Royal Caribbean knows how to make people happy. It has mastered building the cruise ships people want, the ones that take them to destinations they're happy to be in.
And while the cruise line has said it plans to eventually build some smaller ships to replace its aging hardware in that area, that's not the company's core business. Royal Caribbean builds megaships — and the ships themselves are the destinations.
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Nobody spends the money to board its newest ships, Icon of the Seas and Utopia of the Seas, because they stop in Nassau. They're paying a premium for those ships because they offer more to do on board than they can fit into a week on Icon, let alone three or four days on Utopia.
This bigger-is-better model pairs massive destination ships with Perfect Day at CocoCay, the cruise line's private island. CocoCay essentially serves as an extension of the ship, giving passengers a beach experience along with more pools, food, drinks and entertainment.
Perfect Day at CocoCay has consistently been Royal Caribbean's most popular destination. That's a clear deviation from the previous cruise model, where seeing different places was the draw.
For Royal Caribbean, destination-based has become a niche business for its older ships and classic customer base. In many ways, Icon- and Oasis-Class ships are the ship and CocoCay, as an extension of the ship, is the attraction.
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Image source: Daniel Kline/Come Cruise With Me
Royal Caribbean sees private destinations as its future
Cruising to different countries where you explore and learn a little bit about different cultures used to be Royal Caribbean's core business model. That's still how sister brand Celebrity Cruises primarily operates, and Royal Caribbean's smaller ships do destination-based cruising.
Destination-based sailings are active. You may be in a country where you don't speak the language and you sometimes have to navigate unfamiliar transportation systems. It's not a type of vacation that's all about taking it easy.
Sailing an Icon- or Oasis-Class ship that stops at CocoCay is an entirely different type of vacation. It's not hard work to pick whether to hang out by the beach or the pool. The same applies to food choices, bars and entertainment.
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When you board these large ships, the expectation is relaxation — even if relaxing means you're very busy with activities. But unlike most land-based vacations, you won't have to do a lot of thinking or planning to enjoy yourself.
Royal Caribbean is betting that its passengers want bigger ships (one more Oasis-Class and three more Icon-Class ships are on order) paired with high-end beach days.
The cruise line has massive plans in that area too.
Royal Caribbean bets on destination cruise ships and private destinations
Royal Caribbean believes that its passengers — at least the ones on its largest ships — want vacations, not travel experiences. That's why the cruise line has massive plans for new Coco-Cay-like experiences.
"We also continue to lead the vacation industry with exciting new experiences on our ships and our portfolio of private destinations," CEO Jason Liberty said during its second-quarter earnings call.
"Perfect Day at CocoCay continues to perform exceptionally well, and we are reaching important milestones on Royal Beach Club Paradise Island opening in 2025 and Royal Beach Club in Cozumel, Mexico opening in 2026."
The beach clubs will be added-fee half-day experiences. The cruise line is taking two fairly routine ports, Nassau and Cozumel, and turning them into affordable beach, pool and bar days for passengers.
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Royal Caribbean also plans to build another take on Perfect Day, Perfect Day in Mexico, which will open in 2027.
"Along with Royal Beach Club Cozumel, the recently announced beach experience in Cozumel, Mexico, that opens in 2026, Perfect Day Mexico, will be a hallmark of Royal Caribbean vacations that introduces new adventures in the western Caribbean," the cruise line's website says.
"Vacationers have in store an unparalleled lineup of experiences and locally inspired twists across the design, flavors and spirit."
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