CompanyGraph
Royal Caribbean Group
RCL · NYSE Arca · United States
Fills cruise ships with paying passengers and captures their spending at sea and at company-owned island destinations.
Royal Caribbean fills its ships by locking in a fixed sequence of port calls weeks in advance, because every harbor from Cozumel to Barcelona has a hard limit on how many large-hulled ships can dock in a day and those slots have to be reserved through agreements with local port authorities. When a voyage includes Perfect Day at CocoCay, the company owns the berth outright, so the money passengers spend on food, drinks, and excursions that day flows back to Royal Caribbean rather than to local operators — which is impossible at every other stop on the itinerary. Building more ships extends that model only up to a point, because each new vessel eventually needs a port call, and physical harbor geometry cannot be solved with capital spending the way a factory bottleneck can. The whole private-island advantage disappears if a hurricane destroys CocoCay, because unlike a closed third-party port, there is no other company-owned island to reroute the ship to while repairs are underway.
How does this company make money?
The company charges passengers a per-person, per-night rate for their cabin, collected in advance when they book. Once on board, passengers use a cruise card to pay for specialty dining, drinks, and shore excursions, and each of those transactions adds to the total. When a ship docks at Perfect Day at CocoCay, the fees passengers pay for food, beverages, and activities there flow back to the company rather than to a local port economy.
What makes this company hard to replace?
Passengers who have already booked lose their non-refundable deposits if they cancel, and during busy seasons the equivalent cabin category on a competing ship is often already sold out. On the company side, berth contracts with home port terminals and long-term lease agreements at homeports run for multiple years and cannot simply be handed to a different cruise line.
What limits this company?
The harbors at places like Cozumel and Santorini can only fit so many large ships per day, and no amount of money can change that — the physical shape of the harbor and the port authority's scheduling set a hard ceiling. So when the company adds more ships, those extra ships have to compete for the same fixed number of third-party berth slots. That pushes them away from the company-owned island model and back into ports where passenger spending goes to someone else.
What does this company depend on?
The company cannot operate without deep-water berth access at third-party ports like Nassau, Cozumel, and Barcelona. Ships need a constant supply of marine gas oil and bunker fuel to move. Every vessel requires valid U.S. Coast Guard safety certificates and flag state inspection approvals to sail with passengers. Satellite communication networks keep onboard internet and navigation running. Fresh water production systems and waste treatment facilities must meet MARPOL discharge standards or ships are barred from port.
Who depends on this company?
Local tour operators and shop owners in Nassau, Cozumel, and St. Thomas rely heavily on the spending of cruise passengers — if ships stopped calling, that income would largely disappear. Airports in Miami-Dade and Broward County process thousands of passengers on turnaround days, and flight delays there directly strand guests trying to board or disembark. Onboard concessionaires running specialty restaurants and retail outlets have no revenue stream of their own — they depend entirely on a steady flow of passengers walking through the ship each week.
How does this company scale?
The company can add ships and copy the same onboard operating model — standardized crew training, the same cabin layout, the same dining and retail setup — across new itineraries without reinventing anything. What it cannot scale easily is where those ships go: each new vessel takes two to three years to build, costs over a billion dollars, and then still has to compete for berth slots at ports that physically cannot add more capacity.
What external forces can significantly affect this company?
CDC health rules and international maritime health regulations can force the company to stop sailing or cut the number of passengers per ship, as happened during the pandemic. Hurricane season in the Caribbean and Mediterranean arrives every year during peak booking months and can cancel itineraries with little warning. Changes to visa rules or geopolitical events can close specific ports entirely — Russian ports became unavailable after 2022 — forcing last-minute itinerary changes the company cannot always absorb cleanly.
Where is this company structurally vulnerable?
A hurricane hitting CocoCay or the Royal Beach Club properties directly would destroy the island infrastructure and knock out both the private dock and all the destination-day revenue at once. Unlike losing a third-party port, there is no other company-owned island to send the ship to instead. The private-island revenue leg would go dark until the physical rebuild is finished.