Travel Agent - August 4, 2008 - (Page 68)

NEWS IMPACT Higher Fuel Prices the Culprit for Royal Caribbean Downsizing UNTIL NOW, CRUISE LINES HAVE DEALT WITH ESCALATING FUEL PRICES BY PASSING THE BUCK TO CONSUMERS IN THE FORM OF FUEL SURCHARGES. Royal Caribbean Cruises Ltd. (www.royalcaribbean.com) has implemented a new tack: Buck staff. The cruise line has eliminated 400 shoreside jobs as part of a cost-cutting measure to save $125 million a year. “Too much of our profitability is being eroded by the increase in fuel prices,” said Richard Fain, chairman and CEO of Royal Caribbean Cruises Ltd., during the company’s second-quarter earnings call at the end of July. “This is unacceptable, and we are evaluating everything we do to find ways to do it more efficiently and effectively. While our brands continue to attract premium prices, even in this difficult environment, it is imperative that we find ways to reduce our costs.” David Eisen ABOVE: Chairman and CEO of Royal Caribbean Cruises Ltd., Richard Fain, is implementing several cost-cutting measures in response to the increase in fuel prices Other Cost-Cutting Measures In addition to cutting shoreside employees, Royal Caribbean is also discontinuing other nonessential operations, such as the Scholar Ship, an educational partnership aimed at college students studying aboard cruise ships. “This is a difficult period for virtually all businesses,” Fain said, “but we are determined to improve our operating results through tight cost controls, while preserving our outstanding guest experience and continuing to strongly support our travel agent partners. We will also continue to make measured strategic investments, especially in growing the international operations of our business.” Breaking It Down An analyst told shipping authority Lloyd’s List that Royal Caribbean has an overall higher cost profile than other cruise companies. He added that some cruise lines were reprising some of their post9/11 strategies to offset higher costs. The unnamed analyst told Lloyd’s List that Royal Caribbean had never been the lowestcost operator due to its highly corporate structure. He compared it to Carnival, which has a more CONNECTING YOU For more information on the cruise industry, visit www.travelagentcentral. com/cruises decentralized structure, wherein each brand basically functions alone from its corporate parent. In Royal Caribbean’s case, its overhead is higher than other companies, the analyst told Lloyd’s List. It wasn’t all that bad. Royal Caribbean did make a secondquarter profit, netting $84.7 million. On the other hand, last year’s second-quarter profit was $128.7 million. Despite the drop, Royal Caribbean, other cruise lines and CLIA repeatedly insist that the cruising environment is still sound. “Although pressure on the consumer persists and there is much uncertainty in the market, demand for our cruises and onboard spending continues to be resilient,” said Brian Rice, Royal Caribbean’s executive vice president and CFO. “Our yields should improve in all four quarters this year.” Long term, Royal Caribbean said it still will look to grow its international business. “Over the last few years, we have made significant investments to seed our growth in many strategic markets,” said Rice. “These costs are now being absorbed by capacity and revenue growth in the emerging markets around the world. In addition, our scale and exceptional brand positioning in North America are enabling us to drive further efficiencies.” Skyrocketing oil prices and an enervating economy notwithstanding, Fain said that business is still faring better than expected. “We continue to watch with concern both the high oil price and the weakening economy,” he said. “While we can’t solve high oil prices, we are gratified that, except for the oil price, our business continues to do as well or better than expected despite the economy. One might have assumed that we would have been impacted by both, but the fact that our business continues to overcome these economic pressures says volumes about its resilience.” — DAVID EISEN 68 | TravelAgent August 4, 2008 http://www.royalcaribbean.com http://www.travelagentcentral.com/cruises http://www.travelagentcentral.com/cruises

Table of Contents Feed for the Digital Edition of Travel Agent - August 4, 2008

Travel Agent - August 4, 2008 Online Now Contents From the Editor Africa Europe Pacific/Asia Hawaii Las Vegas Australia Alaska Central & South America Adventures by Disney comes to Costa Rica Caribbean Cruises Cover Story: Have Food? Will Travel Air Consolidators Hotels Tours Gay & Lesbian Travel Agent Profile Bidding for Business Agenda Caribbean Update India Attacting More U.S. Travelers Fuel Prices Cost Royal Caribbean Jobs ASTA Celebrates Victory Over Airlines Agent Access Classified Marketplace In the Spotlight Editorial Index Advertising Index Trendwatch

Travel Agent - August 4, 2008

Travel Agent - August 4, 2008 - (Page Coverwrap1) Travel Agent - August 4, 2008 - (Page Coverwrap2) Travel Agent - August 4, 2008 - Travel Agent - August 4, 2008 (Page Cover1) Travel Agent - August 4, 2008 - Travel Agent - August 4, 2008 (Page Cover2) Travel Agent - August 4, 2008 - Travel Agent - August 4, 2008 (Page 1) Travel Agent - August 4, 2008 - Online Now (Page 2) Travel Agent - August 4, 2008 - Online Now (Page 3) Travel Agent - August 4, 2008 - Contents (Page 4) Travel Agent - August 4, 2008 - Contents (Page 5) Travel Agent - August 4, 2008 - Contents (Page 6) Travel Agent - August 4, 2008 - Contents (Page 7) Travel Agent - August 4, 2008 - From the Editor (Page 8) Travel Agent - August 4, 2008 - From the Editor (Page 9) Travel Agent - August 4, 2008 - From the Editor (Page 10) Travel Agent - August 4, 2008 - From the Editor (Page 11) Travel Agent - August 4, 2008 - From the Editor (Page 12) Travel Agent - August 4, 2008 - From the Editor (Page 13) Travel Agent - August 4, 2008 - Africa (Page 14) Travel Agent - August 4, 2008 - Africa (Page 15) Travel Agent - August 4, 2008 - Africa (Page 16) Travel Agent - August 4, 2008 - Africa (Page 17) Travel Agent - August 4, 2008 - Europe (Page 18) Travel Agent - August 4, 2008 - Europe (Page 19) Travel Agent - August 4, 2008 - Europe (Page 20) Travel Agent - August 4, 2008 - Europe (Page 21) Travel Agent - August 4, 2008 - Europe (Page 22) Travel Agent - August 4, 2008 - Europe (Page 23) Travel Agent - August 4, 2008 - Pacific/Asia (Page 24) Travel Agent - August 4, 2008 - Pacific/Asia (Page 25) Travel Agent - August 4, 2008 - Pacific/Asia (Page 26) Travel Agent - August 4, 2008 - Pacific/Asia (Page 27) Travel Agent - August 4, 2008 - Hawaii (Page 28) Travel Agent - August 4, 2008 - Hawaii (Page 29) Travel Agent - August 4, 2008 - Hawaii (Page 30) Travel Agent - August 4, 2008 - Hawaii (Page 31) Travel Agent - August 4, 2008 - Las Vegas (Page 32) Travel Agent - August 4, 2008 - Las Vegas (Page 33) Travel Agent - August 4, 2008 - Las Vegas (Page 34) Travel Agent - August 4, 2008 - Las Vegas (Page 35) Travel Agent - August 4, 2008 - Australia (Page 36) Travel Agent - August 4, 2008 - Australia (Page 37) Travel Agent - August 4, 2008 - Alaska (Page 38) Travel Agent - August 4, 2008 - Alaska (Page 39) Travel Agent - August 4, 2008 - Central & South America (Page 40) Travel Agent - August 4, 2008 - Central & South America (Page 41) Travel Agent - August 4, 2008 - Adventures by Disney comes to Costa Rica (Page 42) Travel Agent - August 4, 2008 - Adventures by Disney comes to Costa Rica (Page 43) Travel Agent - August 4, 2008 - Caribbean (Page 44) Travel Agent - August 4, 2008 - Caribbean (Page 45) Travel Agent - August 4, 2008 - Caribbean (Page 46) Travel Agent - August 4, 2008 - Caribbean (Page 47) Travel Agent - August 4, 2008 - Cruises (Page 48) Travel Agent - August 4, 2008 - Cruises (Page 49) Travel Agent - August 4, 2008 - Cover Story: Have Food? Will Travel (Page 50) Travel Agent - August 4, 2008 - Cover Story: Have Food? Will Travel (Page 51) Travel Agent - August 4, 2008 - Cover Story: Have Food? Will Travel (Page 52) Travel Agent - August 4, 2008 - Cover Story: Have Food? Will Travel (Page 53) Travel Agent - August 4, 2008 - Cover Story: Have Food? Will Travel (Page 54) Travel Agent - August 4, 2008 - Cover Story: Have Food? Will Travel (Page 55) Travel Agent - August 4, 2008 - Air Consolidators (Page 56) Travel Agent - August 4, 2008 - Hotels (Page 57) Travel Agent - August 4, 2008 - Tours (Page 58) Travel Agent - August 4, 2008 - Tours (Page 59) Travel Agent - August 4, 2008 - Gay & Lesbian Travel (Page 60) Travel Agent - August 4, 2008 - Gay & Lesbian Travel (Page 61) Travel Agent - August 4, 2008 - Agent Profile (Page 62) Travel Agent - August 4, 2008 - Agent Profile (Page 63) Travel Agent - August 4, 2008 - Bidding for Business (Page 64) Travel Agent - August 4, 2008 - Agenda (Page 65) Travel Agent - August 4, 2008 - Caribbean Update (Page 66) Travel Agent - August 4, 2008 - India Attacting More U.S. Travelers (Page 67) Travel Agent - August 4, 2008 - Fuel Prices Cost Royal Caribbean Jobs (Page 68) Travel Agent - August 4, 2008 - ASTA Celebrates Victory Over Airlines (Page 69) Travel Agent - August 4, 2008 - ASTA Celebrates Victory Over Airlines (Page 70) Travel Agent - August 4, 2008 - Agent Access (Page 71) Travel Agent - August 4, 2008 - Agent Access (Page 72) Travel Agent - August 4, 2008 - Agent Access (Page 73) Travel Agent - August 4, 2008 - Agent Access (Page 74) Travel Agent - August 4, 2008 - Agent Access (Page 75) Travel Agent - August 4, 2008 - Agent Access (Page 76) Travel Agent - August 4, 2008 - Classified Marketplace (Page 77) Travel Agent - August 4, 2008 - In the Spotlight (Page 78) Travel Agent - August 4, 2008 - In the Spotlight (Page 79) Travel Agent - August 4, 2008 - Editorial Index (Page 80) Travel Agent - August 4, 2008 - Editorial Index (Page Cover3) Travel Agent - August 4, 2008 - Editorial Index (Page Cover4) Travel Agent - August 4, 2008 - Editorial Index (Page Coverwrap3) Travel Agent - August 4, 2008 - Editorial Index (Page Coverwrap4) 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