Final Essay

Company: Royal Caribbean International

Nicole Smith: ni925505

Giulianna Klein: gi889179

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Royal Caribbean

Royal Caribbean International is a global luxury cruise line that was first founded in 1968

and is presently based in Miami, FL. In 1969, the company launched its first ship the Song of

Norway which went on to carry passengers for about forty years before it was recently sold for

scrap in 2014. Currently, Royal Caribbean International contains twenty-five cruise ships and are

located in a total of six of the seven continents. They currently hold the world’s largest luxury

cruise ship Symphony of the Seas which contains robot bartenders, a ninty two-foot waterslide

drop, and a nine-story high zip line.

As technology continues to advance, Royal Caribbean International can continue to

cultivate and expand their brand. In Fall of 2020, the cruise line plans to release its first Quantum

Ultra Class cruise named Odyssey of the Seas. Their business will continue to progress and to

offer various job opportunities for aspiring marketers. The cruise lines destinations, ships, and

guest programs all required marketing campaign strategies to successfully launch and sustain

their new products. Seeing as the company is based in Miami, Florida and sails out of four major

ports in Florida alone, Royal Caribbean would be an idea company for a student located in this

state to work for. Marketing job opportunities are offered both in ship and off ship in their

different offices located around Florida. Due to their ever-growing product line and well-known

brand name, the company would offer both a creative and fast paced job environment where

people can continue to grow and expand their marketing and data analytics skills.

Litigation Risk

In 2019 alone, Royal Caribbean cruise ships carried over six and a half million

passengers. Newer ships in the cruise line carry an average amount of six thousand passengers
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per voyage. With this high volume of people being transported from port to port on their ships

there is also a high amount of risk with the company being sued. Claims of injuries, illnesses,

ship negligence, and assaults by crew members are among the most common of claims made

against the company. Claims involving procedural concerns, recent court decisions, and contract

exclusions are constantly involving and changing maritime law. Over time, acts like the Death on

the High Seas Act, have been developed in relation to the “maintenance of actions for death on

the high seas and other navigable waters” (Leesfield) to protect family members who have lost

someone while sailing.

The case of Donna Incardone, et al. v. Royal Caribbean Cruises Ltd. centers around the

failure of a ship to navigate away from the path of a major storm on the way to their port in the

Bahamas. In this case, the lead plaintiffs sought compensation against the defendant, Royal

Caribbean Ltd., for the company’s negligence, negligence infliction of emotional distress, and

intentional infliction of emotional distress. The case was carried to the Supreme Court where

Judge Martinez dismissed the plaintiffs right to collect punitive damages due to exceptional

circumstances where “plaintiffs needed to show defendants (a) actual knowledge of the

wrongfulness of the conduct, (b) the likelihood that injury or damage would result, and (c)

despite that knowledge, nevertheless intentionally pursued that course of conduct” (Loh). More

cases centering around physical and mental injury, assault, and negligence arise and maritime

law and have lawyers that specifically take on these kinds of cases.

Intellectual Property

Since its first cruise ship in 1969, Royal Caribbean international has had to acquire

various Trademarks to protect its brand and distinguish its self from their competitors. The
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company possess various forms of intellectual property with their trademarks and copyright

registrations being the most important to protecting their brand. Currently every ship that sails

under the Royal Caribbean name/brand has had its name registered as a Trademark under Royal

Caribbean Ltd. In-ship features and their names that are specific to Royal Caribbean

International, like Viking Crown Lounge are also protected under copyright law to protect any

original ideas. Also, all images, illustrations, designs, and icons that appear on any Royal

Caribbean Ltd. affiliated internet sites are currently protected with treaty provisions and

worldwide copyright law. On their website, it is also stated the rules for any links to their

company websites all implemented to protect the image of their company and ensure they are not

being referred to in demeaning ways.

Without these various trademarks and specifically stated guidelines to using their

company website link, Royal Caribbean would be exposing themselves to potential risk. That is

why that as names and ideas are produced, the parent company Royal Caribbean Ltd. registers

the name or symbol. Ship designs and layouts are also a common feature that encompasses the

cruise line industry. For example, certain layouts, are a common feature that a cruise line can

become known for. General public and customers learn to associate these features to a specific

company to which the company can then consider these features assets.

Contracts

After doing some research, I came to the conclusion that the most important contractual

relationship for the Royal Caribbean Cruise Line is their “HULL NO. S-713 CREDIT

AGREEMENT.” Put plainly, this is an agreement between the Borrower, Royal Caribbean, and

the Lender, the bank, wherein the borrower receives a loan to fund a cruise ship. This came from
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the “Contract for the Construction and Sale of Hull No. S-713” in which the ship is to be built. In

order to even build the ship and come to an agreement with the builders, Royal Caribbean first

needs the money to put down on the ship, and without this above stated contract they would not

have the money to do so and the cruise line would simply not exist. A properly executed lender

agreement is going to maximize shareholder return through the use of leverage, and in this case

Royal Caribbean can do that because they can use revenue from current ships- built on the lender

agreement- to continue making more ships and increase their shareholder’s wealth and their own

revenue.

As stated in their terms, the lender gave the borrower $948,850,000 as the Maximum Loan

Amount, which was 80% of their purchase price from the builders of the vessel. The loan was to

be provided 2 days prior to the delivery of the vessel. Both parties agreed to this contract on 7

September 2016.

This contract was designed to solve the simple problem of not having efficient funds to build the

primary component of their business, the cruise ship itself. After entering into this contract, the

funds were awarded and Royal Caribbean was therefore able to provide the funds to their

builder, Meyer Werft GmbH & Co. KG, in order to begin the building of their vessel.

Pandemic Affect

Royal Caribbean was put in a very difficult position, seeing that they are a form of transportation

which is all effectively cancelled due to the travel bans and COVID-19 outbreaks. Royal

Caribbean did the right thing and suspended their cruising on March 13, 2020 from US ports and

the following day decided to suspend operations for all sailings worldwide. They have decided to

keep their lines suspended until June, 11 2020, and all sailings departing on and before this date
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will be cancelled. They are currently set to start departures again on the 12th of June, which in my

opinion is early to be set one. It is one thing to be “shooting for” an opening date, but the website

specifically using the wording “we will now resume our operation June 12th for the majority of

our fleet”, which implies a definite decision. I would not be surprised if this date changes in the

near future.

Royal Caribbean has also decided to provide cancellations with a “125% Future Cruise Credit”

to use by December 31, 2021, which is very generous of them and based on the total cruise fare

paid. Cruise credits are to be received by email between April 10th and May 22nd, depending on

which cruise was booked.

They have also extended their “Cruise with Confidence” policy through September 1st, which

allows customers to book cruises with the ability to cancel up to 48 hours before sailing for any

reason and receive a full credit to use before December 31, 2021. They are currently down

61.3%.
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Bibliography

“Copyrights.” Royal Caribbean, Royal Caribbean Ltd., 17 Dec. 2018,

www.royalcaribbean.ae/copyrights/.

“Cruises Health and Travel Updates - Coronavirus (COVID-19): Royal Caribbean Cruises.”
Itinerary Updates, www.royalcaribbean.com/cruise-ships/itinerary-updates.

“Form 10-Q Royal Caribbean Cruises Ltd.” SEC Report, 2 Aug. 2018,
sec.report/Document/884887/000088488718000079/rcl-6302018xexhibit1010.htm.

Leesfield, Ira H. “Cruise Ship Litigation.” Plaintiff Magazine, Oct. 2009,

www.plaintiffmagazine.com/recent-issues/item/cruise-ship-litigation.

Loh, David Y. “Cruise Passengers' Punitive Damage Claim Arising from ‘Bomb’ Storm Is
Dismissed.” American Bar Association, Cozen O' Connor, 25 Feb. 2020,
www.americanbar.org/groups/litigation/committees/admiralty/practice/2020/donna-
incardone-v-royal-caribbean-cruises/.