Royal Caribbean has been continuously raising the bar when it comes to building bigger ships.
It changed the industry when it introduced Oasis of the Seas, the first Oasis-Class ship, in 2009. That was the world's biggest cruise ship at the time, a title claimed by each member of the class until 2024 when Royal Caribbean introduced Icon of the Seas, the first Icon-Class ship.
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Utopia of the Seas, which began sailing in July, did not take that title back, but it's still a megaship. Royal Caribbean has also said that Star of the Seas, the second Icon-Class ship, won't claim the "largest cruise ship in the world" title either.
The cruise line has also shared plans for a seventh Oasis-Class ship, to be delivered in 2028, and has Star of the Seas coming in 2025 as well as an unnamed third Icon-Class ship set for 2026. It has also ordered a fourth Icon-Class ship for a 2027 delivery and has signed an option to order two more.
Long-range planning is key for Royal Caribbean and CEO Jason Liberty explained why during his company's second-quarter earnings call.
"In the cruise ship business or in the cruise business, you're always thinking longer term; you're not just thinking longer term in terms of growth and orders, but also your environmental footprint and what we can be doing to further reduce our emissions and the fuel that we burn, et cetera," he said.
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He noted that the company must plan ahead because designing and building ships takes a long time.
"So, this is a longer-term business, and designs of ships like Icon, which you heard us talk about for seven years in the making. So, this just doesn't happen a couple of years out. I think we feel very confident about our path of growth, and we feel very confident in our ability to take on those orders in a very disciplined way," he added.
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Image source: Royal Caribbean.
Royal Caribbean plans smaller ships
Liberty and Royal Caribbean International CEO Michael Bayley have often hinted at plans for a new smaller class of ships. They have even shared that the working title for those ships is the Discovery Class.
Size is one of the factors that go into planning, but Liberty shared some broader thoughts on the topic.
"We're always going through and, look, we're always designing the next classes of ships really for all of our brands," he said. "We specifically pick segments and brands in those segments and deployments and experiences that we believe have a very long runway to generate demand globally as each of our brands are globally sourced business."
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Smaller ships for Royal Caribbean have been something the company has been considering for a very specific reason.
"And of course, the other thing I think that's important when you think about ship classes, whether they could be small, they could be larger, is kind of also a consideration that we also have ships that are reaching 30, 35 years," he added.
"And so some of this is not just about we want to build same-size ships, smaller ships. It's also replacing ships that will eventually kind of reach their end of life."
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Royal Caribbean wants to serve the globe
While Royal Caribbean has followed a bigger-is-better strategy in recent years, that's going to change. Some of the thought behind the Discovery Class is being driven by need.
If the cruise line has to retire some of its older ships, it needs a replacement for them or it won't be able to visit certain ports.
"We're looking potentially at smaller ships that will probably replace some of those older ships," Liberty said. "It's a little bit less about the sourcing market. It's more about where those ships can go. It's getting them into maybe some of the more unique and bespoke destinations and further diversifying our footprint around the world."
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Some ports lack docks for larger ships. In addition, certain locations can handle only so many tourists in a day.
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"We go to about 1,000 different destinations today and we keep more and more trying to spread out where our guests go, and the size of the ship can sometimes matter," he added. "And I think our brands are always designing to how do we have the most flexible platform to deliver the experiences in which our guests are looking to go on."
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