As the second largest cruise ship operator, Royal Caribbean has over 40 ships, travels over 480 destinations on all seven continents. Revenues have reached $8 billion. The company continues to strive for success and continue to improve year after year. Through improving strengths, minimizing weaknesses, expanding on opportunities, and protection from threats, Royal Caribbean has the opportunity to surpass its main competitor Carnival. Royal Caribbean carries a strong market position with high brand recognition that helps keep them on top with its competitors. Since this cruise ship company is the 2nd largest, they have significant power in the marketplace. It has many subsidiaries that are specifically targeted for Europe, and has a new joint …show more content…
First of all, the limited access to port cities puts a strong limitation on improving the itinerary available for people to have. The other option of flying or driving opens up more opportunities than going with a cruise ship. A cruise ship takes a long time to travel large distances, and can only deliver passengers to port cities for short periods of time. This is good for passengers that want to travel in a city for a quick amount of time as opposed to travelers that want to explore a city fully. Moreover, the dependency and volatility of costly fuel is always going to be a problem for Royal Caribbean whose fuel costs are dependent on market prices. Royal Caribbean has fuel hedges to help reduce volatility of the market, but unexpected movements like the decrease in price of crude oil can negatively impact the fuel costs. The fuel price fluctuates everyday so having a fuel hedge lets the company buy at a fixed cost to help lower the price of fuel. Lastly, the industry weakness of cruise lines itself can be negative for Royal Caribbean. Cruise lines mainly target the middle and upper class markets, which leaves off lower income consumers who do not have all the funds to vacation in a luxury style vacation. Mainly, with cruise lines being a seasonable industry, the prices fluctuate between seasons and the most desired dates. But, the most desired dates in the summer or winter tend to be more expensive than the offseason, which greatly affects the demand and supply of