Royal Caribbean shares its plan to keep passengers happy

When you sail on the larger ships Carnival and Royal Caribbean offer out of various Florida ports, you're generally choosing the ship over its destinations. It's not that you can't have fun in Nassau, Cozumel, Roatan, Freeport, St. Maarten, and the other Caribbean stops those ships make, but they're not the most exotic locations. 

Both cruise lines, however, have made many of the ships sailing out of Port Canaveral, Fort Lauderdale, and Miami destinations in themselves. Royal Caribbean has the biggest cruise ship in the world, Icon of the Seas, sailing the Caribbean out of Miami, and its next Oasis-class ship, Utopia of the Seas will kick off its first season sailing 3-4 day itineraries out of Port Canaveral.

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Itineraries for many of Royal Caribbean's ships including Icon, Utopia, and another Oasis-class ship, Allure of the Seas, all stop at the cruise line's private island, Perfect Day at CocoCay.

CocoCay is not a traditional just a beach with food and drinks private island. It's more a resort destination with a huge no-extra-charge pool along with an added-fee Beach Club and a separate extra-cost adults-only area, both of which have their own pools. 

Perfect Day has been a big enough success for Royal Caribbean that the cruise line plans to "Beach Club" private experiences, one in Nassau and the other in Cozumel. In addition, Disney, Carnival, Norwegian, and MSC Cruises all have plans to either build new private destinations or improve their existing ones.

Royal Caribbean gives the people what they want  

Royal Caribbean understands its customers. The brand's CEO Michael Bayley explained its strategy during the company's first-quarter earnings call. 

"When we think of the Beach Club portfolio that we're planning on developing, along with Perfect Day, they're incredibly complementary destination experiences and they fit really in the sweet spot of our demographics and really in terms of what our guests are seeking, looking for when they go on a Caribbean cruise, they really knock it out of the park in terms of satisfying that demand, that need. So, very similar type of product, different vibe," he said.

The company's private island offers a slightly different experience compared to what the upcoming Beach Clubs will offer.

"Perfect Day is the full day for thrill and chill and the Beach Club is, as you imagine, just an incredible day at the beach, which is what most guests are seeking in the Caribbean. And it's curated by Royal Caribbean. It's a stunning experience. And of course, it's very authentically connected to the culture, for example, in the Bahamas or Mexico," he added.

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And it really is a huge demand driver. When we look at the demand that we've seen for Perfect Day, this year we'll take 3.2 million guests to Perfect Day. Last year it was 2.6 million. And it really is a demand driver.

Private islands drive demand

The success of Coco Cay almost certainly factored into Carnival building Celebration Key in Grand Bahama and Disney working on Lookout Cay at Lighthouse Point, its new Bahamas destination.

Bayley made it clear that Royal Caribbean's customers are fueling the investment in private destinations.

"People want to sail on the ships that go to Perfect Day and they want to sail on the ships that go to the Beach Club. And I think it's proven to be incredibly successful. When you wrap that up with the kind of hardware we've introduced, for example, Icon, which has been an unbelievable success. I mean, beyond our wildest dreams success," he shared.

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Bayley believes that success is repeatable.

"And you add on Utopia, which is a brand new Oasis-class ship, which was going straight into the short product market out of Port Canaveral. The demand we've seen for, for example, Utopia sailing to Perfect Day has been extraordinary. So we think we've got the formula figured out. And our plan is to continue to evolve and develop that formula over the coming years," he added.