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The foundation of RCCL

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  #1  
Old 15th October 2005, 15:28
fred henderson's Avatar
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The foundation of RCCL

Royal Caribbean Cruise Line was indirectly founded as a result of one of the most disgraceful incidents in American maritime history.
Edwin W Stephan was manager of Yarmouth Steamship Co, one of the Jones Act protected American shipowners, operating rust-buckets on cruises out of Florida. Stephan was convinced that cruising would have great appeal to the American middle-class, provided they were offered safe, tailor made and well run ships. Yarmouth SS Co’s fleet did not meet any of these requirements. It owned two 5002 ton, 450 passenger steamships, which had been built by Cramp’s in 1927. On the night of 13 November 1965, a fire broke out in an unoccupied cabin on Yarmouth Castle and quickly spread throughout the ship. Forty minutes later when Finnpulp, the first rescue vessel arrived on the scene, Captain Voutsinas and the senior officers of the Yarmouth Castle abandoned ship and left their passengers and crew behind. The Captain of Finnpulp was so incensed at Captain Voutsinas’s behaviour that he refused to allow them on board. The 1930 built Eastern SS Co cruise ship Bahama Star arrived and the two ships managed to rescue 458 people but 87 lives were lost.
The Yarmouth SS Co announced plans to buy, or build, replacement tonnage and tried to continue with its remaining ship. It only averaged a 28% load factor however and the company folded in April 1967.
Despite this traumatic disaster Stephan retained his ideas for cruise success. He wanted three ships with compact, yet comfortable cabins, spacious public rooms and outdoor lido and sun decks. One ship would be employed on a 7 day itinerary from Miami to the US Virgin Islands via Bahamas and Puerto Rico. The other two would undertake 14 day voyages to the “real” Caribbean of the Lesser Antilles.
Stephen succeeded in capturing the interest of a Norwegian shipbroker. Norway is renowned for its family shipowning heritage. On the back of the tanker boom created by the six-day Middle East War of June 1967 many Norwegian companies were benefiting from very positive cash flows that were available for new investment.
The first to express interest in Stephen’s proposals was I M Skaugen & Co, who had operated in the post war emigrant trade to Australia until a decade earlier. Anders Wilhelmsen & Co also provisionally agreed to participate, although they had no passenger experience whatsoever, they had made a fortune by chartering their brand new 132,000 dwt tanker Wilstar in the spot market at the height of frenzy caused by the closure of the Suez Canal. The ship secured some of the most lucrative tanker voyage charters ever recorded, generating vast profits for Wilhelmsen.
Skaugen and Wilhelmsen were only willing to finance one ship each. Eventually it was agreed the two Norwegian companies would proceed, but that they would actively seek a third investor. After a thorough period of planning each company placed an order with Wärtsilä in September 1968 for a 16,000 ton, 700 passenger cruise for delivery in November 1970 and June 1971.
In January 1969 a new company was formed to operate the ships. After much debate the name Royal Caribbean Cruise Line A/S was chosen. A marketing and operations subsidiary was established in Miami. Edwin Stephan was placed in charge of marketing, Arne Wilhelmsen took over accounting and finance and all of the other senior positions were filled by Skaugen directors.
Finally Gotaas-L****n Shipping Corporation, an American based organisation with strong Norwegian connections, was persuaded to join RCCL. They had hesitated for some time but eventually agreed to be a silent partner. This enabled Skaugen to exercise the option they had from Wärtsilä Wärtsilä and RCCL’s important third ship was contracted for delivery in 1972.
One consequence of each of the ships having a different owner was that there was little commonality of style in the ships names. They were named Song of Norway, Nordic Prince and Sun Viking. What was the same however, was their unique “Viking Crown” lounge/bar mounted half way up the funnel. The first two were built for the bargain price of $13.5 million each and the third for $16.5 million. In 1971 RCCL asked Wärtsilä for a price for a fourth ship and the quotation was $22.5 million.
Thanks to very thorough planning, the start up of the service went smoothly for all three ships. The ships were soon sold out with very little advertising. Revenue rolled in and the initial cost of the three vessels was quickly repaid. The difficulty was that the tanker crisis of 1973 diverted the attention of the owners away from the cruise business. It was allowed to proceed on auto-pilot, whilst Carnival was beginning its rapid growth.

Fred
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Old 15th October 2005, 15:32
fred henderson's Avatar
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Quote:
Originally Posted by fred henderson
Royal Caribbean Cruise Line was indirectly founded as a result of one of the most disgraceful incidents in American maritime history.
Edwin W Stephan was manager of Yarmouth Steamship Co, one of the Jones Act protected American shipowners, operating rust-buckets on cruises out of Florida. Stephan was convinced that cruising would have great appeal to the American middle-class, provided they were offered safe, tailor made and well run ships. Yarmouth SS Co’s fleet did not meet any of these requirements. It owned two 5002 ton, 450 passenger steamships, which had been built by Cramp’s in 1927. On the night of 13 November 1965, a fire broke out in an unoccupied cabin on Yarmouth Castle and quickly spread throughout the ship. Forty minutes later when Finnpulp, the first rescue vessel arrived on the scene, Captain Voutsinas and the senior officers of the Yarmouth Castle abandoned ship and left their passengers and crew behind. The Captain of Finnpulp was so incensed at Captain Voutsinas’s behaviour that he refused to allow them on board. The 1930 built Eastern SS Co cruise ship Bahama Star arrived and the two ships managed to rescue 458 people but 87 lives were lost.
The Yarmouth SS Co announced plans to buy, or build, replacement tonnage and tried to continue with its remaining ship. It only averaged a 28% load factor however and the company folded in April 1967.
Despite this traumatic disaster Stephan retained his ideas for cruise success. He wanted three ships with compact, yet comfortable cabins, spacious public rooms and outdoor lido and sun decks. One ship would be employed on a 7 day itinerary from Miami to the US Virgin Islands via Bahamas and Puerto Rico. The other two would undertake 14 day voyages to the “real” Caribbean of the Lesser Antilles.
Stephen succeeded in capturing the interest of a Norwegian shipbroker. Norway is renowned for its family shipowning heritage. On the back of the tanker boom created by the six-day Middle East War of June 1967 many Norwegian companies were benefiting from very positive cash flows that were available for new investment.
The first to express interest in Stephen’s proposals was I M Skaugen & Co, who had operated in the post war emigrant trade to Australia until a decade earlier. Anders Wilhelmsen & Co also provisionally agreed to participate, although they had no passenger experience whatsoever, they had made a fortune by chartering their brand new 132,000 dwt tanker Wilstar in the spot market at the height of frenzy caused by the closure of the Suez Canal. The ship secured some of the most lucrative tanker voyage charters ever recorded, generating vast profits for Wilhelmsen.
Skaugen and Wilhelmsen were only willing to finance one ship each. Eventually it was agreed the two Norwegian companies would proceed, but that they would actively seek a third investor. After a thorough period of planning each company placed an order with Wärtsilä in September 1968 for a 16,000 ton, 700 passenger cruise for delivery in November 1970 and June 1971.
In January 1969 a new company was formed to operate the ships. After much debate the name Royal Caribbean Cruise Line A/S was chosen. A marketing and operations subsidiary was established in Miami. Edwin Stephan was placed in charge of marketing, Arne Wilhelmsen took over accounting and finance and all of the other senior positions were filled by Skaugen directors.
Finally Gotaas-L****n Shipping Corporation, an American based organisation with strong Norwegian connections, was persuaded to join RCCL. They had hesitated for some time but eventually agreed to be a silent partner. This enabled Skaugen to exercise the option they had from Wärtsilä Wärtsilä and RCCL’s important third ship was contracted for delivery in 1972.
One consequence of each of the ships having a different owner was that there was little commonality of style in the ships names. They were named Song of Norway, Nordic Prince and Sun Viking. What was the same however, was their unique “Viking Crown” lounge/bar mounted half way up the funnel. The first two were built for the bargain price of $13.5 million each and the third for $16.5 million. In 1971 RCCL asked Wärtsilä for a price for a fourth ship and the quotation was $22.5 million.
Thanks to very thorough planning, the start up of the service went smoothly for all three ships. The ships were soon sold out with very little advertising. Revenue rolled in and the initial cost of the three vessels was quickly repaid. The difficulty was that the tanker crisis of 1973 diverted the attention of the owners away from the cruise business. It was allowed to proceed on auto-pilot, whilst Carnival was beginning its rapid growth.

Fred
I am sorry that nanny will not permit Norwegian names. The missing letters are: Alpha; Romeo; Sugar; Echo!

Fred
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Old 15th October 2005, 16:58
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Fred,

Sorry for straying from your original topic. Your previous post could cause nanny problems if we ever start a thread on 'blocks'.

The top of a block - where the eye or hook is - is called the crown, the other end is the Alpha Romeo Sierra Echo, or tail!
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Old 15th October 2005, 22:24
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Quote:
Originally Posted by Gulpers
Fred,

Sorry for straying from your original topic. Your previous post could cause nanny problems if we ever start a thread on 'blocks'.

The top of a block - where the eye or hook is - is called the crown, the other end is the Alpha Romeo Sierra Echo, or tail!
Sorry Gulpers, I have spent too much of my life with foreigners who use Sugar instead of Sierra

Fred

Last edited by fred henderson : 16th October 2005 at 13:45.
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Old 16th October 2005, 11:01
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Quote:
Originally Posted by fred henderson
.......... foreigners who use Sugar instead of Sierra
Fred,

Hadn't even noticed that one ........ sweet of you to reply though!
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