Royal Caribbean Shows Off Its New Private Island – TheStreet

Cruise line private islands generally just offer a beach, maybe a few beach activities, perhaps a kiddie play area, various bars, and a BBQ-style lunch. That's what Carnival Cruises Lines (CCL) - Get Carnival Corporation Report and Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report offer.

Some cruisers prefer these beach-based islands that offer a nice day at or in the ocean and not much else. Royal Caribbean (RCL) - Get Royal Caribbean Group Report decided to amp up its main private island for Caribbean sailings, Coco Cay (the company also has a private island in Labadee, Haiti).

Coco Cay used to be a basic beach that required a tender (a small ship) from the cruise ship to shore. The company, however, put the island through a massive renovation a few years ago adding a huge pool, a water park, a private beach club, and a variety of eating options turning the destination into "Perfect Day at Coco Cay."

The island still has quiet beaches and even a tranquil lagoon, but it also has an impressive water park, zip lines, and even a tethered hot air balloon ride (which all cost extra, so shareholders should be happy.

Now, the company has Perfect Day plans for another island, but it's not going to be the same kind of perfect day.

Image source: Daniel Kline/TheStreet

A global company, Royal Caribbean has long talked about plans to build a Perfect Day on Lelepa, a small island in the South Pacific. The island would become a stop on cruises out of Australia.

And, while it will use the Perfect Day name, it won't have a water park, hot air balloon, or, perhaps, even a pool (the company has not been clear on that). Instead, it will be built more around the natural beauty of the island offering cruisers "authentic adventures and genuine relaxation, according to Royal Caribbean President Michael Bayley, Cruise Passenger reported.

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Whats a perfect day for an Australian is not a perfect day for an American, Royal Caribbean Vice President Mark Tamis said recently, according to Cruise Passenger. Thrilling for an Australian might be snorkeling while a thrill for an American might be going down a water slidenot that Australians dont also like water slides, of course.

Royal Caribbean has not shared an opening date for Perfect Day Lelepa, but it's likely to be in 2023 due to pandemic-caused delays. The island will be built carefully working with the local government to make it reflective of the area's natural beauty.

"There's also one, very special aspect of this project that is also worth noting. Lelapa will be the first private cruise destination in the world that achieves carbon neutrality. All of the energy consumed will be generated from renewable sources. Accomplishing that requires both major investment and major innovation, but Perfect Day at Lelapa will be rich in both," Royal Caribbean Chairman Richard Fain said, as reported by the Royal Caribbean Blog (which has no affiliation with the company).

"One of the things that we're already seeing is Perfect Day is leading the charge in terms of demand and premium for the ships that are operating out of South Florida already and in fact, out of New York," Bayley said during the cruise line's third-quarter earnings call.

Bayley also noted that Coco Cay is not finished and construction continues on Hideaway Beach, a planned adults-only area of the island.

"The beauty of Hideaway Beach is that it is an adult-only area as part of Perfect Day. It will allow us to increase our capacity by approximately 3,000 people a day in late '22, which is obviously going to help improve our overall profitability and drive more revenue, both ticket and onboard," he said.

Coco Cay, Labadee, and soon Lelepa give Royal Caribbean something Carnival and Norwegian, not to mention smaller cruise lines all over the world, simply don't offer. It's a massive competitive advantage, especially in the current times when various cruise ports are limiting access to cruise ships.

Even after Covid, controlling its own highly-desirable destinations gives Royal Caribbean an edge over its rivals. Adding Lelapa, as well as a planned, but not finalized beach club in Nassau, builds on that competitive advantage.

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Royal Caribbean Shows Off Its New Private Island - TheStreet