For those who don’t know, Royal Caribbean has some very large cruise ships. If you look at the top ten largest cruise ships in the world, seven of them are owned by Royal Caribbean. So that does raise the question, is a bigger ship better?
Ships are expensive to build in both time and resources. The latest ship to the Royal Caribbean fleet cost an estimated $950 million to make for a 1,142 ft long vessel. That’s over three football fields long! In addition to having a guest count of 4,180, the ship boasts a multi-use roller rink space that can be used for bumper cars as well, an aqua theater for diving shows, several specialty restaurants, a surf simulator, mini golf course, a central park, several stories of rock wall, and so much more. That’s one of the nice things about the bigger cruise ships. There becomes more space to add other things besides rooms for sleeping. My first Royal Caribbean ship was the largest in the world when it was built in 1992. They only managed to fit one theater, one specialty restaurant, and one small water park for children. Even if you are trying to build a small cruise ship, say to do river and coastal cruises, it can still cost quite a bit. American Cruise Lines’s latest ship, the American Harmony, cost $40 million for a 269 ft vessel. So, not quite a football field long. Ultimately, larger ships mean more passengers so the cost of running the ship can be much more spread out. When looking up an Alaskan cruise for Royal Caribbean and American Cruise Lines, you find much different prices. Prices for a room start at $8,090 for a ten night cruise aboard the American Constelation with a guest population of 175 for American Cruise Lines. On the other hand, Royal Caribbean charges $1,429 per passenger for a cheap room on their 11 night voyage with a guest population of 4,180.
These are a lot of numbers, but what am I getting at? If you were to sell all rooms at the cheapest price available without any discounts (neither of which would ever happen, but this is useful as an illustration), the money coming into American Cruise Lines for this singe trip would be $720,010, while Royal Caribbean would take in $5,973,220 for their cruise. This is how American Cruise Lines makes their money, but, even with all that money, Royal Caribbean is probably just breaking even.
You see, American Cruise Lines includes pretty much everything on the ship with the cost of the cabin. So that’s all the food, drink, and most shore excursions that you don’t have to pay extra for. Not only that, but every room has a window if not a balcony. Royal Caribbean takes a different approach. While there are many things free, such as the buffet, the production shows, and the sports activities on the ship, you can buy things to enhance your voyage like specialty dining and shore excursions. This is how Royal Caribbean can make money to keep building bigger, more extravagant ships. Though, if you want a window, you better be willing to spend more money. The cheap cabins aren’t very big and they are in the middle of the ship, but if all you want to do is sleep there and keep your things safe, not a bad choice.
There is much more to this debate, but I’m already rambling. I’ll continue this topic another time.