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Tawara Cruises 2018 Annual Report

Produced By: Ye Min Thura

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 following chart details our growth in cruise passenger cruising with children so the average age of a cruise
itineraries that call on approximately 200 destinations numbers (in thousands) over the past five years: passenger has therefore dropped.
on five continents. In addition to our headquarters in
Our cruises are positioned at the middle and upper end The average length of cruise taken by our passengers
London and Florida, we have offices and a network of
of the cruise holiday industry. They are generally dropped below 10 days in 2018 for the first time in
international representatives around the world which
characterised by cruises that are 14 nights or shorter nine years. Durations were shorter for both summer
primarily focus on sales and market development. We
and feature a casual ambiance, as well as a variety of and winter cruises primarily as a result of more short
believe cruising continues to be a popular holiday
activities and entertainment venues. Our brand appeals cruises being scheduled. These shorter cruises help
choice due to its inherent value, extensive itineraries
to families with children of all ages, as well as both attract guests who are new to cruising and will
and variety of shipboard and shoreside activities. The
older and younger couples. More families are now hopefully then return for longer voyages.

Our Fleet
We currently operate 10 ships with a capacity of order with a capacity of approximately 12,200 berths. expected to enter service in the second quarters of
approximately 16,150 berths. This count includes our These ships are scheduled to enter service in 2019 and 2021 and 2022, respectively.
two newest ships which entered our fleet in November 2020. Additionally, we signed a memorandum of
We are prioritising internet connectivity for our
and December 2018. We expect to introduce a further understanding to build two new ships which are
passengers in 2019 and are upgrading our systems and
six ships by the end of 2022. We have four ships on
technologies across the entire fleet. This investment

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will ensure that seamless, latest-generation onboard experience and provide guests with fast and memories with friends and loved ones even while at
connectivity is available to satisfy the needs of the reliable web access and the ability to share cherished sea.
modern-day holidaymaker. It will enhance the

Sustainability Commitment
We are making meaningful progress on our 2025 to ongoing reduction in air emissions and are We have also introduced industry-leading shoreside
sustainability goals focusing on our environmental expanding our investment in the use of low carbon technology to monitor real-time navigational
impact performance. This year we have reduced our fuels. All of our new ships will be powered by performance and energy use across our fleet.
unit fuel consumption by 28%. We remain committed environmentally friendly liquefied natural gas (LNG).

Cruise Pricing
Our cruise ticket prices include accommodation and a We earn substantially all of our cruise revenues from  Laundry and dry-cleaning services
wide variety of activities and amenities, including the sales of passenger cruise tickets and cancellation
meals and entertainment. Prices vary depending on fees. While many onboard activities are included in  Liquor and some non-alcoholic beverage
many factors including the destination, cruise length, the base price of a cruise, we realise additional sales
cabin selected and the time of year the cruise takes revenues from:  Photo packages
place. Our payment terms require an upfront deposit
to confirm a reservation, with the balance due prior to  Shore excursions  Specialty restaurants
the sailing. Our cruises are generally available for sale  Gift shop items Many of these services are available for pre-booking
at least one year in advance and often as much as two on the internet prior to embarkation. These goods and
years in advance of sailing. During the selling period  Casino gaming
services are provided either directly by us or by
of a cruise, we continually monitor and adjust our  Full service spas independent concessionaires, from which we receive
cruise ticket prices for available cabins based on either a percentage of their revenues or a fee.
demand, with the objective of maximising net yields.  Internet and communication services

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:

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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.

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