A Conversation with
Richard D. Fain

Entering the last year of Double-Double, it appears your targets are within sight. What do you feel has been the greatest impact of this program?

Most people don’t realize that the Double-Double was not initially created for public consumption. This program was created to give our organization a defined, common set of goals around which we could all rally and drive the business to new heights.

Every one of our 66,000+ employees can tell you what the Double-Double is, and they think about how their role contributes to the program’s targets.

So, while we have already reached significant milestones in our performance, I believe the greatest impact of the program has been the ability to create a mindset across our entire base of employees that supports their passion to reach aggressive revenue goals and encourage discipline to invest their funds wisely.

You mention reaching milestones as well as a view of the future. Can you provide more color around these areas?

I’d be happy to. I have always found that what gets measured gets better. I like when we have clear markers of real progress, and we have made meaningful achievements in recent years. Since 2012, we have generated 3 times the Adjusted EPS, delivered 4 consecutive years of double-digit Adjusted earnings growth, grown the dividend by 5 times and exceeded $6 in Adjusted EPS. These milestones are markers of the upward trajectory of our business. This trajectory has been quite steep. Some may believe we have reached a peak, but we know better.

Our organization is fully focused on revenues, costs and investments. This mindset will not change.

We also have visibility into our pipeline of newbuilds. Our new ships have been met with phenomenal demand and have delivered returns on par with or better than our lofty expectations. Our onboard revenue teams are skilled in anticipating changing trends. They continue to find new ways to serve up experiences and products that have great appeal to our guests. The result has been better onboard revenue yields every quarter. With exciting new ship features, enhancements to the existing fleet and creativity from our onboard team we fully expect to continue seeing progress on the yield front.

You’re not kidding about those newbuilds, each one has delivered a new level of WOW to the market it has entered. What would you say are the most important elements driving the success of these ships?

First, and always, is the crew. Those women and men focus their entire effort towards giving their guests an unforgettable vacation experience. I never get tired of hearing from guests that the bartender at the Martini Bar on Solstice remembers their favorite drink or that the Maître D’ on Oasis always seats them at their favorite table.

Our crew always wants to exceed our guests’ expectations and they deliver on that.

In addition to the crew, we’ve put a lot of thought into the design of these ships and ensuring that the money invested will materialize in the form of higher ticket and onboard yields. Providing the best WOW features and amenities helps drive that. From the mix of staterooms to the retail areas to fine dining venues, we are determined to create the most exciting yield-maximizing asset on land or sea.

Technology seems to be an area in which the industry is also placing more focus. Can you give us an update on RCL’s advances and view into the future as it relates to technology for cruise?

We started the technology journey several years ago and a key milestone was the introduction of the WOW bands two years ago. It represented a big leap in improving the guest experience by leveraging technological advances.

The greatest value we can get from technology is to give our guests an experience that is better and easier.

I am pleased to see that the entire industry is moving in this direction and that others in our industry have announced similar products this year. We have already put a great deal of thought and effort into a new digital experience that will be app based and intuitive. This new tool will give the guest an even better experience that will allow them to get more out of their cruise vacation and contribute to yields. What is most exciting is how scalable this technology will be, with 15% to 20% of our own ships benefitting from the enhancement this year, and by next year over half of our ships should be equipped.

Another area where advances have been made at a fast clip is sustainability. Last year at this time, you had just launched your partnership with World Wildlife Fund (WWF). By summertime you had already published long-term goals you developed in partnership with WWF. Can you please tell us more about these goals and where you see your strategy going?

Our environmental stewardship strategy is one I'm particularly proud of. We believe that what you measure gets better, and so continuous improvement drives our strategy – from long-running programs such as Save the Waves, to current initiatives like Advanced Emissions Purification systems and our Zero Landfill program, and onward to initiatives such as Liquid Natural Gas and fuel cell technology.

But you mentioned WWF, which is a transformational partnership that is taking our sustainability performance and commitment to the next level.

Together we have announced goals related to greenhouse gas emissions, sustainable sourcing and destination stewardship.

These goals are specific, tangible and impactful. Our partnership with WWF helps us find the right ways to do better and impose a useful discipline on both of us to enhance these goals.

We’ve covered quite an array of topics, but there is one last area that we would be remiss if we didn’t discuss. With so much focus on operational performance, many times we don’t talk enough about the values and culture of a company. Could you comment on the position at Royal Caribbean?

I’m a believer in the adage that a company should not only do well, it should also do good.

A company’s success often reflects the culture of its people and I am proud of the strong values and commitment of the men and women of Royal Caribbean who work so hard every day.

That culture is very important to our success and we were honored to have it recognized by the Ethisphere Institute who named us as one of the 2017 World’s Most Ethical Companies. Strong ethical foundations are a cornerstone of our company and help us attract the best people to provide the best vacations.

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