Royal Caribbean, Norwegian and the Luxury Cruise Market

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I would love to hear how you think the mass market is similar to and different from luxury, having seen them both up close. I think a lot of investors say, "Oh, it's a cruise. You're getting on a ship. It's the same experience, same kind of customers." But that's not true anymore. I feel like mass market products like Icon of the Seas offer a completely different experience compared to Viking or Seabourn. It's a completely different experience. I would love to hear how you describe the big differences in how the experience is delivered, the customer base, and things like that.

There is an enormous opportunity in the cruise industry. We know factually that if people go on a cruise, they have a return rate well above 90%. That's amazing. It's a vacation that is hard to get people to try if they have reluctance, which most do. However, the tide has been slowly turning over the last 20 years.

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That's for an itinerary? Like a seven-day or ten-day trip?

It's harder to make money at that 350 range unless you can get the per diems up to 30,000. However, it's tough to sell a cruise at 30,000 to 40,000 if you have a six-star experience for 15,000.

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Yes.

The last estimate I read was the cruise market just in the US is in the $16 to $20 billion range. That's just US sales, not even global sales. So to me, I think the sky is the limit. The industry's biggest challenge is just getting people on board. I have a horrible analogy. Right when I got into the business, I used a drug analogy that all they need is one hit of crack.

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