Could Royal Caribbean consider offering river cruises? This idea isn't as far-fetched as you might think.
Royal Caribbean Group has ownership in many cruise lines, but no river cruise lines. River cruises are very popular in Europe, and this is an area of the market that the company has not touched.
During Royal Caribbean Group's earnings call with investors on Thursday, a Wall Street analyst asked whether the company would consider getting into river cruises.
Jason Liberty, president and CEO of Royal Caribbean Group, did not dismiss the idea, saying “that may be something we consider at some point in the future.”
But before you pack your bags, you can't say, “We're focused on strengthening our core capabilities, growing our core, and further building out our target platform.”
He believes that tenanting a brand is the best way to provide returns to shareholders and grow the business.
But Royal Caribbean Group sees the market as an opportunity. “Rivers are an area where there is some overlap, although there is not a lot of overlap.”
River cruises are a fast-growing market and are attracting the attention of many people who enjoy exploring cruises.
River cruises take vessels much smaller than ocean-going vessels and travel slowly along popular rivers, stopping at major cities along the way.
Traditionally, river cruises have appealed to an older clientele: primary retirees. But recently things have changed. Some river brands are targeting younger holidaymakers interested in active outings.
Companies such as Viking, Avalon Waterways and AmaWaterways have all added more vessels to their fleets to respond to the growing market.
Keep customers within your brand
One reason why going on a river cruise might make sense is because it fits with Royal Caribbean Group's general strategy of offering something for everyone.
Mr. Liberty said during the earnings call that it was important to retain customers even as they age. “We are focused on attracting and retaining customers within our unique portfolio of brands and providing experiences for every moment of their lives.”
“We have been thinking very carefully about having the right brands and the right segments,” he explained, giving examples of how customers can move between different companies.
“There could be a set of grandparents on the Silver Sea taking a cruise with their children and grandchildren next month on the Royal Caribbean brand.”
“That happens all the time. One of our ultimate goals here is to retain our customers and our ecosystem.”
Offering a variety of sailing types has been a strategy adopted by Royal Caribbean Group since its acquisition of Celebrity Cruises. Since then, the company has grown to include full and partial ownership of other lines.
The company holds full ownership of Royal Caribbean International, Celebrity Cruises and Silversea Cruises, and is also a 50% owner of the joint venture that operates TUI Cruises and Hapag-Lloyd Cruises.
Mr. Liberty said he is always looking for ways to do better at what he does, and informing customers about how to navigate within the company's ecosystem is one component of his plan.
Cruise lines offering itineraries that combine river and sea travel
Some companies have already begun to accommodate both river and sea cruises.
Viking Cruises was the first line to offer both river and sea cruises.
They began offering river cruises and added ocean-going vessels to their fleet. We also offer “Ocean & River Voyages” where you can take river and ocean cruises during the same vacation.
Disney Cruise Line has partnered with AmaWaterways to bridge the gap. Through the Adventures by Disney brand, Disney employees serve as guides on sailings operated by Ama.
There are special trips that include a touch of Disney in the experience.
However, AmaWatways are adults only and children are not permitted on these sailings, even though they are sold by Disney.