Talk about smooth sailing. Royal Caribbean Cruises announced on Tuesday that Chief Financial Officer Luis Leon will retire, and that executive vice president Brian Rice will succeed him as finance chief. Rice is only the fourth CFO in Royal Caribbean’s 35-year history, underscoring the inherent stability at the growing cruise company.
Interestingly, in describing Rice’s credentials for his new job, the company singles out his “extensive background” in financial operations and what it calls revenue-performance management. “He is widely recognized as a leader in revenue management, having overseen the conceptual development and implementation of the company’s highly regarded revenue-management systems and procedures,” the company notes in a press release. “He also designed many of the company’s financial-management models, and led numerous operational and financial initiatives.”
Much like the airline and hotel sectors, maximizing per-customer revenue is critical to the cruise industry, as assets perish on specific dates. As a result, in the cruise line industry, it is not uncommon for a large number of people to pay widely varying prices for the same cabin on the same sailing, depending upon when they booked their reservation, how they booked it (phone or online), who took the reservation (the cruise line or an agent, or a third-party website), as well as their age and the state they live in.
In recent years, cruise lines have also increasingly focused on generating additional revenues from passengers once they are a captive audience on the ship, offering premium-priced optional restaurants, expensive spas, and traditional fare like bingo, in which game prices have surged during the past few years.
On Tuesday, Royal Caribbean also said it received antitrust approvals from Spain and Portugal on its planned purchase of Madrid-based cruise and tour operator Pullmantur S.A. The company also unveiled its Celebrity Expeditions, an extension of its Celebrity Cruises brand. Royal Caribbean said with the completion of the acquisitions, it plans to formalize a small ship, destination-driven offering new to the Celebrity brand.