1 Monday, 26 September 2022
Tawara Cruises 2018 Annual Report
Last year was another record year for the global cruise industry with cruising being one of the fastest growing types of holiday. The global popularity of cruise holidays has
grown 20% faster than land-based holidays over the past 10 years and since 2008 the European cruise market has expanded by a staggering 49%. Over 25.8 million people
worldwide took a cruise holiday in 2018, the largest number in the history of the cruise industry. These figures confirm the cruise industry’s resilience to economic downturns
and the value provided by this type of holiday.
During the past twelve months we have further consolidated our position as one of the world’s leading cruise lines. We delivered the most profitable year in our history,
achieving record net income of $1.8 billion. More repeat business appears to have been the key to this growth. These strong results are a credit to the commitment and the
passion of our 80,000 shipboard and shoreside team members which, when coupled with the support of our valued travel agent partners, are the foundation of our sustained
earnings improvement. It is through their collective efforts that we were able to overcome significant challenges during the year such as the negative impact from fuel price
increases and currency exchange rates.
Overview
Our ships operate on a selection of worldwide itineraries that call on approximately 200 destinations on five continents. In addition to our headquarters in London and Florida,
we have offices and a network of international representatives around the world which primarily focus on sales and market development. We believe cruising continues to be a
popular holiday choice due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities. The following chart details our growth in cruise
passenger numbers (in thousands) over the past five years:
Our cruises are positioned at the middle and upper end of the cruise holiday industry. They are generally characterised by cruises that are 14 nights or shorter and feature a
casual ambiance, as well as a variety of activities and entertainment venues. Our brand appeals to families with children of all ages, as well as both older and younger couples.
More families are now cruising with children so the average age of a cruise passenger has therefore dropped.
The average length of cruise taken by our passengers dropped below 10 days in 2018 for the first time in nine years. Durations were shorter for both summer and winter cruises
primarily as a result of more short cruises being scheduled. These shorter cruises help attract guests who are new to cruising and will hopefully then return for longer voyages.
Our Fleet
We currently operate 10 ships with a capacity of approximately 16,150 berths. This count includes our two newest ships which entered our fleet in November and December
2018. We expect to introduce a further six ships by the end of 2022. We have four ships on order with a capacity of approximately 12,200 berths. These ships are scheduled to
enter service in 2019 and 2020. Additionally, we signed a memorandum of understanding to build two new ships which are expected to enter service in the second quarters of
2021 and 2022, respectively.
We are prioritising internet connectivity for our passengers in 2019 and are upgrading our systems and technologies across the entire fleet. This investment will ensure that
seamless, latest-generation connectivity is available to satisfy the needs of the modern-day holidaymaker. It will enhance the onboard experience and provide guests with fast
and reliable web access and the ability to share cherished memories with friends and loved ones even while at sea.
Sustainability Commitment
We are making meaningful progress on our 2025 sustainability goals focusing on our environmental impact performance. This year we have reduced our unit fuel consumption
by 28%. We remain committed to ongoing reduction in air emissions and are expanding our investment in the use of low carbon fuels. All of our new ships will be powered by
environmentally friendly liquefied natural gas (LNG). We have also introduced industry-leading shoreside technology to monitor real-time navigational performance and energy
use across our fleet.
Cruise Pricing
Our cruise ticket prices include accommodation and a wide variety of activities and amenities, including meals and entertainment. Prices vary depending on many factors
including the destination, cruise length, cabin selected and the time of year the cruise takes place. Our payment terms require an upfront deposit to confirm a reservation, with
the balance due prior to the sailing. Our cruises are generally available for sale at least one year in advance and often as much as two years in advance of sailing. During the
selling period of a cruise, we continually monitor and adjust our cruise ticket prices for available cabins based on demand, with the objective of maximising net yields.
Prince Muchono Inkhanyeti High School Grade 8
2 Monday, 26 September 2022
We earn substantially all of our cruise revenues from the sales of passenger cruise tickets and cancellation fees. While many onboard activities are included in the base price of
a cruise, we realise additional revenues from:
Shore excursions
Gift shop items
Casino gaming
Full service spas
Internet and communication services
Laundry and dry cleaning services
Liquor and some non-alcoholic beverage sales
Photo packages
Specialty restaurants
Many of these services are available for pre-booking on the internet prior to embarkation. These goods and services are provided either directly by us or by independent
concessionaires, from which we receive either a percentage of their revenues or a fee.
Themed Cruises
Themed Cruises have become increasingly popular and we see this as the next area of growth within the industry. These are primarily a regular cruise with enhanced or
additional programming on board. A Themed Cruise gives guests the opportunity to enjoy a favourite hobby or join in a variety of courses to improve their knowledge, culture or
history. They usually feature special guests such as speakers and performers, or educational shore excursions. We have responded to the changing vacation patterns of today’s
travellers by expanding our range of Themed Cruises.
Taster Cruises
Last year one in every three of our passengers was on their first ever cruise. As a result we have expanded the range of mini cruises we offer to appeal to the growing number of
people wishing to cruise for the first time. These trips last three nights or under and offer a great way to try the cruising experience for a fraction of the cost and without a large
commitment. Customers are able to experience life on board and enjoy a well-earned break without having to embark on a long journey that could take weeks. Mini cruises have
also proved popular with guests wanting a few days away or experienced cruisers wanting to try a new ship before booking a longer holiday. Taster cruises operating last year
were:
The Future
Exciting times lie ahead for our company in 2019, starting with the first two of our next-generation ships coming into service between June and December. We are continuing to
build strategic stakes and partnerships in key areas and we are further investing in new destinations. Our strategy is to attract an array of guests by providing a wide variety of
itineraries to destinations worldwide including Alaska, Asia, Australia, Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal and New Zealand with cruise
lengths that range from two to 24 nights.
Interest in ocean cruising is projected to remain strong in 2019. Nearly half (48%) of non-cruisers expressed interest in taking an ocean cruise. Based on our planned fleet
enlargement and a focus on destinations, we intend to further extend our ability to serve our guests and to stay on the path towards becoming an even more global cruise line,
strengthening our presence in key markets. We believe we are well positioned to attract new consumers to cruising and to continue to bring loyal repeat guests back for their next
cruising holiday.
Prince Muchono Inkhanyeti High School Grade 8
