Royal Caribbean’s Michael Bayley talks Brexit, Perfect Day and overtourism with Harry Kemble
The boss of Royal Caribbean International says he would consider deploying an Icon‑class ship in Southampton only once Brexit is “figured out”.
Michael Bayley, the line’s president and chief executive, said while he sees the UK as the “cornerstone” of the business, he wants to see how Brexit “plays out” before bringing the new ship class to the UK. The first Icon-class ship is due to be delivered in the second quarter of 2022.
Speaking at a Travel Weekly Business Executive Lunch, Bayley said he hoped that “choppiness” caused by the UK leaving the EU would be fixed by 2020.
Royal Caribbean lost around $50 million in sales revenue following the Brexit vote in 2016, when the value of the pound dropped 15%.
“We have always been in the UK market and we will continue to be in the UK market,” he said.
“We see it as the cornerstone of our business.
“Our strategy has been continuation, protect, optimise and carry on the journey. That is why we announced that [Quantum‑class] Anthem of the Seas is coming to the UK in 2020.”
But he added: “This kind of uncertainty is not good for business. By the time that we have got through 2019, we will be in a far more stable environment. A lot of the choppiness will have stabilised.”
Asked what the UK market would need to do for Royal Caribbean to base a 5,000-passenger Icon-class vessel here, Bayley said: “Figure out Brexit.”
Ben Bouldin, the line’s associate vice‑president and UK managing director, said there was still high demand for “robust” cruise holidays despite Brexit.
Last year was Royal’s best-ever for UK sales.
Perfect Day
A more immediate focus for Royal Caribbean is the opening of the first of its Perfect Day private islands, in the Bahamas, in May.
It will be followed by four more Perfect Day venues over the next five years: one in Australia, two in Asia and a second in the Caribbean.
The line has spent the last three years acquiring land across the world to build its Perfect Day sites.
Bayley confirmed Greek islands had been considered but there were concerns that passengers on Mediterranean itineraries might prefer to visit popular ports of call.
He said: “The ships that operate in Europe call at a port every day and that is typically what the guests want. The destinations in Europe are so rich. Passengers want to go into [places like] Rome and Venice every day.”
Bayley revealed Perfect Day at CocoCay, the name of the island attraction in the Bahamas, had been a $250 million investment.
By 2020, Royal Caribbean expects to take two million passengers to Perfect Day locations around the world.
Overtourism
Bayley called on the cruise sector to engage with destinations which had looked to curb overtourism by taxing cruise passengers.
He said: “It is a concern. There has to be dialogue between the different communities.
“Sometimes these decisions are made outside the cruise industry – the attitude is ‘the ship floats, go somewhere else’.”
Bayley issued a warning to destinations weighing up whether to introduce a passenger tax.
He cited the example of Alaska, which suffered after lines including Royal Caribbean, Norwegian Cruise Line and Regent Seven Seas Cruises reduced capacity in the US state after a head tax was introduced.
“At some point you can tax too much, as Alaska did years ago,” he said. “We tried to absorb the taxes, but we couldn’t – so we started to move capacity out of Alaska. All of a sudden the [Alaska] community asked ‘what happened?’”
Bayley’s colleague Gavin Smith, Royal’s senior vice-president of international, admitted cruise lines were seen as “an easy target” by authorities despite typically accounting for small percentages of overall visitor numbers.
Smith picked out MSC Cruises and Costa Cruises for the way the lines were working with Dubrovnik’s authorities to stagger arrival times and shore excursions.
“There are discussions going on all over Europe and we, as the biggest operator, are at the forefront of them,” he added.
Royal Caribbean has invested in ports around the world to ease overtourism concerns.
Bayley said: “We build our own infrastructure at ports that are important to us. We have our own operations in New York, and we are soon to be announcing something in Barcelona.”
In December, Royal Caribbean revealed plans to build a $100 million cruise terminal in Galveston, Texas.
A consortium comprising Royal Caribbean, Carnival Cruise Line, NCL and Disney Cruise Line submitted a bid to the Bahamas government to redevelop the Port of Nassau. Bayley said: “Nassau needs some development. We are in the bidding process and will find out by February.”
Trade rapport
Royal Caribbean scooped the Best Trade-Friendly Brand award at Travel Weekly’s 2019 Globe Travel Awards last month. The line promptly decided to thank agents by hiking commission by three percentage points for 13 days.
Shortly before, Bayley had said: “We understand that our relationship with travel agents is a primary reason for our success as a cruise line. We are very loyal to our trade partners and we have never wavered from that philosophy in our 50-year history.”
Bayley stressed that all Royal Caribbean’s distribution channels should be “fully optimised and as efficient as possible”.
