ANALYSIS
Royal Caribbean Cruises Ltd are to buy a controlling stake in Silversea – the ultra-luxury Italian cruise line, but the boss of the family-owned company insists they won’t go mass market.
Manfredi Lefebvre D’Ovidio, the Executive Chairman of Silversea made the announcement via email to Silversea’s Venetian Society members overnight.
Manfredi Lefebvre D’Ovidio completes the deal with Royal Caribbean Chairman and CEO, Richard D. Fain.
Mr. Lefebvre D’Ovidio wrote, “I am proud of this new and exciting partnership. Not only will I be able to fulfill, very soon, the dream of my father of a fleet of minimum 12 small ships, but it will give us capital and financial strength to further accelerate our growth”.
Royal Caribbean will take a 66.7% stake in Silversea, valued at approximately US$1-billion. The partnership between Silversea and Royal Caribbean will see Manfredi remain Executive Chairman of Silversea to guide the brand’s long term strategy.
In a world where most cruise brands are owned by either Royal Caribbean or Carnival Corporation, Silversea has been something of an independent disruptor. Since its founding in 1994, Silversea has been redefining luxury cruising with smaller ships, resort-style facilities, world-class cuisine and high staff-to-guest ratios.
It’s fair to say these are not attributes luxury cruisers readily associate with Royal Caribbean, in particular the mega-ships accommodating thousands of guests. So how well Silversea’s loyal devotees will respond to the Royal Caribbean partnership remains to be seen.
However, Mr. Lefebvre D’Ovidio has been at pains to point out that the deal does not mean they will be building larger vessels or going mass market. “I guarantee you personally that we won’t become more mass market and neither will we start building large ships”, he said.
The partnership between Silversea and Royal Caribbean makes a perfect business sense for Silversea, who need capital for their ambitious expansion plans. The line has two new Muse-class cruise ships on order and would like to expand the luxury fleet to 12 vessels. Royal Caribbean’s equity stake will give the Silversea brand access to the capital it needs to fund future builds.
It also makes perfect sense for Royal Caribbean too, who have lacked a presence in the ultra luxury cruise market. Indeed the multinational says Silversea will be the jewel in their crown and offer exciting growth opportunities.
The Silversea and Royal Caribbean deal is expected to be concluded by the end of this year, pending regulatory approvals.
Silversea tell us that there will be no changes to the plans of guests with existing reservations.
About the Author: Jason Kerr
