Could Royal Caribbean sell more ships? It's not off the table
Royal Caribbean Group might not be done selling ships.
The parent company of the world's largest cruise line, Royal Caribbean, as well as Celebrity Cruises and Silversea, is taking an "opportunistic" approach to ship sales as it navigates the unprecedented shutdown of most of its operations worldwide, one of the company's top executives said this week.
The company already has reduced the capacity of its 26-ship Royal Caribbean fleet by selling two older ships in December, and just last month it sold its entire three-ship Azamara brand to a private equity company, Sycamore Partners.
For more cruise news, reviews and tips, sign up for TPG's new cruise newsletter.
"This opportunity came our way here with Sycamore [that] gives Azamara an opportunity to grow, and I think ... it'll do quite well under ... this other venture," Royal Caribbean Group CFO Jason Liberty noted this week during a conference call with Wall Street analysts. "Moving into other ship sales and so forth, we remain opportunistic."
Liberty suggested that Royal Caribbean was looking hard at how the company should be positioned when it comes to ship numbers and types when the year-long shutdown to most cruising worldwide finally ends.
"We have really tried to be opportunistic and strategic and look at ... how do we want to prioritize, whether it's how we're investing or how we're supporting on our resource base."
Related: The best credit cards for booking cruises
Royal Caribbean Group has had to raise billions of dollars to stay afloat over the past year as most of its ships remained idle. It's losing hundreds of millions of dollars per month. But Liberty suggested that the ship sales the company has done weren't so much about raising cash as about setting up the company's brands for success in a post-coronavirus world.
"I think we need to remember that, pre-pandemic, all of these ships generated quite a bit of cash flow and so ... for us, typically, the tests on [whether to sell a ship] is a little bit less about the cash that we would receive," he said. "It's more strategic on whether we think this ship, whether in its current state or through some moderate investment, is something that fits our brands."
Related: The ultimate guide to Royal Caribbean
With the sale of two ships in December, Royal Caribbean Group's Royal Caribbean brand now has 24 ships. Its Celebrity brand has 12 ships. The Silversea brand has nine vessels.
That's 45 ships in all at wholly-owned Royal Caribbean brands, down from 50 just a few months ago.
Royal Caribbean Group also owns a 50% stake in two German lines, TUI Cruises and Hapag-Lloyd Cruises, that together own 13 more vessels.
Liberty didn't say which ships the company might be willing to sell in the coming months if the right offer came around. But typically cruise lines only sell their oldest, least-efficient vessels.
The oldest vessels in the fleets of the Royal Caribbean brands include the four Vision Class ships at Royal Caribbean (unveiled between 1996 and 1998) and Silversea's Silver Wind, Silver Cloud and Silver Explorer (all built between 1989 and 1995).
Related: Everything you need to know about Royal Caribbean cabins
The two Royal Caribbean ships the company sold in December -- Empress of the Seas and Majesty of the Seas -- were built in 1990 and 1992. The three Azamara ships the company sold date to 2000 and 2001.
Liberty noted that the Azamara ships were less efficient when it comes to costs on a per passenger basis than the average vessel in the Royal Caribbean fleet due to their small size. The three ships hold just 700 passengers each.
The sale was "[good] on the cost standpoint because, you know, [Azamara's] ships were smaller [and] for spreading of costs were not as efficient," Liberty told the Wall Street analysts on the call.
Planning a cruise? Start with these stories:
- The 5 most desirable cabin locations on any cruise ship
- The 8 worst cabin locations on any cruise ship
- A quick guide to the most popular cruise lines
- 21 tips and tricks that will make your cruise go smoothly
- 15 ways cruisers waste money
- 12 best cruises for people who never want to grow up
- What to pack for your first cruise
Top offers from our partners
How we chose these cards
TPG featured card
Rewards
3X | Earn 3X Miles on Delta purchases and purchases made directly with hotels. |
2X | Earn 2X Miles at restaurants worldwide, including takeout and delivery in the U.S. and at U.S. supermarkets. |
1X | Earn 1X Miles on all other eligible purchases. |
Intro offer
Annual Fee
Recommended Credit
Why We Chose It
Build your loyalty to Delta by applying for the carrier's mid-tier card option, the Delta SkyMiles Platinum card. The annual fee is quickly recouped by the card's travel perks, such as an application credit to Global Entry or TSA Precheck, annual companion certificate and so much more. Plus you can fast-track to elite status simply through card spend.Pros
- Earn bonus Medallion® Qualification Miles (MQMs) and an Medallion Qualifying Dollar (MQD) waiver when you hit specific spending thresholds with your card within a calendar year
- Receive a Domestic Main Cabin round-trip companion certificate each year
- Statement credit for TSA PreCheck/Global Entry fee (up to $100)
- First checked bag free
Cons
- Doesn't make sense if you don't fly Delta
- SkyMiles aren't the most valuable airline currency
- Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights. Plus enjoy Main Cabin 1 Priority Boarding and settle into your seat sooner.
- New: Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Mile on all other eligible purchases.
- Enjoy a per-visit rate of $50 per person for Card Members and up to two guests to enter the Delta Sky Club when traveling on a Delta flight.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees
Rewards Rate
3X | Earn 3X Miles on Delta purchases and purchases made directly with hotels. |
2X | Earn 2X Miles at restaurants worldwide, including takeout and delivery in the U.S. and at U.S. supermarkets. |
1X | Earn 1X Miles on all other eligible purchases. |
Intro Offer
Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.Earn 90,000 Bonus Miles50,000 Bonus MilesAnnual Fee
$250Recommended Credit
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.670-850Excellent/Good
Why We Chose It
Build your loyalty to Delta by applying for the carrier's mid-tier card option, the Delta SkyMiles Platinum card. The annual fee is quickly recouped by the card's travel perks, such as an application credit to Global Entry or TSA Precheck, annual companion certificate and so much more. Plus you can fast-track to elite status simply through card spend.Pros
- Earn bonus Medallion® Qualification Miles (MQMs) and an Medallion Qualifying Dollar (MQD) waiver when you hit specific spending thresholds with your card within a calendar year
- Receive a Domestic Main Cabin round-trip companion certificate each year
- Statement credit for TSA PreCheck/Global Entry fee (up to $100)
- First checked bag free
Cons
- Doesn't make sense if you don't fly Delta
- SkyMiles aren't the most valuable airline currency
- Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights. Plus enjoy Main Cabin 1 Priority Boarding and settle into your seat sooner.
- New: Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Mile on all other eligible purchases.
- Enjoy a per-visit rate of $50 per person for Card Members and up to two guests to enter the Delta Sky Club when traveling on a Delta flight.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees