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Royal Gleanings for Oasis of the Seas

November 25, 2009 By: Susan Young


Royal Caribbean executives
Lisa Bauer, senior vice president, hotel operations; Adam Goldstein, president and CEO, Royal Caribbean, Richard Fain, chairman and CEO, Royal Caribbean Cruises Ltd; and Captain William Wright, senior vice president, marine operations

During a two-night preview cruise for trade and media onboard Royal Caribbean International’s Oasis of the Seas last weekend, the line’s senior management outlined their perspectives about the 225,282-ton ship and its potential for future success.

Heading up the briefing was Richard Fain, chairman and CEO, Royal Caribbean Cruises Ltd., Royal Caribbean International’s parent company. Joining him were these Royal Caribbean International executives: Adam Goldstein, president and CEO; Lisa Bauer, senior vice president, hotel operations; Captain William Wright, senior vice president, marine operations; and Vicki Freed, senior vice president, sales.

Costs and Efficiencies

Energy savings on Oasis of the Seas are 30 percent more than on Royal Caribbean’s other ships. “One could simply build a larger ship,” acknowledged Fain, who said many people expected the line to opt for just a larger version of a Freedom-class ship. But in Royal Caribbean’s perspective, that wasn’t the way to go. “Not only did we make it larger, we’ve added new things,” Fain said.

“We have plowed some of the savings back from the economies of scale into what I call ‘diseconomies’ of scale,’” Fain noted. For example, any savings help cover unusual costs for innovative new features such as hiring synchronized swimmers and high divers to perform in the Aqua Theater.

Innovative offerings like the theater, zip lining and so on, in turn, allow Royal Caribbean to attract higher prices. “We end up with a very good model that’s ‘higher prices, lower costs’ and that’s a model you can take to the bank anywhere,” said Fain.

Tradition, Evolution and Revolution

One watchword for the line early in the ship design process was that it wanted to create something game-changing, as it had done with other classes of its ships in the past, according to Fain. So Oasis of the Seas’ options and amenities are one third traditional, one third evolutionary and one third revolutionary. 

Royal Caribbean’s loyal past guests will comfortably navigate to Café Promenade, the Schooner Bar and other familiar spots onboard. “You’re a Royal Caribbean aficionado and you’re home,” Fain said. 

On the evolutionary side, the line took design and activity elements of its other ships and expanded or improved upon those. “The Royal Promenade is amazingly better but it’s still a Royal Promenade,” Fain noted. The main theater, while similar to that on other ships, has many enhancements.

Revolution came in the ship’s design. Initially, Royal Caribbean looked at simply enlarging the ship with more interior space, but Goldstein said the line’s planning team couldn’t get excited about that as “the ratio of what was outside to what was interior was off.” That dilemma was solved by opening up the central spine of the ship with the 62-foot-wide, open-air interior core.

By changing the ratio of what was internal versus what was external, the planning team’s creative juices flowed.  “The interweaving of being outside, under sky, with al fresco dining, and being able to transit the ship in Central Park or Royal Promenade…and then the family friendly environment that we ultimately built on Boardwalk that connected to Aqua Theater…made us very confident that we were onto something truly special for our guests,” Goldstein stressed.

Other revolutionary features include the first Carousel at sea, the first Coach store at sea and, of course, the industry’s first zip line at sea. Still, “while I hope this [Oasis of the Seas] proves to be -- and it seems to be -- a game-changer, we haven’t obsoleted everything else,” Fain told reporters. Different people want different activities and options.

Size and Ease of Transit

According to Fain, the company wanted to make it easy for guests to get around the ship: “We didn’t want you to have to consciously think about that. I think this ship is easier to get around that most of the ships a fraction of her size.”

For example, Royal Promenade is essentially a main street with everything radiating off it. New touch screens with easy-to-use directions and maps are also helping; Fain said he had been told by a large number of guests about their positive views on those screens (this reporter included).

Ports Versus Sea Days

Because the ship has so many enticing onboard activities and amenities, some agents may wonder if the ship may ever work as a complete destination unto itself for a weeklong cruise to nowhere. But Royal Caribbean has said in the past— and continues to stress— that it doesn’t see that on the horizon.

“We would not seriously contemplate at this point fewer than three ports on a seven-night offering,” said Goldstein. The line’s research continues to show that guests are very interested in the destinations to which the ship can take them as well as what’s onboard on the ship itself. And so three days at sea, three days in port is in our view a pretty winning formula,” he responded. 

Goldstein says the line has spent much time and effort working in tandem with St. Maarten, St. Thomas, Nassau and other Caribbean ports to make the port experiences better than they have been before. That’s crucial given the 6,296 people the ship could carry when full [utilizing all third and fourth berths].  

Pre-Planning or Spontaneous?

Bauer and Fain addressed the balance between pre-planning and spontaneity in Oasis of the Seas’ onboard guest experience. If guests want to book their specialty dining, shows, soda packages or shore excursions ahead of time [before their cruise], then they can.

But free spirits who simply hate pre-planning can simply board, turn on their stateroom’s interactive television and make reservations for spa treatments, dining and shows. Or, guests who don’t book shows ahead of time also may head to the onboard Box Office to secure tickets.

The most popular activities will be offered repeatedly to help smooth the flow and satisfaction of guests. "Hairspray," the Broadway production show, will be offered at least four times on every cruise, according to Bauer. 

And, “if we know there’s a huge demand for [a certain] activity, we then can augment that activity,” said Fain. The line pledges to not sell out activities or shows in advance. Fain said it  won’t be like a concert for which people rush to get tickets – thinking they’ll forever miss their chance. 

Bauer told reporters about the extensive “modeling” the line did to assure guests are satisfied with what’s offered. To plan activity hours and policies, the line looked at everything from how many guests are onboard to the frequency that guests might partake of a particular activity, from how many hours the venue is open to the length of the cruise.

One example the line cited is the new Rising Tide Bar, which elevates like a cloud from Royal Promenade to Central Park while guests enjoy a beverage onboard. It’s expected to be highly popular with guests.

If Royal Caribbean opened that bar at 8 a.m. and it remained open through 1 a.m. the next day, and the cruise is seven days, “we could let 3,576 guests through in one day, so if you have [a full complement of] guests onboard everybody could ride within the first two days if they wanted to,” stressed Bauer.

Economy and Recovery

Ships orders are made and ships designed years in advance, so Royal Caribbean never could have anticipated the recent recession when it set out to build Oasis of the Seas, the world’s largest ship. Still, Fain is hopeful the nation is beginning to come out of the economic funk it’s been in for more than a year. Plus, “we’re doing better across our fleet that most other discretionary [products],” he said, pointing to the inherent value of cruising.

“Obviously, with difficult times and 10.2 percent unemployment, there are a lot of people who have no choice but to stay home, but the option [is great value] for people who are willing and able to spend on a vacation…they really want to get good value,” Fain stressed. “And that pushes us over the top even in this difficult time.”

Free Versus Paid Options

Throughout the planning process, the line created “modeling” to look at pseudo [imaginary] guests and their families and to scope out how the onboard experience would flow. Officials said the goal was to assure that every type of guest will have an outstanding cruise.

In one such scheme, planners looked at families in today’s marketplace with differing personal economic situations. What might they do activity-wise during an Oasis of the Seas cruise? Would the experience be robust for all guests regardless of their budget for discretionary spending?

For example, in the “modeling,” one family was blessed with unlimited discretionary income, another had funds only to splurge for a show ticket but little else, and a third family was on a strict budget with the ability to pay for the cruise and nothing else. 

After looking at free options included in the cruise fare versus certain options for extra services and activities, the results were clear.  “We are offering on this ship [included in the ticket price], by far the most we’ve ever offered on a brand …by far,” emphasized Goldstein.

He stressed the ship’s wide range of complimentary dining, onboard activities and entertainment; for example, the ship has 15 complimentary dining choices for breakfast, lunch, dinner or snacks.

Yet, “we also have never offered as many additional charge opportunities, most culinary but some other ones too,” said Goldstein. One pay option is a Chef’s Table dining experience hosted by the chef; it’s $75 per person inclusive of wine.

Goldstein says it’s important to offer such added-fee specialty choices that appeal to certain types of guests. That said, he believes all guests shouldn’t be ask to subsidize all onboard experiences, particularly ones with more limited interest; that helps keep cruise fares reasonable.

For most pay options, there’s generally a free option onboard, Bauer stressed. Guests might have a hamburger for free in Windjammer Marketplace or go to Johnny Rockets, where a $4.95 fee applies. If guests want treats at the Ice Cream Parlor, it’s a pay experience, yet multiple ice cream machines around the ship provide free soft-serve ice cream. “While we might charge for the cupcakes [at Cupcake Cupboard], the donuts are free,” Bauer said.

Role in the Fleet

Oasis of the Seas and Allure of the Seas, her yet-to-be-launched sister ship, will play an important role in the fleet, but to Goldstein they’re essentially augmenting what’s already a very full-bodied fleet. Royal Caribbean currently has 21 ships in service and one under construction.

Typically what has happened with the Voyager-class, Freedom-class and now Oasis-class ships is that a new ship class creates a domino effect, which frees up older vessels to sail further from South Florida and into the world marketplace. Goldstein said that process is allowing Royal Caribbean to have more presence in Asia, year-round cruises for the UK market and more ships going to Brazil while still remaining a leading competitor in the North American market.

“On the other hand, this ship will be -- from the get-go -- a powerful draw of international customers who are happy to get on planes all over the world and fly to Miami and Fort Lauderdale to have this experience,” said Goldstein. That’s been the case with Liberty of the Seas and Freedom of the Seas, which often draw 20-50 percent of their guests from outside the U.S.

Goldstein said that’s likely to be the case with the new ship as well: “I would be very, very surprised if we didn’t have at least a quarter of our guests on average coming from outside the United States on Oasis of the Seas.”

Years ago, Royal Caribbean years ago had no clue that any Voyager-class ship would ever go beyond Miami for embarkation. That’s happened. So will Oasis of the Seas ever sail from ports outside the U.S.?  “It will go over its lifespan wherever the market takes it,” Goldstein said.

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