Why Royal Caribbean Isn’t Going All in on Massive Cruise Ships Despite the Wild Success of Its New Icon of the Seas

^{This article originally appeared on Business Insider.}

Earlier this year, guests at Royal Caribbean’s Perfect Day at CocoCay private island were the first to revel at the historic sight of the world’s largest cruise ships, Icon of the Seas and Wonder of the Seas, docked side-by-side.

The vessels towered over their communal dock like skyscrapers, casting a dark shadow over their relatively tiny shared pier.

Together, they can accommodate about 19,250 people.

^{Cruise ships like the Icon of the Seas will spend the majority of their trip at sea. Pieter De Boer via BI}

At 1,196 feet long and weighing 248,663 gross tons, the Icon of the Seas is a sight to behold. When it launched in late January, the giant vessel upstaged its eight-foot shorter predecessor, the Wonder of the Seas, as the world’s biggest.

At the time, it was no surprise: Every new Royal Caribbean ship seemed to dethrone another Royal Caribbean ship for this title.

But not for long.

The company’s smaller ships, important for diverse trips, are aging.

^{Royal Caribbean saw the largest booking day ever when reservations opened for the Icon of the Seas in October 2022 — more than a year before the ship’s official launch. Brittany Chang/Business Insider}

The company is synonymous with its mega vessels. And they’ve been mega-hits: Michael Bayley, the president and CEO of Royal Caribbean International, has repeatedly called the Icon of the Seas the “best-selling product” in the company’s history.

Royal Caribbean is set to launch four more megaships by 2028 — representing about a third of its total fleet. So far, most of the megaships’ scheduled sailings are in the Caribbean.

The other 21 smaller vessels tend to have more specialized itineraries, Patrick Scholes, the managing director of lodging and leisure-equity research at Truist Securities, told Business Insider.

^{Royal Caribbean International via BI}

Given their trimmer sizes, these vessels can operate more sailings outside the Caribbean, which often reel in high fares and customer satisfaction for the company, Jay Schneider, the chief product-innovation officer at Royal Caribbean Group, told reporters in January. Think of the Mediterranean, Alaska, and South Pacific itineraries — the latter are especially important as the cruise line continues to ramp up business in Asia.

But these destination-flexible cruise liners are aging as Royal Caribbean continues to unveil their giant counterparts. The company launched its four oldest Vision-class ships, with a maximum 2,730-guest capacity, between 1996 and 1998.

They’re tiny and old compared to the 2-month-old, 7,600-guest Icon of the Seas.

Looking ahead, Royal Caribbean plans to return to the basics: smaller cruise ships.

^{Royal Caribbean’s oldest ship is the 2,440-guest Grandeur of the Seas, which first set sail on December 14, 1996. Royal Caribbean International via BI}

Despite the cruise line’s success with mega-vessels, Schneider said Royal Caribbean is now considering a new class of ships that would start “smaller” — noting that he was “careful to say small, but less-than-large.”

“The reality is, families want to go on vacations not just in the Western and Eastern Caribbean where a ship like Icon can get into,” Schneider said. “They want to stay with our brand and journey to different destinations that require more versatility in ship size.”

Desirable destinations such as French Polynesia and Venice, Italy, have limited visiting cruises, including size restrictions, to curb pollution and overcrowding. But, as Schneider said, small-vessel-enabled specialized itineraries are also important to travelers.

^{The pool was surrounded by several hot tubs. Brittany Chang/Business Insider}

Giant mass-market floating resorts also often attract first-time cruisers, enamored by their family-friendly water parks and Broadway-style shows. But after a few good vacations at sea, these no-longer-new-to-cruising guests might start craving quieter ships or more bespoke itineraries.

“Alaska cruises tend not to be the first-time cruiser,” Scholes told BI. “I don’t really see Icon of the Seas doing a Norwegian Fjord or Alaska trip.”

Plus, “there’s probably only so much demand for these giant ships,” Scholes said.

Royal Caribbean has already succeeded in the first part: bringing in a swath of new cruisers with its megaships. Now, it has to retain them.

https://www.entrepreneur.com/business-news/icon-of-the-seas-best-selling-but-smaller-boats-trending/471512