It’s commonplace in many businesses that the takeover of a small, boutique company by a larger conglomerate often rings the death-knell for the original operator, and that fans of the original business end up in mourning for a ‘lost’ star.
Therefore, devotees of Silversea Cruises may well have been more than a touch apprehensive when the giant Royal Caribbean Cruises Ltd announced plans in June to take a majority stake in the boutique, six-star line, an acquisition that was finally concluded late last month for a sum in the region of $2billion in enterprise value.
It was easy to see why Royal Caribbean – the world’s second largest cruise company after the behemoth Carnival – would want to have an ultra-luxe brand in their stable. After all, it was the one missing component in their portfolio, following the acquisition of premium line Celebrity and the creation of boutique brand Azamara Club Cruises in recent years.
Arch rivals Carnival already had Seabourn as the pinnacle of their vast cruise compendium, while Norwegian Cruise Line has sister companies Oceania and Regent Seven Seas to provide a well-rounded collection of their own.
The three individual mega-companies together control more than 80 per cent of the world’s cruise tonnage, hence seeing another independent operator going into the ‘corporate’ fold might well have be seen as extremely bad optics for the mass-market domination of the cruise industry as a whole.
Fortunately, Silversea fans can breathe easy, at least if Royal Caribbean’s history of acquisitions can be used as a guideline. Here’s why.
The Miami-based mega-corp made only cosmetic changes to Celebrity when they bought the Chandris family’s former flagship company in 1997, and Celebrity has certainly gone from strength to strength since then, expanding from a mere five-ship fleet 21 years ago to a vibrant and still-growing 12 vessels, with the all-new Celebrity Edge about to join them this autumn.
There are also a further three Edge-class vessels in the pipeline for 2020-22, while Royal Caribbean even enlarged the Celebrity sphere of influence to include an adventure-style sub-brand with the Celebrity Xpedition in 2001 and two sister ships only last year. An all-new vessel, Celebrity Flora, will expand that particular expedition assortment in 2020, too.
Their creation of Azamara in 2007 is another great example of forward thinking and brand identity, putting the pieces in place and then making industry veteran Larry Pimentel the CEO with a pretty free hand to run things in his own style, largely independent of the mother company.
Royal Caribbean has also been partly responsible for the astonishing growth of TUI Cruises in Germany, through their partnership with TUI AG, while they also revived the Pullmantur brand in Spain with a heavy dose of investment and creative thinking.
That’s why Royal Caribbean CEO Richard Fain was so bullish about the Silversea acquisition, which was concluded on July 31. He said: “We are proud to officially welcome Silversea’s industry-leading team to the RCL family. This is a dynamite combination, and we can’t wait to work with Manfredi, Roberto and the entire team as, together, we take Silversea to the next level.”
In turn, Silversea chief Manfredi Lefebvre D’Ovidio – who will remain executive chairman – insisted: “We’re excited to join the Royal Caribbean family and ready to begin this next chapter as part of an industry leader that is uniquely qualified to support Silversea’s future growth. This partnership enables us to realise our vision of being the uncontested leader in ultra-luxury cruising and expedition, taking our guests to more than 1,000 destinations aboard some of the world’s most luxurious vessels.”
The first signs of that were also laid out at the big announcement, with Project Invictus being initiated for the existing Silversea ships. This is a multi-year mission to enhance the onboard experience across the fleet as well as upgrade a number of features as each vessel goes in for its scheduled dry dock. “Our intent is to solidify our already strong leadership position with an exciting array of upgrades that thrill our guests,” Silversea CEO Roberto Martinoli explained.
The first improvements will be added to Silver Muse this month, with a special champagne and caviar upgrade that will be subsequently rolled out to all the other ships. Other, more significant, enhancements are already planned, with the pre-scheduled renovation of Silver Whisper due this December now taking on a much greater range, including a partial refit of all staterooms.
Additionally, Silver Wind will now enter into an enhanced dry dock at the same time in a concerted bid to bring facilities more in line with award-winning flagship Silver Muse. This plan will be completed shortly after with an enhanced dry dock for the Silver Shadow.
All in all, in just two short months, it amounts to a major shake-up and revitalisation of a cruise line that was already in go-ahead mode since the launch of the Muse last year. A the time of writing, Silversea already have two new ships on order and we certainly wouldn’t rule out the possibility of more to follow. This was definitely the case when Royal Caribbean took over Celebrity, with a positive frenzy of new-builds in the creation of the four ground-breaking Millennium-class vessels from 2000 to 2002.
Their investment in Celebrity has continued to be significant, and it wouldn’t be surprising to see the same happen for Silversea, especially as both companies will benefit from the economies of scale and extra buying power the big corporation can bring to bear.
Ultimately, it is all about new growth in an industry that continues to grow in leaps and bounds. There are more new ships, in a greater variety of styles, than ever before, and that can only be healthy for the business as a whole – and for us as consumers. All aboard, now…!
What do YOU think? Are you still worried for the future of Silversea? Give us your thoughts in the Comments section below.