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PESTLE Analysis
PESTLE Analysis
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Table of Contents
Introduction
Royal Caribbean Cruise Limited was incepted in 1968 with its headquarters situated
in Miami, Florida. The Royal Caribbean is a global second-largest cruise organization that
has 42 ships in active operations within the games, leisure, and vacation industry. The Royal
Caribbean brand has affiliate brands such as the Royal Caribbean International, Celebrity
Cruises, Azamara Club Cruises, and CDF Croisieres de France. Also, the venture has an
affiliate brand – TUI Cruises – specifically meant for the German market with a viable
of February 5, 2014, the brand had a total of 41 active ships operating in over 490
destinations on 7 continents (Quelch & Rodriguez, 2021). The vision and objective of the
Royal Caribbean Cruises Line are vested in the need to empower and enable workers to
deliver the best vacation experience for consumers towards sustainable market share,
consumer retention, and viable well-being of societal dynamics. The venture is keen on
upholding brand reputation as well as availing consumer-oriented services within its market
without sacrificing competitive advantage. The venture is set to uphold maximum ethical
conduct for the ever-changing consumer needs and satisfaction dynamics (Papathanassis,
2017). The Royal Caribbean Cruise management affirms that it is upholding consumer
loyalty in service and product provision in a bid to progressively improve everything they
Statement Problem
The global market fluctuation is an integral predicament that affects the Royal
Caribbean Cruises strategic plan. Recession in global economies has lead to the inception of
online booking within the leisure and vacation industry. Transition and adaption of
an internal and external problem to Royal Caribbean Cruises. Mitigating the risk of layoff
and extra expenditure on operations transition is a viable problem within the organization's
operation market and consumer value demands. As a result, the financial and operational
peril stipulates that Royal Caribbean Cruises should not depend on one source of revenue; but
it should venture into diverse services and products provided to stabilize operational cost and
revenue. Also, the development of ships and ports is a global problem that affects Royal
Caribbean Cruises Lines in its operations. Expansion of market share and consumer cap
affects the strategic expansion due to stiff competition from other established brands in the
leisure and vacation industry. For instance, the “poop cruise” case depicts the public outrage
in which the Royal Caribbean Cruises Lines execute their operations based on the emphasis
on profits and minimal consumer safety and protection. As a result, the aspects of cruise
travel are becoming increasingly less safe and consumers are less protected by both the cruise
lines as well as the legal liabilities binding the service provider and the consumer. Thus; the
unprecedented disruptions in the Royal Caribbean Cruises Lines operations is a dire problem.
Analysis
PESTLE Analysis
The Royal Caribbean Cruises Lines PESTEL evaluation is a strategic metric vested on
the assessment of the macro environment for the venture. The need to evaluate a business
environment is integral in defining the direct impacts for the venture as well as key players in
the leisure, vacation, resorts, and casino industry. Through viable evaluation of the macro-
environment essence, factors that impact porter’s five forces will enable the company to
competitive market. The evaluation of Royal Caribbean Cruises PESTEL evaluation will
framework inception in a bid to determine the influence on a business operation and trade
how they affect the financial stability of the company operations. Social metrics evaluate the
social essence of the company markets and consumer demographics based on consumer traits
and lifestyle. Technological metrics evaluate technology and innovation impacts in the
consumer and venture markets and how they influence operations for Royal Caribbean
Cruises. The legal metrics framework expounds on the consumer and venture variation in
stipulations towards a neutral operations market to enhance legal consumption and provision
of services and products. As a result, the PESTEL evaluation factors are often beyond a
company's control and more so when they are eminent as threats to the sustainability and
business factors, opportunities that arise should be embraced to increase profitability and
productivity metrics.
Political Factors
Caribbean Cruises Lines. For instance, the easing of restrictions between the U.S.A. and
Cuba has mitigated the tension of allowing cruise ships to travel back and forth amid both
countries' destinations. The alternative to ease cruise navigation in both countries is a viable
political factor that is anticipated to increase market share and profitability metrics for the
venture. It is eminent that if both governments opt to turn down the restriction sanctions,
cruise navigation could be hindered. As a result, navigation sanctions are highly anticipated
to inflict fear on security concerns for consumers who may be willing to traverse between the
Cuban and American markets in the leisure and vacation industry. Also, terrorism is a
political concern that impacts the viability and feasibility of the Royal Caribbean Cruises
operations. For instance, the 2017 Seabourn Spirit Cruise ship attack by Somalia pirates
inflicted terrorism fears among stakeholders, investors, shareholders, and consumers globally.
campaigns to safeguard the progress of the vacation and leisure industry particularly ship
navigation across global destinations (Rossi, 2018). Thus, politically we must be prepared
pathways.
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Political Factors
Governance System
Regulatory Practices
Taxation frameworks
Wage Legislation
Global regulations
Change in Policy formulation &
implementation
Figure 2: Political Factors for the Royal Caribbean Cruises Operation (Source:
Author’s Illustration)
To mitigate the risk of political factors, Royal Caribbean Cruises should regulate its
diverse markets amid fluctuating political changes. The venture has a corporate responsibility
to minimize costs on penalization and fines by ensuring it copes with regulatory stipulations
across its diverse market jurisdictions. It is eminent that the Royal Caribbean Cruises have
depicted an increase in sales and marketing quotas through regulatory scrutiny. As a result,
the venture should comply with global regulations across its major destination markets to
uphold the market reputation, dominance, and reliability to consumers. The stipulations that
define visa regulation impositions across global destinations should be a priority since the
majority of the consumers are from the international market. The company should ensure that
the stipulations inflicting visa requirements for a consumer to sail on a cruise ship are
realistic and easy to uphold relatively across global markets. Through inclusive intervention,
the Royal Caribbean Cruises venture has been able to enact scrutiny measures to uphold
consumer safety and well-being during travel as a liability warrant. Additionally, the Royal
Caribbean Cruises Lines have benefitted from taxation policy changes that allow the venture
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to increase profitability ratios in a bid to foster research and development oriented operations.
Through wage legislation, the venture will be able to sustain its ships' registry with ease,
The legal policies that market countries enact dictate what is and is not allowed based
on domestic gains or priorities in controlling the leisure and vacation industries. The Royal
Caribbean Cruises Lines operates in more than a dozen countries, which expose itself to
diverse political essence and systems that risk its viability. As a result, the company is keen
pricing regulations, industrial safety regulations, and product labeling frameworks are
markets. Sequentially, the Royal Caribbean Cruises Lines are incepting mitigation measures
in averting discrepancy diversity across host countries that do not protect consigned trade
policies between partner countries. Through political intervention, the venture should incept
viable minimum wage rates, which are in return anticipated to increase profitability quotas;
Economic Factors
economics across the global markets. For instance, the operational costs for running a cruise
ship pose a financial threat due to fluctuation in the fuel markets globally. Based on Royal
Caribbean Cruises Lines CEO, Richard Fain asserts that the venture operations will remain
Figure 3: Economic Factors gap for Royal Caribbean Cruises Lines (Source: Author’s
Illustration)
The RCL venture required expertise employees with a suitable payment model that
matches the quality of service rendered. Failure of the RCL venture to meet demands and
needs for expertise employees will force the Cruise ships to hire employees with average
skills and sequentially the quality of service rendered will be of an average score.
Unemployment factors also have a basic impact on RCL operations. Rates of unemployment
determined the financial prowess of the Royal Caribbean Cruises Lines. Provided that the
consumers will be more conscious about their purchase power and spending behavior
(Lallani, 2019). Due to the financial crunch, when consumers minimize expenditure power it
means few people will be willing to travel for vacations, which directly affects the disposable
income for the venture. Without viable disposable income, the demand for vacation and
luxuries will decrease; thus, vacation or traveling will not be a priority among consumers.
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The business cycle metrics are integral for the economic trivial of the RCL. The
Royal Caribbean Cruises Lines should be keen on expansion, peak, recession, trough, and
recovery metrics to mitigate the peril of unprecedented disruptions across its operations. The
Royal Caribbean Cruise should apprehend the concepts of a business cycle in a bid to attain
prosperity against possible depression that is at stake. Furthermore, the rate of foreign
exchange rates is a crucial economical concern for RCL operations. Foreign exchange rates
and gaps are viable in determining suitable operational destinations that the Royal Caribbean
Cruise can include in its destinations. During vacation or luxury trips consumers' purchase
power is vested on the foreign exchange rates, which determine the rate and willingness of
consumers to spend. As a result, the foreign exchange gaps will be vital for RCL as it will be
able to evaluate feasible tourism destinations that are more attractive in spending. Most of the
tourism destinations are reliant on the dollar variation in exchange rates; this expedites for
consumers to yearn for destinations where they get the value of their expenses, although if the
Social Factors
Societal settings will always determine the prowess and success of an organization.
Royal Caribbean Cruises Lines should incept contemporary social functions that serve the
distinct, viable, and appealing to every type of consumer to increase market share across
diverse societal settings. By considering diversity in social settings, RCL will be able to
increase its consumer base, which will increase profitability margins. As a result, RCL should
embrace cultural diversity through intensive capitalization to uphold consumer needs and
satisfaction across various markets. For instance, the Royal Caribbean Cruises Lines anthem
has been vested to sail to the Bahamas with the Pied Piper group. This expedites why the
venture is keen on appealing to change in culture in a bid to sustain its market position. To
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incept the cultural diversity framework, RCL has a corporate responsibility to ensure its
social strategic plan is acceptable across certain countries that are skeptical in gender roles
definition and ensure that consumer safety is upheld for culturally susceptible consumers.
Social Factors
Leisure Interest
Culture
Demographics
Health & Safety
Access to essential services
Figure 4: Social Factors for Royal Caribbean Cruises Lines operations (Source:
Author’s Illustration)
In a bid to appeal to millennial consumers, the Royal Caribbean Cruises Lines has
opted to spend over $120 million in transforming its Mariner of the Sea Cruise. The cruise
will have a sky pad and bungee trampoline, which is an integral demand by consumers as
result, the RCL should be keen on obtaining consumer preference that will aid in travel
planning for the venture across the global markets. Through the evaluation of consumer
preferences, the Royal Caribbean Cruise Lines will be able to determine the opportunity
feasibility upon which consumer segment can increase return on investment (ROI) and
profitability rationale. The venture will be able to determine plans for service improvement to
meet the ever-growing consumer demand. The Royal Caribbean Cruise Lines management
insinuates that if there is an increase in a shift for consumer needs, there will be
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differentiation in experience needs for consumers, which will cause more trouble for the
venture. As a result, the RCL venture must incorporate contemporary societal dominance
across its markets in a bid to reach out to every category in consumer needs and satisfaction.
Technology Factors
Technological factors are integral in the success of the Royal Caribbean Cruises
Lines; failure to adapt to contemporary change will affect RCL operations. In today’s world,
viable technological innovation is shaping the transportation industry. The Royal Caribbean
Cruises Line must evaluate competitor's technological innovation, its impacts, and the rate of
reliability and viable functionality with the constant changes in the technological market
New
Technology
Inception
Mobile
technology
Figure 5: Technological Factors for Royal Caribbean Cruises Line rationale (Source:
Author’s Illustration)
and sustainability in the RCL operations. In current operations, cruise ships have been
equipped with contemporary features such as remote check-in that allows consumers to make
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an online booking. The check-in feature eliminates the notion of lengthy and confusing
embankment processes. The Royal Caribbean Cruises has been able to integrate RCL WOW
bands that are used to open cabin doors, incept navigation maps across the ship for travelers
through the use of mobile apps that allow users to book dinner reservations’ while onboard.
Additionally, there is integrated technological modeling that allows users to access internet
savvy-oriented brand in a bid to increase consumer retention across global destinations. The
use of advanced contemporary technologies will be able to cut expense costs through the
integration of mobile technology and IT-related solutions onboard. As a result, the use of
technology by RCL has enhanced connectivity, reliability, and functionality in the overall
Legal Factors
The diversity in legal frameworks for the Royal Caribbean Cruises Lines determines
the robustness in protecting intellectual property needs for both the consumers and the
venture. As a result, RCL should evaluate its legal framework in line with the target market
legal confinements before incepting new markets to enhance viable competitive advantage.
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Anti-trust law
Health &
in resorts &
Safety Law
casinos
Consumer
Data
protection &
protection Legal e-commerce
Factor
s
Figure 6: Legal Factors Framework for the Royal Caribbean Cruises Lines (Source:
Author’s Illustration)
Legal policies will determine the efficacy in protecting employees as well as consumers on
board across various destination markets for RCL. As a result, the Royal Caribbean Cruise
Lines is keen on evaluating the quality of reasonable pricing strategy and consumer
protection as a legal framework priority in its operations. Thus, the inception of viable and
equal application of laws to enhance fairy treatment and equal opportunities for brands in the
leisure and travel industry is an integral concern for RCL across its global operations.
Due to global occupational health and safety peril, the RCL has opted to extend the
suspension of its sailing activities globally. The suspension of cruise sailings across global
destinations poses a risk in revenues and cash inflows, which has sought for the RCL to enact
capital expenditure mitigation to sustain its operations. Sequentially, the suspension of cruise
sailings across major destination markets affects the venture workforce. Reduced operations
expedite the RCL management to increase layoffs to cope with minimal operation costs that
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can sustain its productivity. Additionally, occupation health and safety peril has sought the
company goals, objectives, and strategic plan in technology and expansion into the global
market. With the reduction in operating costs as a health and safety concern, the supply
chains will be disrupted due to reduced demand and cash flows. Thus, the occupational health
and safety peril is an integral concern that has led to the cessation of cruising operations and
sequentially affected the ability to anticipate impacts of cessation on the RCL brand across
global markets.
Also, health and safety concerns affect the global and domestic economic variants.
Safety and health concerns impact customer confidence, which causes consumer
result, this will induce minimal cruise bookings, decreased cruise pricing, and low onboard
revenues. The recession increase due to health and safety concerns will impact the financial
condition for RCL, which will expedite low occupancy rates and adverse pricing frameworks.
The peril on health and safety concern will affect operation costs, which affect factors that are
beyond the RCL control affecting future profitability metrics (Radic, 2019). Therefore, if the
Royal Caribbean Cruises Lines fail to address the risk of health and safety concern, its
financial position and productivity could be adversely impacted to the extent of impairing the
the venture should mitigate strategic functions to uphold public relations and the company's
reputation in any crisis. For instance, fire breakout and travelers who may want to commit
today's world, the technology space has evolved, at times their travelers may want to have
their zoom or Skype sessions live while onboard; this requires amicable intervention more so
in a time of financial recession and inflation gaps (Tarlow, 2017). Additionally, the Royal
Caribbean Cruises Lines may encounter reduced travelers turnout, which poses low demand
for travel services. In such public relation incidences, the RCL would not want to ruin its
operations by portraying a negative public image to consumers across its global destination
points.
To deal with the media and public during an emergency, the Royal Caribbean Cruises
Lines should ensure it has a strategic, coordinated, and rehearsed social media framework. As
soon as the venture is exposed to an emergency it should be able to mitigate the risk as soon
as possible without affecting basic operations within the cruise. The social media strategic
plan should be swift in availing a steady stream of information through conversation and
visuals to ease the mitigation of the emergency operation. Based on the RCL management, it
has the fastest internet at the sea; this expedites the need as to why embracing social listening
to correct misinformation will be viable. The emergency strategy depicts that crew members
have to be prepared for fire breakouts or bad weather while onboard. As a result, the RCL
strategic plan is concerned with the lives on the ship as the most important aspect than the
cost and how much damage an emergence could cost the company. Also, during an
emergency intervention, the company face should be on the front and center while mitigating
The Royal Caribbean Cruises can use its safety, health, and environmental track
record as a source of viable competitive advantage across global markets. Health, safety, and
environmental prowess are a shared corporate responsibility for every company. For instance,
RCL has incepted a public health modeling that is aimed at inducing a viable health state,
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healthy ship environment, visiting healthy shore environments, and availing medical-oriented
developments onboard. Every ship in the Royal Caribbean Cruises Lines has a unique
medical facility, staffed with qualified and certified nursing practitioners who work jointly
with medical doctors to execute health safety measures onboard. The idea to have a shipboard
medical facility for RCL that can be accessed by both crew and guest members is an
outstanding feature that positions the venture on top positions across global markets; hence,
enhancing competitive advantage. Additionally, while onboard the medical practitioners are
available on a 24/7 model to ensure that travelers have a fascinating experience and quality
services for their money. Although the health and safety onboard capabilities are not to the
travelers onboard.
The RCL has incepted an Outbreak Prevention Plan (OPP) aimed at mitigating the
risk of safety, health, and environmental concern for travelers onboard. Additionally, the
committed to upholding global environmental standards. RCL has been awarded the ISO
14001 certification for its viable save the waves environmental intervention. RCL has modern
practices in environmental impact mitigation technologies and initiatives across its fleet. The
and further reducing environmental impacts particularly in the sea (Hall, Wood & Wilson,
2017). For instance, the RCL fleets have incepted technologies to adjust and optimize ship
speed to increase fuel efficiency. The ships are designed to re-use engine waste heat to heat
water for showers and galleys for travelers’ consumption while onboard. The integration of
an advanced emissions purification model enhances the treatment and cleaning of exhaust
gases to minimize air pollution across the sea. Furthermore, the RCL cruises integrate LED
and fluorescent lights to minimize energy use and production of less heat as an environmental
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concern. Additionally, the RCL has been able to keep wastes out of landfills by re-purposing
100% of its solid operational waste. Therefore, the option to reduce overall energy use,
opting for emissions abatement technologies and use of alternative fuels and energy sources
is a viable functionality that offers a competitive advantage for RCL against competitors in
Theory Application
development frameworks. The success and problem mitigation for RCL is vested on the
functionality of how it will sustain its involvement against competitors. The perils of market
medical care failure can be solved through integrated efforts. Theoretically, RCL should
sustain its operations despite the discrepancies at stake. For instance, the theoretical
mitigating production risk because it incepts striking and innovative modules. Additionally,
the motive theory to sustain production and service provision for the Royal Caribbean Cruise
Lines is anchored on the theoretical framework of practice in ply. The theoretical application
insinuates that the venture should be committed to a shared outcome in its operations. Two,
the valuation for modern contexts is mandatory to mitigate modern problems with modern
solutions. Three maximized potential for friction is meant to develop a workforce of dreamers
who are drivers in duty execution. Four, incepting friction in operational and functional
aspects for RCL services across its global markets. The need to replicate the RCL status quo
is viable in creating classic experiences for travelers and crew members. Lastly, the action of
frameworks.
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Possible Solution
across the global markets. To mitigate the risks at stake, the RCL should focus on expanding
its market to induce growth and development of the brand. RCL should enact a resilient
benefits program to increase consumer retention rather than opting for pricing-based
development criteria. RCL should utilize travelers’ response to sustain its marketing mix
amid global disruptions and fluctuations due to unprecedented discrepancies. The use of
segmentation in hiring and service delivery should be embraced. Through segmentation, RCL
will be able to define its hiring priorities as well as evaluate capable markets to expand its
operations towards sustainable profitability ratios. Additionally, RCL should move beyond
the use of travel agents to sell their services. Despite affiliate programs being viable in
building brand awareness, the use of travel agents is not necessary in today’s world due to
innovation that allows online booking functions with cheap and reliable metrics.
Implementation
The action plan for RCL should be vested in the need to protect health safety and
security, protect environmental operations and strengthen and support its workforce. The
Royal Caribbean Cruises Lines should embrace corporate policies to sustain a broad market
gap based on safety and security concerns for travelers and crew members. Continuous
improvement should also be embraced to uphold practices and programs that steer
Conclusion
Lines will be reliant on the global political, economic, social, technological, and legal
frameworks to attain success. The cruise industry has still much to grow in terms of
production and service delivery in the global vacation and travel industry. As a result, the
formidable anticipation for the Royal Caribbean Cruises Lines is that it will continue to
uphold its brand reputation and quality service provision towards exclusive traveler
competitive advantage.
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References
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Hall, Wood & Wilson. (2017). Environmental reporting in the cruise industry. Cruise ship
Lallani. (2019). The world on a ship: producing cosmopolitan dining on mass-market cruises.
Papathanassis. (2017). Cruise tourism management: state of the art. Tourism Review.
Quelch & Rodriguez. (2021). Royal Caribbean Cruises Ltd.: Safety, Environment, and
Radic. (2019). Occupational and health safety on cruise ships: Dimensions of injuries among
Tarlow. (2017). Cruises, safety, and security in a violent world. Cruise ship tourism, 236 -
257.