Repeat pull from proven relationships plus room left

Royal Caribbean Cruises Ltd. (RCL) — this company's answers

The model's full reasoning — Q1 2016 call → NOWe need to analyze the transcript for two key elements: (1) existing customers/partners taking more on their own initiative, and (2) management conveying that these relationships are lightly penetrated with room to grow. Let's scan the transcript for relevant statements. - Richard Fain mentions "our guests are coming back in ever-increasing numbers" - that's about repeat guests, but is there specific expansion behavior? He also mentions "we have worked hard to educate and assist the distribution system there" in China, and "we have aggressively invested in ways to link us more directly with the end consumer" - that's about building relationships, but not necessarily existing partners taking more. - Michael Bayley on China: "We have been in the China market now for nearly nine years we've been investing in the market, building distribution, building our sales presence, building our relationship, and more importantly, building the brand, and building a good customer base." He talks about the brand being well received, but does he mention existing travel agents or partners expanding their commitment? He says "Customers come into the travel agents and request Quantum, request Ovation and request Royal Caribbean." That suggests demand from end customers, but not necessarily that the travel agents themselves are taking more capacity or expanding their relationship. - Adam Goldstein on Ctrip: "Ctrip is our partner in SkySea and we are very, very pleased to be in partnership with them. They are an excellent company, forward-looking, very much a fundamental part of the growing Chinese travel market and good partners we think for the long-term. SkySea, the name of the cruise line that is our venture with Ctrip will be coming up on its first anniversary in about three weeks. And so, she is a very, very young cruise line with one ship and doesn't have the kind of presence yet in the Chinese market that would even compare to Royal Caribbean International, as Michael has been discussing. So, we hope to build a different profile of client, the client that understands that this is a primarily Chinese-owned venture and we'll offer certain opportunities whether through technology or in the guest experience that will be differentiating in the marketplace. But it's very early days still.

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