrading its onboard entertainment. Has the old-style cruise revue show become passé?

Bauer: Cruise entertainment has gotten much better industry wide in the last few years. It takes a bigger ship to support the cost of better entertainment onboard, because entertainment is still free (i.e., included in the fare) on cruise ships. We brought the original Broadway version of Hairspray to Oasis of the Seas, and Chicago, the Musical to Allure. This month we are putting the full Broadway book version of Saturday Night Fever onboard Freedom of the Seas.

FBN: It looks like you are also adding popular animated characters to your ships.

Bauer: Royal Caribbean announced a new affiliation with DreamWorks Animation (NYSE: DWA) last year, starting with Allure of the Seas. We now also have DreamWorks on Oasis, Liberty and Freedom of the Seas.

FBN: What does that include?

Bauer: We have installed state-of-the-art 3-D movie theaters on those four ships specifically to show DreamWorks films like Shrek, How to Train Your Dragon, Megamind, Kung Fu Panda and any new, first-run movies DreamWorks puts out. We also have DreamWorks characters “live” on the ships to interact with the kids in special shows featured in our AquaTheater and Ice Rinks.

FBN: Taking a page out of the Disney playbook?

Bauer: Yes, but different. While our characters make special appearances and do shows for the kids and families onboard, we don’t want to overwhelm our more regular cruisers. DreamWorks is there for the people who want to see it.

FBN: What else is Royal Advantages providing?

Bauer: Restaurants are another area where we are making big improvements. The Brazilian churrascaria on Allure of the Seas is such a hit that we are bringing it to all four of the ships I mentioned. We are also adding Rita’s Cantina and the English Pub--both of them offering live entertainment. We will also add Isume, the Japanese sushi bar; and Giovanni’s Table for Italian food.

FBN: Cruise lines are always building new ships, and Royal Caribbean just announced a new class of ships will come out starting in 2014. What will those ships be like?

Bauer: Our next wave is currently called “Project Sunshine,” and we have one ship on order for 2014 delivery with the option for another. They are 158,000-tons, about the same size as the Freedom-class, but with 4,100 berths, more passengers per ship. It’s all about efficiency these days, especially with the price of fuel going up.

FBN: What other efficiencies will we find?

Bauer: One thing we are doing fleet wide is customizing the online experience for the cruiser. Soon you will be able to plan your whole cruise electronically -- before the cruise on the Internet, and onboard through your television and video “kiosk” interfaces we are adding to all the ships. If you want a shore excursion, restaurant or show reservation you just swipe your keycard and select it on the screen. If there is a fee, your onboard account will be charged; or for free shows, your keycard becomes your reserved ticket to enter the showroom.

FBN: Royal Caribbean is adding singles staterooms with no supplement charges to some of its existing ships. Does this mean Royal Caribbean is thinking of creating a dedicated singles area for the new Project Sunshine ships, similar to what NCL did on Norwegian Epic?

Bauer: Obviously the singles market has a lot of potential, and we think NCL did a terrific job with the singles program on Epic. We are still exploring those options, but yes, we are definitely considering a larger singles program for the new ships.

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