Could Royal Caribbean sell more ships? It’s not off the table

Feb 26, 2021

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

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 sold one of its oldest ships, Empress of the Seas, in December. (Photo courtesy of Royal Caribbean)

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:

Featured image courtesy of Royal Caribbean.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases within the first three months of card membership. Plus, earn a $200 statement credit after your first Delta purchase within the first three months. Offer ends 7/28/21.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles after spending $3,000 in purchases on your new Card in your first 3 months and a $200 statement credit after you make a Delta purchase with your new Card within your first 3 months. Offer expires 7/28/2021.
  • Limited Time Offer: Plus, get a 0% intro APR on purchases for 12 months from the date of account opening, then a variable 15.74%-24.74%. Offer expires 7/28/2021.
  • Accelerate your path to Medallion Status, with Status Boost®. Plus, in 2021 you can earn even more bonus Medallion® Qualification Miles (MQMs) to help you reach Medallion Status.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • 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 $75 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.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
0% on purchases for 12 months
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.