Some Thoughts on Our Exciting Week of Crown & Anchor Updates and News of our Alliance with DreamWorks Animation

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It’s been an exciting week for Royal Caribbean International. We are gathering feedback from the market in the aftermath of our two big announcements: the program enhancements to the Crown & Anchor Society and our new relationship with DreamWorks Animation.

We’ve received overwhelmingly positive responses on the Crown & Anchor changes. It isn’t my intention to repeat all of the compliments here (not that it isn’t tempting) but to make a few observations/clarifications.

First, the current Ultimate Value Books (a.k.a. coupon books) expire on June 30th and the new ones will arrive before then. In the interim, we’re giving our guests immediate access to the three most significant new or augmented benefits: Internet, laundry and photo. An insert will be placed in the coupon book onboard until the new ones arrive. On most ships the books will arrive in the next two weeks. Legend of the Seas will get her books in late June.

Second, some of our shareholders who are Crown & Anchor members are displeased that the shareholder benefit cannot be used together with Crown & Anchor discounts, including the new onboard booking bonus. We are sorry that this is the case but we cannot modify our approach in this area. In order for the onboard booking bonus to be as robust as possible and to be used together with the Crown & Anchor discounts, we could not allow the shareholder discount to also be used together with it. Please bear in mind that the reason to own our stock is that you believe the stock represents a good investment in connection with your personal investing strategy. The cruise benefit is a nice opportunity to have, if applicable, but not a reason to own the stock.

Third, we have received comments from members who want the benefit of the new onboard booking bonus retroactively applied to previously made bookings. I hope most of you appreciate that we needed to pick a time to introduce this benefit and that there would always be customers who had booked not long before the implementation date. There is no way to draw a line on retroactivity and so the bonus is applicable for eligible bookings made on or after our June 1st announcement.

Finally, as we have intimated previously, we look forward to introducing more enhancements to the Crown & Anchor Society in the not too distant future.

Returning to DreamWorks, we are really excited about this major step forward in our entertainment and programming. DreamWorks is the leader in animated films and Royal Caribbean International is the leader in cruising. Although these companies have worked in very different spaces, they have in common vision, inspiration, creativity, scale and global reach. Not to mention that both companies’ products make people happy.

From the beginning of the dialogue last year until the announcement on Friday, DreamWorks CEO Jeffrey Katzenberg and his team have been a pleasure to be around. Their dedication and commitment to exploring the possibilities of a relationship made this relationship come to life. They are very serious about what they do, about the development of their world-renowned characters and about building a foundation for long-term success. We don’t see limits to what we can achieve together.

While we still have a lot of work to do before Allure of the Seas comes out with DreamWorks programming and characters onboard, we have already had a taste of what this will mean to our guests. We brought the costume characters on Oasis of the Seas for a trial run and were amazed at the excitement from guests of all ages as well as the crew. Adults wanted to take pictures with the characters as much as their children did. The crew waited in line to get their pictures taken. The breadth of appeal of DreamWorks’ properties to people of all ages was readily on display.

This has been a fun assignment for our people. They have enjoyed finding the best ways for the characters to interact with our guests and working to integrate the DreamWorks experience into our entertainment programs.
We will have experiences for adults and children including the 3D theater, in-stateroom programming, exclusive entertainment and character breakfasts and all are complimentary. Besides Allure of the Seas, DreamWorks’ programming and characters will be onboard Oasis of the Seas, Freedom of the Seas and Liberty of the Seas by early 2011.

This blog entry has already gone on too long, but that won’t stop me from mentioning that the big week actually got going in earnest when I FINALLY broke 19 minutes for the 5k, reaching my goal with an 18.59 on Memorial Day. I’m still behind the Big Six in my age group, but I’m getting closer.

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