Royal Caribbean is known for launching mega cruise ships, but it wants to expand new classes into a different market.
While record-breaking mega ships are becoming the norm for the cruise line, larger ships are limited to certain ports. Some ports can't accommodate larger ships due to size restrictions.
Vessels in the Icon, Oasis, and Quantum Class are often prevented from visiting certain ports and must send tender boats out to dock.
Given these limitations, Royal Caribbean wants to expand into the smaller ship market.
On the second quarter earnings call this week, Jason Liberty, President and Chief Executive Officer for Royal Caribbean Group, talked about plans for new ships, specifically saying they have to replace their aging fleet.
The next class of smaller cruise ships will replace previous classes, reaching new ports and upgrading the small ship experience.
The next class of small ships will replace aging vessels
Even as it builds astounding, entertainment-packed mega ships, Royal Caribbean is mindful that its smaller vessels are becoming outdated.
"We have ships that are reaching 30-35 years [old]," Jason Liberty said.
"This is not just about what we want to build, it's also [about] replacing ships that will eventually reach their end of life."
Royal Caribbean hasn't launched a smaller ship since 2004, when Jewel of the Seas (a Radiance Class vessel) took her maiden voyage.
Read more: Royal Caribbean Captain talks about new smaller cruise ship plans
Grandeur of the Seas, Royal Caribbean's oldest vessel, was launched back in 1996.
Since the early 2000s, Royal Caribbean has made a name for itself with record-breaking ships like the Oasis and Freedom Class.
Although many of its smaller vessels have been revitalized in the last few years, they still lack the overall technology and stateroom categories the cruise line has developed more recently.
Cruisers have criticized ships like Grandeur of the Seas for their aged, broken-down quality.
Some complain that the cabins feel dated, with more adventurous cruisers missing exciting amenities like waterslides or surf simulators.
In general, cruise ships begin to age out after 30 years in service, so many of the ships launched before 2000 are reaching the end of their life.
Read more: Royal Caribbean ships by age — Newest to Oldest
"We're looking at smaller ships that will replace some of those older ships," Liberty said, touching on the cruise line's next project.
He called the business of designing new ships a long-term business.
"In the cruise ship business, you're always thinking longer term, in growth and [new ship] orders, but also your environmental footprint."
Creating new classes takes more than a few years. The Icon Class, for example, was seven years in the making.
Read more: How long does it take to build a cruise ship?
Royal Caribbean's goal is to be disciplined with its path of growth, thinking long-term, and taking on new ship orders with care.
Small vessels can visit more ports, expanding Royal Caribbean's global reach
During the earnings call, an investor asked if building smaller vessels would allow Royal Caribbean to reach new markets.
Since smaller ships can enter more ports, this is the case.
However, Jason Liberty explained that it's "less about the sourcing market, it's more about where the ships can go."
In other words, smaller ships at new ports don't necessarily attract cruisers who live near those ports but rather appeal to cruisers who want to go to new destinations.
It's less about where the cruisers come from, and more about where they want to go: "It's about getting them into some of the more unique destinations."
Research has shown that cruisers want to stay with the Royal Caribbean brand while traveling to new destinations.
The cruise line wants to further diversify its footprint around the world.
Read more: Does it matter how old your cruise ship is?
Royal Caribbean currently sails itineraries to over 270 destinations in 60+ countries, across six continents.
The goal with smaller vessels is to continue to spread out where guests can travel.
According to Liberty, Royal Caribbean wants to stay flexible in delivering the itineraries guests are looking to sail, as well as generating global demand for cruises.
What we know about Project Discovery
Little has been revealed about "Project Discovery."
Royal Caribbean's next class of smaller vessels could be called the Discovery Class, similar to Project Icon, which named its class and first name directly.
The first ship in the class could be named Discovery of the Seas.
Read more: Royal Caribbean CEO: New smaller cruise ship could be announced in 2024
The public is still waiting for details to be finalized for the cruise line to formally announce its plans.
However, Michael Bayley, Royal Caribbean President and CEO, has hinted that more information could be released sometime in 2024.
He also implied that the next iteration of the Ultimate World Cruise could be held on these new vessels.
While on the 2024 President's Cruise, Bayley remarked that the line wants to offer more outside cabin categories on its next World Cruise, while also keeping the capability to travel to unique ports.
The Discovery Class could satisfy this need, featuring upgraded oceanview and balcony cabins in a smaller frame.
The Captain of Radiance of the Seas commented that the new class of ship would be around the size of the Radiance Class, which has the capacity for around 2,500-2,700 passengers.
Read more: Royal Caribbean: Building a new smaller cruise ship is "deeply in our consideration"
The Radiance Class is the line's next-to-smallest class, averaging 962 feet long and 90,090 gross tons.
Jewel of the Seas was the last Radiance Class ship to be released, launched in May of 2004.
Over 20 years later, we could have a new ship to replace her.
