A frequently asked question:  Will Royal Caribbean ever construct smaller ships?  A few considerations:

First even like the average cruise vessel size increases through time it is in our favour to have a balanced and flexible fleet profile.  There are both physical parameters (e.g. Panama Canal) and market parameters (e.g. starting up in Dubai) that dictate a mingle of smaller ships as well as Oasis-class ships.  We are very fortunate to have the 1800 guest Legend of the Seas and Splendour of the Seas in our fleet to spearhead our global expansion.

Second we are capable to utilize larger ships on routes that we would not have believed possible even ten years ago.  The fact that we will have a Freedom-class ship and three Voyager-class ships in Europe in 2010 is remarkable in comparison to our thinking in the late 1990’s that we would have a maximum of one or two Voyager-class ships and they would often be Caribbean-based.  Now our view is we will use any of our ships anywhere in the world where it makes economic and logistical sense.

Third the preference of the plain majority of our guests for more features and options is clear.  There is simply more inquire for larger ships than for smaller ships.  This is especially correct of families except applies to couples and singles as well.  I understand from personal interaction with cruisers that many don’t admit this to be true.  But this is our experience in our call centers and through our automated reservations every day.

Fourth while economies of scale are not the controlling variable in the cruise equation there are scale benefits that contribute to our brand’s preference for larger ships.  The simplest example: whether the ship holds 1000 or 3000 guests it has one Captain.

Fifth there is an undeniable nostalgia amongst some cruisers for ships under 1000 guests that supply an extraordinarily high level of customer service.  Although the Royal Caribbean trademark is not going to encompass such ships in the future our corporation certainly does in the present with our two 700 guest ships in Azamara Cruises not to mention the 100 guest Celebrity Xpedition.  Our company along its six brands has a significantly more diverse fleet profile than the Royal Caribbean International brand has on its own and this will continue to be the case.

So will Royal Caribbean ever build small ships?  It is unlikely for the brand Royal Caribbean International.  But not out of the question for the 97company Royal Caribbean Cruises Ltd. through one of our other brands.