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Richard Fain - 'Chinese consumers are clearly loving the Royal Caribbean product'

Fain: Royal Caribbean 'synonymous with cruising in China'

The Royal Caribbean brand is 'synonymous with cruising in China' and the company intends to keep investing there, Richard Fain told analysts Thursday. At the same time, he welcomed growth in the market from competitors like the Carnival group because in China, cruising is 'still embryonic. Most people don't know about it.

'We need to work to make cruising a relevant vacation there,' Fain said.

The Royal Caribbean Cruises Ltd. chairman and ceo described demand for Quantum of the Seas as 'simply extraordinary,' and the reaction in China—where the ship will be based year-round, starting this summer—as 'particularly exciting.

'The Chinese consumers are clearly loving the Royal Caribbean product. In China, brand is very important so we're investing heavily in the brand and hardware.' Educating Chinese consumers about cruising is also critical.

Fain said Royal Caribbean will grow China capacity 66% in the coming year, following a 45% growth spurt last year.

SkySea Cruises, the domestic brand venture with Ctrip.com using the current Celebrity Century, will begin operations mid-year after the ship's refurbishment.

Fain called Ctrip 'a very aggressive, dynamic and, frankly, very inspiring company.'

Royal Caribbean's biggest 2015 capacity growth will be in Asia Pacific, a 33% spike, representing 15% of the company's total capacity, according to cfo Jason Liberty. Despite capacity increases over five years, the region continues to generate 'superior yield,' Liberty said.

Michael Bayley, president and ceo of Royal Caribbean International, said wave season so far has been good overall. He's 'feeling good' about Asia Pacific, Australia and China, 'particularly China with the Quantum addition.'

The company is taking shared services, under Royal Caribbean Cruises Ltd. president and coo Adam Goldstein, to 'a new level' in China. In the past, Royal Caribbean's presence was primarily related to marketing and sales, whereas now other areas are involved, including human resources, information technology and supply chain.

 

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