During Royal Caribbean's second quarter 2018 financial call with investors, the company shared some interesting anecdotes, facts, and insight into the ever changing cruising environment.  While most of the information discussed in these earnings calls deal primarily with financial indicators, cruise guests can glean some insight into how Royal Caribbean runs its business.

Symphony of the Seas debut has been spectacular 

Royal Caribbean Cruises Ltd. (RCL) Chairman and CEO Richard Fain started off the call with investors beaming about the positive response Symphony of the Seas has received in her inaugural season in Europe.  Fain indicated that not only is the ship booked well, but guests are raving about the experience and the high level of service they are experiencing.

"Her performance for a first time ship in a new market. For her to perform so amazingly well when she is the fourth in a series, is a testament to the innovations the team has incorporated and the power of the Royal Caribbean International brand.

This ship has remarkable new wow's, new shows, and new activities, but what truly sets her apart is the careful execution and high level of service which have been pivotal in achieving these record-breaking ratings."

Smart phone update

Of particular interest to Royal Caribbean cruisers is an update was given on the progress being made with the cruise line's new smart phone app and technology innovation, known as Project Excalibur.

Fain offered an update on where the project stands, and seemed bullish on the prospects of rolling the app out to most ships in the fleet by the end of 2019, as well as the progress being made.  There were no specific updates in terms of when certain functionality will be completed, but it did sound like they wanted to get it right the first time, instead of just pushing out an app that may or may not work well.

"The program is on track and the progress is impressive. We have taken a methodical, hands-on approach to this implementation, rolling out new upgrades on a monthly basis or even more frequently. We're finding that this 'softly softly' approach allows us to move more quickly, but also to correct the errors early before they impact a lot of vacations.

We continually add features to the app, and we remain on our trajectory of having half the fleet connected by the end of this year and most of the rest by the end of next year.

The most complete version of the app today is on Symphony of the Seas, and in December, that distinction will be taken over by Celebrity Edge.

One interesting milestone is the introduction of frictionless arrival.  We have been rolling this out on a limited basis and expect that it will be operational on a large scale basis on Symphony of the Seas and on Celebrity Edge later this fall.

By the way, we recently trademarked the term 'frictionless', so don't expect to see that being used by any other cruise line."

Higher onboard revenue is up (again)

If you spend time listening to these earnings calls, one trend that continued again this quarter was higher spending by guests, namely in the form of drink packages and other packages that can be purchased online or onboard.

In short, a lot of Royal Caribbean's revenue can be traced back to guests not only booking cruises in droves, but also because they are spending more than ever once onboard.

RCL Chief Financial Officer Jason Liberty spoke about onboard spending during his summary of the quarter, "The beat was driven by stronger than anticipated close-in demand, and better than expected onboard revenue spend.

Onboard areas, such as beverage, specialty dining and internet, helped deliver a 5.5% year-over-year increase in onboard revenue."

Mariner of the Seas singlehandidly helped drive up Caribbean demand

If there is one ship not named Symphony of the Seas that has hit a home run for Royal Caribbean, it is definitely Mariner of the Seas.  Mariner of the Seas has the distinction of being a very popular choice with consumers that are looking for short cruises, and has been a boon for the cruise line in terms of being booked well and driving up revenue.

In providing an overview of the Caribbean cruise market, Jason Liberty spoke about the impact Mariner of the Seas has had, "Demand for the Caribbean sailings has been strong, with bookings trending ahead of last year's very storng numbers. Our Caribbean capacity is up in the back half of the year, due mainly due to the addition of the reimagined Mariner of the Seas for the short Caribbean market.

Our strategy behind modernizing the Mariner of the Seas was to offer the best alternative for a short Caribbean getaway as a response to consumer trends. The younger generations are opting for shorter, more frequent vacations and the Mariner of the Seas is very well positioned for this segment with onboard activities, dining options, and entertainment similar to those on Oasis class ships.

Mariner of the Seas is booked very well and we are particularly excited about 2019. While we generally don't expect to recieve many bookings for short Caribbean sailings that are more than six months away, Mariner of the Seas' load factors in the first half of 2019 are closer to those of seven-night products than they are to shorter products."

Lessons learned from 2017 hurricane season

Towards the end of the call, an analyst asked Royal Caribbean's leaders about any lessons learned from the 2017 hurricane season that they can apply to the 2018 hurricane season.  This was an opportunity for Royal Caribbean to talk about the impact the cruise line had on the people affected by the storms, and the positive public relations and humanitarian response that Royal Caribbean saw.

Richard Fain spoke about the lessons learned, "We felt our response last year was really ended up being quite good. Probably built up a fair amount of good will from the way we handled it, and I'm not sure that from a pure financial point of view we learned much that would significantly change the outcome if you had, again, a hurricane that exactly tracked as our ships itinerary and exactly hit the ports of call on the days that they would be most impactful. So we constantly try and learn, and obviously there are always some lessons to be learned, but overall, I think we felt that last year we did pretty well.

I do think though that people should be impressed by how well the destinations responded afterwards. These were horrific events for them, but now people are reporting back and travel agents, which are always an important source of information as well as internet chatter, shows how well they've recovered and I think that may help us a little bit in terms of assuaging the concern that people had that if they went to some of these destinations afterwards they would encounter a bad experience. And that simply hasn't been the case."

From rock climbing to waterslides and even a virtual reality bungee trampoline, Royal Caribbean’s Mariner of the Seas has an activity for every member of the family. Take a tour of the ship's newly amped up sports deck and all it has to offer.

Guests on Royal Caribbean's newly refurbished Mariner of the Seas have spotted another change to the ship, a change in how Royal Caribbean handles what used to be called formal night.

Royal Caribbean Blog reader Nick Vitani shared with us a copy of the Cruise Compass from Mariner of the Seas where the new dinner dress suggestions were listed.

The Cruise Compass on Mariner of the Seas lists a dinner dress suggestion of "Wear Your Best", which is described as "Say goodbye to Formal Night, and hello to Wear Your Best.  Get glamorous. Be Chic. It's time to shine - your way."

Casual nights are referred to as "Laid Back Lounging", where jeans, polos, blouses or sundresses are listed as appropriate dress for dinner in the main dinign room.  Shorts are welcome for breakfast and lunch.  

Royal Caribbean's Mariner of the Seas arrived to her new home at PortMiami today after a $120 million upgrade that added new thrills, restaurants, staterooms and entertainment.

Mariner of the Seas will offer short getaway cruises with 4-night weekday and 3-night weekend cruises from Miami to The Bahamas. Her entrance to the short cruise market radically changes the dynamic of what a weekend cruise can offer. Giving millennial travelers more ways to play, the ship’s short itineraries pack more adventure than ever with Sky Pad, a virtual reality, bungee trampoline experience; the cruise line’s first Polynesian-inspired, tiki-chic bar, The Bamboo Room; glow-in-the-dark laser tag, racer waterslides and more.

Royal Caribbean added a lot of new features to Mariner of the Seas, including:

• Sky Pad – The gravity-defying bungee trampoline experience amped up with virtual reality
• The Perfect Storm – A thrilling pair of three-story-high racer waterslides called Cyclone and Typhoon
• Laser Tag: Battle for Planet Z – An epic glow-in-the-dark battle for the last planet in the galaxy
• Escape Room: The Observatorium – Royal Caribbean’s newest escape room challenge
• FlowRider – The cruise line’s signature 40-foot-long surf simulator, perfect for hanging ten
• The Bamboo Room – A laidback Polynesian watering hole with a throwback vibe and kitschy-cool craft cocktails like the Island Old Fashioned and Tiki Tea – the first in Royal Caribbean’s fleet
• Playmakers Sports Bar & Arcade – For fans watching their home team on one of more than 25 TV screens, making their own legendary plays at the arcade, or refueling on game-day favorites
• Jamie’s Italian – Serving fresh, handmade and rustic Italian fare by Chef Jamie Oliver, one of Britain’s most famous food exports
• Izumi Hibachi and Sushi – Asian-inspired dining featuring hibachi, sushi and sashimi and more – made to order with authentic flavors, the freshest ingredients and impeccable presentation

Mariner of the Seas will welcome guests for the first time on Monday, June 25, as it sets sail on a 4-night cruise to The Bahamas. The newly reimagined ship will continue to offer 4-night weekday and 3-night weekend itineraries from Miami, with visits to Nassau and CocoCay. Beginning May 2019, Mariner will sail to the new Perfect Day at CocoCay, the first destination in Royal Caribbean’s recently announced collection of private island experiences around the world.

Mariner of the Seas is the second ship in Royal Caribbean's fleet to undergo the Royal Amplified program, which is a $900 million commitment to reimagine its fleet.

Royal Caribbean's Mariner of the Seas arrived in Miami this morning following a massive bow-to-stern upgrade and we have a glimpse of the new changes the cruise line made.

Mariner of the Seas now boasts the Sky Pad, a first-of-its-kind virtual reality bungee trampoline experience at sea, glow-in-the-dark laser tag, a tiki-chic lounge and a wide range of dining experiences.

Mariner of the Seas recently underwent $120 million revitalization that includes bold, new features and experiences. Mariner will offer exciting 3- and 4-night cruises to from PortMiami to The Bahamas, giving thrill seekers a break from their ordinary routine and adding adventure to their weekends.

Mariner of the Seas is the second Royal Caribbean cruise ship to be upgraded as part of the Royal Amplified program that will add new features to the Oasis, Freedom and Voyager Class ships.

Mariner of the Seas is being amped up with $120 million worth of bold, new features and experiences. When complete, Mariner will offer exciting 3- and 4-night cruises to The Bahamas, giving thrill seekers a break from their ordinary routine and adding adventure to their weekends. The transformation will include an out-of-this-world and first-of-its-kind virtual reality bungee trampoline experience at sea, glow-in-the-dark laser tag, a tiki-chic lounge and a wide range of dining experiences.

Royal Caribbean's Mariner of the Seas is currently being upgraded at a dry dock in Cadiz, Spain and we have a look at the progress being made.

Mariner of the Seas is the second Royal Caribbean cruise ship to be upgraded as part of the Royal Amplified program that will add new features to the Oasis, Freedom and Voyager Class ships.

After an extensive $90 million makeover, Mariner's is scheduled to offer 3- to 4-night Bahamas cruises beginning in June 2018 out of Miami, Florida.

During Royal Caribbean's first quarter 2018 financial call with investors, the company shared some interesting anecdotes, facts, and insight into the ever changing cruising environment.  While most of the information discussed in these earnings calls deal primarily with financial indicators, cruise guests can glean some insight into how Royal Caribbean runs its business.

Social media driving demand

Off the bat, Royal Caribbean's top brass was quick to point out that social media is crushing it in terms of raising the brand's awareness to consumers, assuaging myths about cruising and most importantly, driving demand.

Royal Caribbean Cruises Ltd. (RCL) Chairman and CEO Richard Fain spoke about the impact of social media, "I attribute some of the recent healthy growth and demand to our success in the social media environment. Our social media teams really are doing an amazing job."

RCL Chief Financial Officer Jason Liberty also talked about how social media has helped Royal Caribbean this quarter, "Levers, like social media and so forth, are really helping break through stereotypes on cruise and we have seen a real change in our new to cruise volumes.  That is also suggesting that a lot of these past detractors are becoming fans of cruise."

Symphony receiving tons of good press for a sister ship

There is no question that Royal Caribbean is proud of the launch of its newest ship, but the executives were down right impressed by how well Symphony of the Seas is selling, especially considering she is the fourth sister ship in the class.

Mr. Fain spoke about the public's reaction to Symphony of the Seas, "The public reaction to Symphony of the Seas was surprising even to us. Even though she is the fourth in the amazing Oasis Class series of ships, she has so many new amenities and attractions, that our guests and the media were simply blow away. Rarely has a sister ship received such press, and rarely has it been so deserving of it."

Mr. Liberty expanded on the results Symphony of the Seas has brought to the cruise line, "Prices for Symphony have not only exceeded our lofty expectations, they have also been even better than we saw from Harmony last year."

Royal Caribbean International CEO Michael Bayley shared an anecdote about Symphony of the Seas' early success, "The week after we introduced Symphony of the Seas, our bookings beat track by 50%. That is the week after we introduced the ship, so it's really performing well."

Consumers want shorter, more frequent vacations

A trend that Royal Caribbean has picked up on is the desire for short Caribbean getaway cruises.  As a result, Royal Caribbean has invested heavily in Mariner of the Seas and the improvements coming to CocoCay.

"We're seeing more and more people opting for shorter, but more frequent vacations. We are responding to that call by modernizing Mariner of the Seas, which is one of our Voyager Class ships, and we're raising our game in the short cruise market with this upgraded vessel, " Mr. Fain explained, "At the same time we also announced a major upgrade to our private destination in the Bahamas at CocoCay that we are calling, appropriately I might add, Perfect Day. Perfect Day in that destination will be another great addition to our Caribbean offering.  It is really thrilling to see the work take shape, and I'm certain that this destination will get tongues wagging just as much as our new hardware has done."

Michael Bayley also spoke about what Royal Caribbean is doing to meet customer demand, "We're very excited about Mariner as a product coming into the shorts market, and that's very much focused on new to cruise, and Millennial, and that really is the on ramp for that market.  That ship is literally like having an Oasis Class ship in the short product market, because its capacity is just over 3200-3400 every three or four days."

Guest spend & onboard revenue is up a lot

If you want to find the "secret sauce" to what is making the biggest difference in Royal Caribbean's quarterly growth, onboard revenue is a big factor.  This means the things guests spend on their cruise above and beyond the cruise fare.

Mr Liberty spoke about the growth the cruise line is seeing in this area, "The main driver of the positive earnings in yield was the continued strength in onboard revenue, which was up 6.3% for the quarter. This result is notable considering that it follows an 8.9% improvement from the first quarter of 2017."

"Guest spend from onboard activities has continued to shift towards areas that involve experiences over buying things, and this quarter was no different. Beverage packages, specialty restaurants and internet were the main revenue streams driving the quarterly beat."

Mr. Bailey also spoke about the onboard revenue growth that Royal Caribbean is seeing, "We've been really pleased with our pre-cruise sales, and we've seen a significant uplift year over year that's been increasing for the past couple of years and it's been a big driver of onboard spend.  We kind of figure, for every dollar that we earn pre-cruise, we'll see somewhere between a 30 and a 50% uptick in the onboard spend."

"And then of course over the years, we've invested quite heavily in new venues, new attractions onboard of our ships and many of those are revenue generating.  We're beginning to see a lot of those now yielding superior revenue because of the kind of services they provide."

Cuba update

Another area that we received an update on was Cuba and cruises there.  A recent leadership change alongside strong demand for cruises to Cuba generated an update on where the cruise line stands with regard to this newly offered destination.

Royal Caribbean Chief Operating Officer Adam Goldstein spoke about Cuba, "We've been commenting over time about the fact that the Cuban market has been a good market for us to enter. The customer satisfaction about Havana has been very, very high. But the reality is that there is still just one functioning pier that ships can go to on either side of the pier in Havana.  There is going to have to be some type of considerable infrastructure improvement that takes place over the next several years, that will probably take time."

"I think what we've been seeing lately is that the Cuban Government has gotten a little bit more efficient in maximizing the use of the pier on both sides, and our company has definitely been a beneficiary of that. We've been able to increase the number of sailings on a year over year basis, even though their capacity hasn't increased."

"For what it is, it's been terrific, but in the overall sense of our portfolio, it is still fairly small. And we haven't seen any change whatsoever in their attitude towards us or their dealings with us, as it relates to their change in government to this point."

A look at the state of digital marketing

Michael Bayley provided a look at how Royal Caribbean is leveraging digital marketing (as opposed to traditional marketing) to better reach customers.

"We think that there's better targeting, and it's a more efficient channel. And certainly, with our social media presence, we believe that we've maneuvered ourselves into a really strong position in our space. In fact, we just recently conducted an independent survey of where we are positioned in terms of the social media universe, and we came out of it exceptionally well, in terms of how people view Royal Caribbean through that lens and how they are engaging with Royal Caribbean."

"We are also seeing that with the response from onboard internet, and how people are using the accelerated internet to utilize social media to actually promote our brands, which has been really quite effective."

Royal Caribbean International is inviting adventure seekers to break out of their ordinary routine and take their weekends to new heights with the debut of the reimagined Mariner of the Seas. After an extensive $90 million makeover, Mariner's 3- to 4-night Bahamas cruises will offer the chance to do, see and experience more than any quick getaway has ever done before, complete with an out-of-this-world bungee and trampoline virtual reality experience, a glow-in-the-dark laser tag arena, a tiki-chic lounge and more.