Michael Bayley on China issues, Asia distribution and if region's ripe for an Oasis ship

Michael Bayley in Singapore announcing the six-month Quantum deployment for 2019/2020 Michael Bayley in Singapore announcing the six-month Quantum deployment for 2019/2020

President and CEO Royal Caribbean International Michael Bayley shook his head when asked if he is worried about overcapacity in China.

'We have presence in all four global regions and every region has its own dynamics. When we look at Asia and China we see huge opportunity,' he said. That's especially so with Royal Caribbean being the world's largest brand, with a fleet of 24 ships and six on order.

Years of investment

Bayley explained it takes years of investment to grow the market, get people to experience cruises and then talk about them. This was true in the US, where the company began.

Asia is a work in progress, Bayley said. For example, in Singapore, Royal Caribbean set up office some 11 years back. Faithfully attributing the company's success in Asia to the pioneering efforts of the late Rama Rebbapragada, Bayley noted the brand recently chalked up its millionth cruiser from Singapore.

The Royal Caribbean chief was in Singapore on Monday to announce Quantum of the Seas is expected to add some 150,000 passengers to the cruising scene and increase Royal Caribbean's capacity there by 30% during a six-month deployment from November 2019 to April 2020.

'You have to have a long-term perspective,' Bayley said. 'We put a lot of energy into planning and developing distribution channels. Each channel can exist only when it offers true value to the customer.'

Bayley does not exclude the controversial charter model in China in this equation.

'Without charterers we wouldn't have experienced that enormous growth we have seen in China,' he said, However, he emphasized it's time to evolve when it comes to distribution.

'We are on the journey of distribution development and "channel of choice" optimization. We are a believer in a "channel of choice" in all markets. It is the only way you can grow a business to a significant scale, by allowing customers to access whichever channel they prefer. All channels, including charter, need to be fully optimized,' he said.

Excalibur will serve agents as well as cruisers

Travel agents remain the key channel and the company provides a wide range of support including technology, marketing and sales support. The Excalibur app, for instance, is a multimillion-dollar investment in a communication platform for Royal’s universal community, which includes agents, passengers and staff. The intention is to migrate from traditional to digital communication platforms with many customer, agent and staff needs served by Excalibur.

Bayley foresees that by year end, the Excalibur app will be used on half the fleet. 'It is an ambitious project and will be quite transformational,' he said.

Turning to China's Korea travel ban—'a bit of shock' that 'took some time to absorb'—the silver lining was that it forced the cruise industry collectively to look at other options.

'While we would be delighted if Korea is open again from a China market perspective, we have realized that there is a Chinese market for longer itineraries,' Bayley said. Instead of the usual four- or five-day cruises, Royal Caribbean has been successfully offering six- to eight-day sailings.

How close is Asia to getting an Oasis-class ship?

Bayley thinks Asia is ready for an Oasis-class ship but would need to produce sufficient volumes to maintain year-round deployment, since Royal Caribbean would not send such a large ship for just a season.

'It's close,' he told Seatrade Cruise News. 'When we are confident, we will announce.'

Posted 12 April 2018

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Jacintha  Stephens

Singapore correspondent

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