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Royal Caribbean's "Ask Adam" Afternoon

April 30, 2009 By: David Eisen


adam

For an hour Wednesday afternoon, the cruising public (and agents) had the chance to ask Royal Caribbean International President and CEO Adam Goldstein anything that was on their minds. And they did. The cruise line conducted an online forum that was chock full of questions, from soft balls to sharp barbs. The level-headed Goldstein answered them all as thoughtfully as he could. 

Some highlights:

debbie: Are there any cutbacks on the cruises due to economic hardships?
Adam: We have continued to make our products stronger over time. This involves a constant process of change. When we develop new offerings and remove previous offerings, we often encounter resistance from guests who value the prior offerings. We believe the reason our current guest satisfaction ratings are the highest that they have been in the recent years, is because on balance the product is stronger. An excellent example of this would be our new My Time Dining offering. We have maintained our traditional dining approach for the many guests who value that and at the same time, we have introduced a new offering that combines flexibility with the incredible service that people expect of us.

G-307085243: I was recently informed of a change in an itinerary from Mexico to the Pacific Northwest due to the swine flu. Why was that the route change and why not someplace warm as per the reason we chose the Mexican cruise to begin with? Why not Hawaii?
Adam
: Of course I am receiving many questions on swine flu and I apologize if I cannot answer all of them. For Mariner of the Seas, we must reach a qualifying foreign port of call to offer a legal itinerary out of Los Angeles. If we are not going to Mexico, our only other choice is Canada. We also were focussed on keeping a seven-nigh offering. To go to Hawaii, and also make a legal itinerary, would have resulted in about a three week cruise.

afrifest: I'm a former Celebrity/Royal Caribbean agent who lives in Wichita. How strong is the Midwest market and what booking strategies would you recommend?
Adam: The Midwest market is extremely important to Royal Caribbean and has been for 40 years. Because people living in the Midwest normally require flights to reach the cruise, it's important to investigate air options as far as possible in advance of the cruise. Please compare our air/sea offerings to what you can obtain in the open market.

bearcosmo: Please explain why RCI's prices are much higher than CCL's for the same itineraries. I love RCI, but in this economy I have started to look at Carnival, as their prices are so much lower.
Adam: Royal Caribbean expects to and does command a price premium to our closest competition. This is the result of customer expectation built up over 40 years. Our Gold Anchor Service and the incredible features of our ships make for a more compelling guest experience. In other words, we deliver the WOW!

Todd: How are future bookings looking for the Oasis class ships?
Adam: Last week on our quarterly earnings call with Wall Street, I mentioned that we were very pleased with the bookings on Oasis of the Seas. Of course, with double occupancy of 5,400 guests, there is still room on all sailings. Allure of the Seas is now open as well.

K: With current economic conditions and the most recent situation in Mexico, any suggestions on how to generate new business? Bookings are very very slow in coming...
Adam: Even before the outbreak of swine flu, we and the rest of the travel industry were confronting the recession just like everyone else. We are stressing the value that a cruise represents. There is no other way to gain such a variety of experiences for the price. We hope that as many travel agents and consumers as possible will understand and respond to this value.

auggie: I am a diamond member who has just learned about the program changes, I am still not happy with the changes to the program, even though it has been revised. Please tell me why I sohuld continue to sail exclusively with RCI?
Adam: The main reason to sail exclusively with Royal Caribbean is the experience that our people deliver. The Crown and Anchor Society is a very competitive loyalty program as compared to other cruise lines. We recognize that many Diamond members are unhappy about our decision to restrict eligibility for the concierge lounge to suite and Diamond Plus guests. Unfortunately, this was the only means by which we could address the problem of overcrowding in the lounges. Our overall offering and the revisions we made are intended to recognize the outstanding loyalty that Diamond-level guests demonstrate to us.

Trina: The Oasis class is 220,000 tons. Do you foresee developing even larger ships? Also, with so many more people on the ship, what facilities and processes are being put in place to handle the volume? I'm also curious about what impact such a large vessel will have on the environment.
Adam: I am often asked about larger ships in the future. While we don't have anything planned, the history of shipbuilding over time is that ships get larger. We'll see. As I mentioned before, our focus is on putting the facilities and processes in place to create a marvelous guest experience on Oasis of the Seas. In case anyone doubts that this is on Lisa Bauer's mind, there is a countdown clock above her door. Lisa, our SVP of Hotel Operations, and her team are the best in the business and they will be ready. As for the environment, between now and delivery of the ship, we look forward to talking publically about the enhancements that Oasis of the Seas will reflect. We are very proud of the progress we will be discussing.

Bob: How can you command a premium price over the other lines, when your cut backs in food quality and entertainment etc have made the other lines more attractive, especially with their lower pricing. In the food area you fail to deliver the WOW.
Adam: We realize that not everyone is going to be enamored of all of our products and services. I'm confident saying that our entertainment program is foremost in the industry and is widely recognized as such. As for our culinary offering, I believe we are very strong in our Windjammer offering and in our specialty restaurants. We also receive strong ratings in our dining room but we will look for opportunities to enhance this offering as we go forward.

Derek: I'm sure there are many, but if there is one thing about Oasis that you are most excited for your cruisers to experience, what is it?
Adam: Speaking selfishly, I would say the state-of-the-art table tennis stadium. Really, we are all tremendously excited for our guests to experience Central Park, the Boardwalk and the AquaTheatre because such spaces have never existed on a ship before. And you may think you know the Royal Promenade but you don't know THIS Royal Promenade.


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