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15 Jun 2018

BY Rob Gill

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Royal Caribbean to ‘accelerate’ Silversea fleet expansion

Royal Caribbean Cruises Ltd is planning to “accelerate” the growth of the Silversea brand after buying a majority stake in the luxury cruise line.

Silversea Silver Whisper.jpg
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Royal Caribbean to ‘accelerate’ Silversea fleet expansion

RCCL has purchased a 66.7% shareholding in privately owned Silversea for $1 billion, with the deal set to be completed in the second half of 2018.

 

Richard Fain, RCCL’s chief executive and chairman, said Silversea could “achieve more long-term capacity growth” as part of a larger company than as a standalone brand.

 

He called Silversea a “crown jewel”, which will make RCCL’s portfolio of brands “complete and well rounded”.

 

Silversea, which specialises in luxury and expedition cruising, currently has nine ships in its fleet with another two vessels currently on order for delivery in 2020 and 2021.

 

“We will accelerate the growth of the brand and expand the fleet,” said Fain during a conference call with investors following the announcement of the acquisition.

 

“Adding ultra-luxury and expedition cruises not only complements our current offer, it gives us a tremendous opportunity for growth. This crown jewel completes us.

 

“We could well have built into this market over time but Silversea gives us immediate access to this market. It’s a very strong brand with an existing fleet of nine ships.”

 

MORE: Royal Caribbean Cruises Ltd to buy $1 billion majority stake in Silversea

 

RCCL chief financial officer Jason Liberty added: “Obviously this is a very attractive segment for us – one of the strategic rationales is to be growing this brand and growing in this segment.”

 

Fain stressed the continued importance of agents for RCCL who have been “critical to our success”.

 

“They can now help us with our newest brand,” he added. “Travel agents now have an offer for their guests that was previously missing from our group.”

 

RCCL expects to make around $50 million per year in savings and synergies following the closing of the Silversea deal.

 

Fain said being part of a larger company would lead to synergies for Silversea in areas such as procurement, marine management and port operations.

 

He added Silversea would be “maintaining the integrity and identity of its strong brand”.

 

“Our objective is to be the best player in each of our markets where we operate,” said Fain. “This adds one segment that we had not been a material player in.”

 

RCCL said it would be working in partnership with Silversea chairman Manfredi Lefebvre d’Ovidio on the brand’s development following the completion of the acquisition.

 

Lefebvre d’Ovidio said the announcement of the deal was a “very proud and happy day” for Silversea.

 

“Only Richard [Fain] and Royal Caribbean share our passion for innovation and experiential travel, and a passion for excellence,” he said. “We will put our teams together to work together.”

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