Royal Caribbean invites the ultra-rich aboard with $1B purchase of rival line Silversea

Royal Caribbean purchased an ultra-luxury cruise line called Silversea to compete with Carnival as the cruise industry continues to pick up speed.

June 18, 2018

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.

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