The Miami-based cruise company RCL said Thursday that it had agreed to pay roughly $1 billion to acquire a 66.7% stake in Silversea Cruises, a privately-owned cruise company headquartered in Monaco that specializes in luxury and expedition cruises.
Silversea has nine ships. Its five larger ships mainly travel to larger, more popular tourist destinations such as Alaska, Iceland and Bali. The company’s four expedition-class ships voyage to smaller, more remote locations such as Svalbard, a Norwegian archipelago positioned between mainland Norway and the North Pole, Easter Island, the Galapagos and Antarctica, all locations that larger ships have difficulty accessing.
Royal Caribbean struck the deal to fill a gap in the company’s portfolio, Royal Caribbean Chief Executive Richard Fain told MarketWatch. “The ultra-luxury and expedition markets are growing so much more exponentially than other markets,” he said.
Though the company offered premium and ecotourism cruises through its Azamara and Celebrity brands, it lacked a true ultra-luxury line unlike its competitors Carnival Corp. CCL and Norwegian Cruise Line NCLH Carnival owns Seabourn Cruise Line, while Norwegian has Regent Seven Seas Cruises.
Royal Caribbean also has partial ownership of Pullmantur Cruises and operates TUI Cruises as a joint-venture with German tourism company TUI Group TUI1.
While a small market, expedition cruises can command a serious premium in terms of the cost to book a vacation. Fares for a 10-day Antarctic cruise with Ponant, for instance, start at more than $10,000, whereas fares for a nine-night cruise to Bermuda and the Caribbean with Royal Caribbean start at $1,200.
Indeed, Royal Caribbean is not the only company to double down its investment in expedition cruises…