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

Trump 2020 working with ex-Cambridge Analytica staffers
Kroger, on a ‘wild ride’ in the last year, reports earnings this week
Maxed out your 401(k) plan? Here’s another way to save
Wealth of millionaires surges 10.6% to top $70 trillion for the first time
‘Market fragility’ could be ahead in the second half of 2018

Leave a Reply

Your email address will not be published.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