Royal Caribbean Group CFO Discusses Silversea’s Bright Future

Look for more growth for ultra-luxury Silversea Cruises, according to Jason T. Liberty, executive vice president and chief financial officer of Royal Caribbean Group (RCG), Silversea’s owner.

As part of his many duties, Liberty oversees Silversea, which RCG acquired in full in July 2020, after purchasing a two-thirds share two years earlier. Royal Caribbean Group also includes Royal Caribbean International and Celebrity Cruises, as well as a 50 percent ownership of a joint venture that operates TUI Cruises and Hapag-Lloyd Cruises. Together, these brands operate 60 ships with an additional 13 on order as of June 30, 2021.

TravelPulse caught up with Liberty before the christening of the new 596-guest Silver Moon in Athens, Greece, in late July.

TravelPulse (TP): Royal Caribbean Group is investing a great deal in Silversea. Not only are there new ships, but the line is becoming even more inclusive.

Jason Liberty (JL): When we first bought into Silversea, there was a lot of social media speculation about whether we were going to commoditize the business. And our ambitions were always the opposite of that. We felt it was a great brand and great experience, but we had an opportunity to enhance the product. Project Invictus was one of our earlier projects that improved the food quality and some things on the service side. (Project Invictus is a long-term plan to grow and enhance Silversea’s fleet announced when RCG acquired the line in 2018.)

We’re really tuned in to what the customers are looking for, what they value, what they don’t value, and making sure we’re able to bring that to life for them on their vacation experience.

TP: Silversea is offering free roundtrip air, transfers and at least one complimentary shore excursion in every port of call starting in 2022. Most recently, the company announced complimentary chauffeur service to and from the airport for those who book full-fare and longer voyages starting March 30, 2022. How can you offer all these extras without making it cost-prohibitive?

JL: There are many different ways we do it. One of which is by having Silversea part of the group, we have this opportunity to realize synergies. Many of those synergies are on the supply-chain side. When we buy bananas, as an example, we buy bananas cheaper because we buy so many bananas as a corporation. What we’re doing a lot of the time is taking those savings and investing into the product. We do believe consumers are willing to pay more for a more end-to-end experience in this segment.

We want to help our guests create memories. When they come home, they have stories that they talk about and brag about, and they’re willing to pay for that. We believe that investing or reinvesting in those type of activities brings greater demand.

TP: Silversea was one of the pioneers of luxury expedition voyages. Now look at all the competition.

JL: When you add up all the ships in the expedition space, it probably fits on half of an Oasis-class ship. So it’s all relative. There’s certainly competition out there, but Silversea has done an exceptional job with their loyalty. They have a very strong brand, a strong reputation, and that, combined with Royal Caribbean Group’s reputation, really makes them stand out versus the others. We’re trying to find more and more ways to make those experiences on the expedition side more comfortable. Whether that’s on the air travel, better Zodiacs or making it easier to get on and off the ship.

TP: Is there more growth for Silversea in terms of more traditional or expedition hardware or both?

JL: The answer is absolutely, yes, I would definitely say on both sides. This is an area that the secular trends are very much in favor of Silversea – the trends around people trading stuff for experiences and wanting to do it in an ultra-luxury type of way. There’s a lot of opportunity and demand for this product. So, yes, the answer is we are certainly focused on growing this brand. We wouldn’t have invested in this brand if we thought it was going to stay at the status quo.

TP: Silversea traditionally has been a luxury cruise line. Yet, many now consider certain lines previously categorized as premium now a luxury product. Does Silversea need to up its game into the ultra-luxury segment?

JL: Silversea, I think, has always been in the ultra-luxury category. Certainly, our Celebrity brand and (Celebrity President and CEO) Lisa (Lutoff-Perlo) have done an exceptional job of tuning that brand and that business and moving it into that overall luxury space. With the Edge-class ships, I do consider it a luxury experience. It’s a different experience than Silversea, which has larger staterooms on much smaller ships that go to many more exotic destinations around the world. We’re bringing that ship-to-shore experience in a more immersive way.

We’re also delivering incredible luxury experiences on Royal Caribbean International. We have suite guests that many times focus on multi-generational luxury travel. Many times, you’ll find the patriarch or matriarch of the family, when they’re traveling with kids and grandkids, they’re on Royal for multigenerational experiences. Sometimes they’re traveling on Celebrity and sometimes when it’s just them and their spouses or some of their friends, they’re exploring the world on Silversea.

TP: Has the past year and a half been the absolute worst time for you? You oversaw a lot of the financial machinations to ensure the group came through the shutdown.

JL: For sure, this was the year of the CFO. Certainly, there was a lot of stress and a lot of unknowns of what you’re dealing with, but when you’ve got great partners, great relationships, incredible brands and great businesses, it certainly makes it doable first off and also interesting and fun. There were some dark days in all of it, but we got the opportunity to spend more time with family and be more interactive. I think you appreciate your colleagues and business a lot more. A lot of good came through the year, and now being on this ship, there’s nothing better. You appreciate everything and everyone so much more.

TP: Anything to add especially in relation to travel advisors?

JL: I can’t say enough about how much we appreciate travel advisors. Even pre-covid, we appreciated all the value that the travel agency community brings to us. And of course, through COVID, it’s been a challenging time for all, and they’ve all stuck through it with us. We try to be there for them, and they’ve been there for us. Luckily there’s a lot of demand that we’re all working together to harvest in a quality way. People’s thirst for experiences is clearly there, which is a win for everybody. We are superfans of the travel agent community, and they should never fear that we feel any differently.