The American cruise provider Royal Caribbean acquired a 66.7% stake in Monaco-based cruise company Silversea for $1B — challenging the industry leader, Carnival, for cruising’s crown.
Vacationers’ continued love of buffets, beaded cornrows, and Señor Frog’s shirts have tripled Royal Caribbean shares over the last 5 years, giving the company enough cash for the big buy.
The cruise industry is sailing full steam ahead
If you thought nobody went on cruises anymore, think again: Cruise passengers increased from 7m in 2000 to 25m+ in 2017, and over the next decade, the 5 largest cruise lines plan to expand carrying capacity as much as 114%.
Now, to sail to the front of the fleet, Royal Caribbean is tapping Silversea’s ‘ultra-luxury’ user base.
Silversea will put the ‘Royal’ in Caribbean
Silversea’s 9 ships carry a maximum of 600 passengers — many of Royal’s 50 ships, in contrast, carry 5k+. But while Royal Caribbean price tags max out at about $3k — Silversea offers a $240k, 140-day ‘World Cruise.’
In other words, Royal Caribbean may be a big fish in the cruise industry — but Silversea is caviar.
After the purchase, Royal Caribbean stock increased as much as 7% — and revised revenue forecasts from April still indicate that it’s smooth sailing ahead for Royal Caribbean.