00:00And I do want to go back and start this conversation back in the late 90s when you joined Royal Caribbean, which was still a relatively small cruise operator, now one with 16, 17 billion dollars in annual revenue.
00:13But who's counting? And I am curious as to what you thought about when you walked through the doors or at least walked into your office as a CEO and tried to sort of map out how you would actually grow this business.
00:27What was that thought? Wow. Well, you know, Romain, first of all, thank you for having me.
00:32And as you say, this industry has grown by leaps and bounds over the period.
00:38Thirty five years ago, we were a we were a small, very successful cruise line.
00:43But cruising was just a niche operation. And what's happened is cruising has become a mainstream part of the vacay, everybody's vacation expectations.
00:53And as a result is that we've gone from being a really small operation at the edge of vacation to being the most one of the most valuable,
01:04if not the most valuable company in the vacation business, larger than any airline, any hotel, almost anything you can name.
01:11And it's because cruising offers such amazing value and such amazing time for our guests.
01:18Was sort of the success and not just of Royal Caribbean, but even a couple of your peers, was that largely due to the way that you marketed the product or was it a little bit more organic?
01:29How did you get there?
01:31No, I think it's not so much the marketing. It's what we offered was a product that appealed to everybody.
01:38We went from a product that appealed to a small part of the total vacation market, mostly older or retired people.
01:46And now we have something for everybody. We have large ships, small ships. The ships are spectacular.
01:52It's really delivering the wow. I hate to. I don't actually hate to.
01:56I like using the title of the ship of the book.
01:59But we deliver the wow to our guests and they love it.
02:03And the result is the people who come back from a cruise vacation don't just rave about it.
02:08They're obnoxious about it. I love it.
02:10So it's interesting, Richard. I mean, you think about your tenure at the company, as Romain said, over three decades.
02:15You were CEO from 1988 to 2022.
02:20And 22, something big happened in 2020, of course, that global pandemic.
02:24And I have to imagine that must have been one of the more challenging parts of your tenure.
02:30Just talk a little bit about that time, because obviously any type of travel was really in the front line of what was affected.
02:38Well, Katie, first of all, thank you for bringing back the worst time of my life and making me relive it.
02:46But you're absolutely right. It was a terrible time.
02:49It was a time when almost everybody we talked to said, this is an existential risk to your business.
02:55The likelihood is that you just won't survive.
02:58And everybody else we talked to said, OK, your focus has to be, how are you going to get through this?
03:04And I think what made us successful in getting through it was we refused to do that.
03:09We said the objective isn't to get through this.
03:12There's no point in getting through it as a crippled entity.
03:15What we wanted to do is get through so that we were strong and that we emerged from the pandemic strong and ready to grow.
03:22And that's, of course, exactly what happened.
03:25And so when when you left in 2022, I mean, you think about where the world was and what it felt like.
03:31And there were still a lot of doomsday predictions that, you know, travel wouldn't return to levels that we had been prior to the pandemic,
03:38that, you know, things had fundamentally altered.
03:40As you sit here in 2025 and you reflect on how you felt it when you left in 2022, I mean, how close are those two two visions?
03:50Well, actually, we did anticipate this.
03:54You know, yes, you're absolutely right.
03:56There were an awful lot of people who were predicting doom and gloom.
04:00The vacation business would never come back.
04:02But those people weren't talking to our guests.
04:05Those people weren't listening to the public.
04:07Those people were dealing with their own fears.
04:10We were dealing with the facts that the that what we were offering.
04:14And I love the pictures you've got on here are just so exceptional.
04:18We were providing such an amazing vacation and we were looking at our forward bookings.
04:22We were looking at our loyal guests.
04:25And so our goal in at the beginning of the pandemic was to make sure that at the end of it, we were strong, that the product we were offering was extraordinary.
04:35And that's exactly what happened.
04:37The passion of our people was overwhelming.
04:40And they delivered the wow at a very reasonable price.
04:45And the result was predictable.
04:47The market has boomed.
04:48I am curious right now, Richard, as to the current state of the cruise industry.
04:54And I mean it more from the side of the companies themselves with regards to being able to hire and more importantly, hire the right people at the right price.
05:02And also, of course, getting your hands on the supplies and other materials that you need, particularly in light of some of the inflation that we've seen out there.
05:09What's been the process that you've seen with your CEO and some of your peers out there right now in managing that?
05:17Well, actually, again, we're seeing a lot of people worried about will we be able to get enough people?
05:26Will we be able to attract the guests?
05:28Will tariffs cause a problem with our supply chain?
05:31And I'm very fortunate that my successor, Jason Liberty, has been an extraordinarily good leader.
05:38But we have over 100,000 employees.
05:42And frankly, it hasn't been a real challenge to hire them.
05:46Our goal, I mean, the whole book is about our culture.
05:49And our culture has made it possible to attract the best and the brightest.
05:54And we've had no difficulty attracting the people we need as we've emerged from the pandemic.
06:00And we've continued to grow at good rates.
06:03We've had very little problem on the supply chain side.
06:08It's a little difficult.
06:09But, you know, there's always some challenge.
06:12But basically, we've been able to meet our needs without, frankly, we've been able to control our cost to a remarkable degree.
06:19So, I think it's, again, one of the things where we shouldn't spend our time looking at people who write press releases who don't necessarily talk to the guests, don't talk to the supply chain.
06:33We should look at the facts on the ground.
06:35And we should have a culture.
06:37And the thing I'm proudest about in my 33 years was participating and developing that culture that created, creates the wow, but creates the wow not only for our guests, but also the supply chain people delivering what's needed to the ships, the crew members delivering what's needed to the guests.
06:56Also, with regards to those employees, and I'm curious just about longevity.
07:00I mean, you've been with the company for more than three decades, a CEO for 32, 33 years of that.
07:06Is that type of longevity normal for other folks out there, not just the CEO?
07:11That type of longevity is not typical.
07:17CEOs, I think, in the United States average is somewhere in the range of six years.
07:21And one of the beauties of being in that position so long, and I did have, I had the best job in the world.
07:28But one of the beauties was you get to work with people, you get to develop people.
07:32And so, the top management at Royal Caribbean are all long-term.
07:37The average of an officer at Royal Caribbean is like more than 15 years today.
07:43And that means they've seen it all.
07:46They've been through different crises.
07:47Just like any other industry, we have our crises.
07:509-11, it was the Great Recession, it was COVID.
07:54But the culture helped drive us to find solutions to what the problems were and continue to look forward, not back.
08:02Well, to that point, Richard, I want to reflect back on your tenure at Royal Caribbean.
08:07Like you said, you lived through a lot of different crises and you lived through a lot of different economic cycles.
08:12And you think about where we are right now, there's concerns about the labor market.
08:16We know that consumers are really tired after years of inflation at these persistently high levels.
08:22I mean, thinking back on past periods of high inflation, what was it like managing through that?
08:28And what experience, you know, how would that experience inform how you would handle this period, where, again, inflation and prices just seem stubbornly high?
08:37Well, I do think, and coming back to Romain's point, I think the fact that we all have lived through this before and have the experience, and so we have the confidence to be able to look long-term.
08:51Everybody else is looking at next month, next year.
08:54We have the ability, because we've all been through this, as you say, so many economic cycles, so many other kinds of crises, to know that you do emerge on the other side.
09:05Now, we're benefiting the cruise business because not only do we provide a fantastic vacation, and by the way, I'm happy to sell a cruise if we can get to that in the program, but if I can't sell you a cruise, I can point out that the cruise is actually a good value.
09:23So what we've seen in recessionary times is the cruise industry doesn't suffer as much as some other industries because we're good value.
09:31And during bad times, people don't stop vacationing, they just are more careful about what they choose.
09:37And when they look at us, they find it's good value for money.
09:40So that experience, the culture of everybody aligned to a long-term goal, those things have gotten us through in the past, and I feel very good about where they're getting us to today.
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