Royal Caribbean acquires majority share in Silversea
Last week saw the Royal Caribbean holding company take a bold new step into the ultra-luxury sector following the purchase of a majority share in Silversea. The company, which owns the cruise line of the same name, Royal Caribbean, as well as Celebrity Cruises and Azamara Club Cruises, is now set to acquire a 66.7% majority share in the privately-owned line. It is thought that the total cost of the purchase price will be approximately $1 billion and Royal Caribbean has pledged to take the line in a direction that would not have previously been possible.
Silversea is a leader in terms of combining luxury with expedition cruising, taking passengers to far-flung destinations within the Arctic Circle while also providing an unprecedented level of service. The line currently operates a total of nine vessels to destinations around the world and there are more pencilled in to launch over the next few years. Since being founded in 1994, the Lefebvre family of Rome have operated the line from their headquarters in Monaco. They will remain executive chairman of Silversea after the acquisition is completed, enabling the Lefebvre family to continue its strategy in the long term.
Contrastingly, Royal Caribbean is renowned for operating some of the largest vessels in the world that are laden with an incredible range of amenities including bumper cars, water slides, ice skating rinks and much more. The holding company also owns Azamara Club Cruises, which operates itineraries with a focus on the time enjoyed in each port. Celebrity Cruises, which is also owned by Royal Caribbean, is currently the holding company’s most luxurious offering, with ships that blend sophisticated decor, increased space per passenger, and gourmet cuisine.
Upon acquiring Silversea, Royal Caribbean now has a position in the ultra-luxury sector of the cruise market. Within the ultra-luxury sector, guests can expect a more personalised level of service – sometimes, even a personal butler. Accommodation often consists of all suites, while the culinary offering is sometimes regarded as Michelin-star quality. Itineraries are much more insightful as well, with more time in port and the opportunity to travel to destinations that are considered inaccessible to larger vessels.
Following the acquisition of Silversea, Royal Caribbean’s strategic rationale for the partnership outlines the following:
- Driving long-term capacity growth in the burgeoning luxury and expedition markets at a much larger scale than what Silversea would achieve independently;
- Diversifying Royal Caribbean’s portfolio and increasing its expedition offerings by adding a premiere ultra-luxury brand;
- Leveraging the global footprint of the combined companies to generate demand and increase vacation and destination options for the guests of both companies;
- Realizing significant synergies related to global market access, supply chain, purchasing power and other economies of scale.
Royal Caribbean is one of the largest cruise companies in the world and this new acquisition and partnership will enable the line to compete on a larger scare against offerings from Norwegian Cruise Line and Carnival. Norwegian Cruise Line owns ultra-luxury line Regent Seven Seas Cruises, while Carnival owns Seabourn.
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