Royal Caribbean makes a $1 billion bet on luxury cruises


The deal by Royal Caribbean Cruises to take a majority stake in Silversea Cruises allows the company to enter the luxury and expedition space, Royal Caribbean’s chairman and CEO, Richard Fain, told CNBC.

“It’s really a growth opportunity. It’s a part of the market that we haven’t really been addressing,” Fain said Thursday on “Power Lunch.”

“We had this one gap in the ultra-luxury and expedition area,” he said. “We really needed to fill in that space.”

On Thursday, Royal Caribbean announced it was purchasing a controlling stake — nearly 67 percent — in Silversea Cruises, a private company, for $1 billion. Silversea sails to all seven continents, including locales such as the Galapagos Islands, Antarctica and Russia’s Far East. The cost of a cruise on Silversea can be well over $10,000.

The deal helps heighten the more affordable Royal Caribbean’s presence in the ultra-luxury space and makes it easier for it to compete with rivals like Carnival Cruise Lines and Norwegian Cruise Line.

Fain said short term the acquisition won’t have a big impact on business.

“But longer term — and we’re a long-term business — this is where we ought to be,” he said.

Royal Caribbean’s stock was up more than 5 percent late afternoon Thursday.

The deal is expected to close later this year.

Source link

Products You May Like

Articles You May Like

Seven comeback stocks that investors could pounce on: Cramer
China trade dispute drags on; Trump still ‘playing with the bank’s money’
Trump’s latest tough trade action could hit already struggling chip stocks
3M troubles will continue, may cut dividend
IBM CEO on US-China trade war, tariffs

Leave a Reply

Your email address will not be published. Required fields are marked *