Cruise News:  Amazara

January 2021 saw some notable ocean cruise news:  Royal Caribbean sold the Azamara brand.  Let's see what this all means.

Background:

For years, Royal Caribbean Group (RCL)  has maintained three primary brands marketed to Americans.  By far the largest is its namesake Royal Caribbean brand offering mass market cruises on a modern, large fleet featuring mega ships.  Royal Caribbean also offers the Celebrity brand - generally smaller ships in the "modern luxury" category as well as Azamara.  Azamara is a small (three ship fleet) line using the old Renaissance (R class) ships of about 700 passengers and emphasizing destinations with features like lots of destination over nights and special destination focused special events.  

In 2018, RCL purchased a controlling stake (67%) in Silversea Cruises.  Silversea is an ultra-luxury brand, competing with the likes of Regent and Ponant. Silversea has an expanding expedition segment as well. In the summer of 2020, RCL purchased the remaining portion of Silverseas.  Thus the sale of Azamara can be seen as both a way to finance Silversea, raise operational funding during COVID mandated shutdown and/or a way to focus on the three remaining brands.  Azamara fills a niche that RCL simply doesn't need to focus on.

Azamara

Azamara is being sold to a private equity firm named Sycamore Partners. Interestingly, Sycamore just purchased it's fourth R class ship, the Pacific Princess which will become part of Azamara.  Incidentally, Oceania just spent the last several years refurbishing their R class ships so don't expect any of these ships from being sold to Sycamore in the future.  The additional ship though, bodes well for Azamara as a growing, viable entity.  Having four very similar ships helps with operability flexibility as well as maintenance savings.

Azamara brands itself as "destination immersion" with cruises that focus on specific countries or regions, activities and local exclusive events.  Their smaller ships can go to ports not available to the larger mega ships and can dock more centrally in the larger cruise terminals of the world.

Photo courtesy of Azamara Cruises. A suite on Azamara Pursuit

What this means

The pandemic of 2020 has brought lots of pressures on cruise lines and the result is a resorting of priorities.  RCL focused on specific markets, Princess' parent Carnival continued to raise capital by selling old assets and Azamara emerged as an independent brand.  Private equity firms typically like to buy companies (or stakes in companies) at low prices, improve the company's cash flow, then sell at a higher price.  So its unlikely this is the last time you'll hear of an Azamara sale.  

Still, we think this will benefit Azamara and it's passengers.  Sycamore will put tremendous focus into operational excellence as well as making their Azamara's fleet as nice looking as possible.  When you're trying to sell an asset, you need to show positive performance and new booking backlog. That can only happen with an improving product.  Also Azamara will get full management attention, rather than be a step child to the larger RCL brands.

What's next

Azamara traditionally has offered some unique itineraries.  For that reason alone, they are worth checking out. For example, they offer a great circle Japan trip - which other lines have since copied.  They are generally all inclusive though not as inclusively as true luxury lines. For example, to get quality liquor or beer selection, the client needs to pay an upgrade charge, even though these "beverages" are advertised as included.  It will be interesting to see if they continue or change these policies.

More information:

• Here's a blog reviewing a cruise we did:  Azamara Quest - Caribbean cruise: Is it right for you?  
• Here's a general blog on Azamara:  New destinations await in 2018 and beyond
• Article with some details on Sycamore's purchase of the Pacific Princess.
• Article on RCL's sale of Azamara.

Not sure if Azamara is for you?  Contact your trusted travel advisor to learn more.