By Mark

Royal Caribbean Cruises is to acquire a 66.7 per cent stake in ultra-luxury cruise line Silversea.

Richard Fain, chairman and CEO of Royal Caribbean Cruises, said: “Silversea is a crown jewel, and the acknowledged leader in luxury and expedition cruising, two key markets that are poised for growth.

“Uniting our two companies presents an extraordinary opportunity to expand vacation options for guests and create revenue in strategic growth areas.

“We are proud to welcome aboard Manfredi Lefebvre, a visionary leader whose high standards and history of innvoation we deeply respect.”

Royal Caribbean currently consists of three brands – Royal Caribbean International, and Azamara Club Cruises. The company also has a major stake in Spanish line Pullmantur as well as Tui Cruises, which focuses on the German-speaking market.

Silversea currently has a fleet of nine ships: six in its classic fleet and three in its Silversea Expeditions fleet. There are two ships currently on order.

Manfredi Lefebvre, the chairman of Silversea, added: This partnership will bolster the growth of this exceptional brand founded by my father.

“I have always been kindred spirits with Richard and we share a vision of offering excellence and leadership to our guests.”

Silversea in $1bn sale

Royal Caribbean paid $1 billion for its controlling stake in Silversea. The deal is expected to be finalised later this year.

The acquisition is being seen as a strategic purchase by Royal Caribbean, which does not have ultra-luxury or expedition capabilities in its existing fleet.

Speaking to ABTA Magazine (below), Tom, associate vice president & managing director of Royal Caribbean International said: “What Silversea can see is our undoubted ability in leadership and innovation around ship design. I’m sure our performance would give them confidence that the Silversea brand is in safe hands.”

Commenting on the deal (right) Peter Shanks, UK managing director of Silversea, said: “While it is business as usual, it adds so much excitement, vigour and potential growth to a business that already had announced two more ships and has an option for a third. Our ambition was already there to see. Now, with the backing of Royal Caribbean, it gets really exciting.”

Speaking about whether there was a risk of cannibalisation between Silversea and Azamara, Shanks added. “No, we’re all so different. We’re all in completely different market sectors. That’s what’s so cool about the partnership. It focuses four brands which are all leaders in their own markets.” ABTAmag.com

Peter Shanks Managing director Silversea Cruises

What will this mean going forward?

From a Royal Caribbean perspective it adds a fourth market leading brand and leadership in one of the fastest growing sectors. From a Silversea perspective, it gives us incredible backing.

Will growth continue?

I imagine our growth will increase. It was already exciting at Silversea with what we had planned, but to have the backing of such an impressive and innovative organisation like Royal is great. Royal describe us as the jewel in their crown – that really sums up their partnership.

What will this mean for travel agents?

We have the strongest sales team in the ultra-luxury sector by some distance and therefore we complement the strong support that Royal and Celebrity give to their agent partners. For agents, we’ve really stressed that it’s business as usual.

Tom Associate vice president & MD of Royal Caribbean

What will Silversea add to the Royal family?

We’ve got three brands which all have their niche in the market place. Azamara, to me, is luxury but it’s not luxury in the same way that Silversea is. What we’ve acquired is a six-star, ultra-luxury line. They’ve got nine ships with two on order. It’s a popular sector at the moment and it gives us the potential to tap into some of that growth.

Structurally, how will things change?

Manfredi Lefebvre is going to join our senior team to provide strategic guidance for the brand. I see no inclination or signs that the Royal Caribbean business will do anything other than support the direction Silversea is going in.

Is there no chance of cannibalisation between Azamara and Silversea?

My parents have actually sailed on both and they don’t see them as competing. Azamara is relaxed and more like a country hotel; Silversea is more attentive and luxurious. The company as a whole must be pretty confident that they will play out in different spaces. There’s enough space for all the brands to operate in their markets.