The fuel surcharge, the elimination of SSS discounts for many cruises, the changes to the on board booking discount policy (remains to be seen how many cruises will be at 0%, 5% or 10%), the 16-19 employees laid off in their sales and marketing group, and the higher brochure prices are all about getting RSSC profitable. (They haven't been profitable for the last several years). They are the only cruise line (Other than Orient Lines in the Pacific) to levy a fuel surcharge for 2005. Their rush to change SSS polcies w/o talking about the benefits was made with a clear urgency to protect revenues first and foremost. Its also pretty clear to me that Ken Watson, evp of sales and marketing, is calling most of the day to day shots. Mark Conroy's star has faded due to continued poor financial performance of the business unit and the Diamond fiasco.

Change is not necessarily bad, its just tough to tell what other changes may be in the offing.

But my opinion is that taking all of the above into consideration coupled with a shrinking fleet, RSSC is in a high state of flux.

RSSC chose (or had to have) a strategy to conserve capital while they grew in capacity. It's a fine strategy when it works but usually results in higher costs down the road. By not owning ships outright (leasing or by joint ventures with V. Ships (yes, they own 50% og the Mariner, Voyager and Navigator)) ultimately RSSC has higher expenses than a line that does own their ships outright.

It's just hard to see how RSSC, with its drive to becoming profitable, is going to be able to continue to position itself as the value leader in the luxury segment. I believe those days are over.

What RSSC desperately needs is to articulate their vision and strategy for the future and they need to do it NOW.

Bill