Royal Caribbean Cruises Ltd., the parent company that owns Royal Caribbean, Celebrity Cruises and Azamara Club Cruises, announced this week that they are buying a controlling share of Silversea Cruises. Silversea Cruises has been owned and operated by the Lefebvre d’Ovidio family for the past two decades. Assuming that there are no hiccups along the way, the deal should be closed by the end of 2018.
For those that aren’t aware, Royal Caribbean Cruises Ltd. also owns stakes in other cruise lines. For example, they are joint owner of the German brand TUI cruises. They also own smaller stakes in Pullmantur and SkySea Cruises (a Chinese brand). However, the acquisition of Silversea Cruises adds something to their portfolio that they don’t have right now: a high-end luxury and expedition cruise line. Yes, Azamara Club Cruises can be classified as an expedition cruise line, but they are not high-end luxury like Silversea Cruises.
What does that mean for travel agents?
The announcement did not include a lot of details, so we don’t know the answers yet and it will take a while to get these answers. But travel agents of course will have questions.
One question is whether Silversea Cruises will be integrated into Espresso / Cruising Power. It makes sense that this might happen eventually, streamlining our ability to book all four brands in one place. Since this isn’t a 100% acquisition though, it’s hard to tell at this point whether integration into Espresso is in the plans. If it is, I imagine that it will involve a fair amount of work in the background and isn’t as easy as simply flipping a switch.
Another question might be about commissions, and how travel agencies may be affected. I don’t see a downside to this or a negative impact on commissions. Right now agency commission levels are determined by revenue across the three brands (Royal Caribbean, Celebrity and Azamara). It is possible that once the acquisition is completed, and if they integrate all of their systems, I wouldn’t be surprised if Silversea Cruises added into the revenue calculations for determining commission levels. However, if Silversea Cruises remains a stand-alone entity (not integrated into Espresso or other Royal Caribbean Cruises Ltd. systems), it won’t change how any of us earn our commission status with any of these cruise lines.
A related question might be about consortiums and their contracts with Silversea Cruises. For my consortium I don’t imagine there will be an issue. Royal Caribbean, Celebrity, Azamara and Silversea are already preferred suppliers with the consortium. Where this may be an issue is if there’s a consortium out there that does not currently have all four brands as preferred suppliers. After the acquisition, there might be some negotiations with these consortiums to include all four brands on their preferred supplier lists.
I’m sure we all will have more questions as time progresses. Acquisitions like this don’t happen over night, and all of the logistics involved will take time to implement once the acquisition has been completed. Patience will be the key.