Digital Strategy and Transformation

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The better the question The better the answer The better the world works
Case Study

How digital transformation opened new channels for growth

With the physical limitations of their fleet holding back growth, EY helped Royal Caribbean create new digital revenue streams.

Case Study
The better the question The better the answer The better the world works
Case Study

How can digital drive growth when there’s no scope to expand?

As cruise passenger numbers are growing globally, Royal Caribbean is striving to meet increased demand and digitalize without downtime.

In the hospitality industry, fully booked rooms point to a thriving business. However, in this transformative age, it’s essential that businesses constantly monitor trends. Innovative companies know the minute they rest on their laurels is the moment they start to sink.

The challenge of duality — finding a way to maintain your existing business while developing new revenue streams in parallel — is acute. When you are reliant on physical space for revenue, taking that physical space out of service for upgrades and redesigns can present a significant business risk.

Royal Caribbean Cruises found itself in this position. The company has long been an innovator in their industry, particularly in maximizing the physical spaces on board its cruise ships to accommodate the ongoing significant global growth in cruise passengers (from 17.8 million visitors a year in 2009 to an expected 27.2 million in 2018).

The challenge the company faced was in finding new ways to drive growth and attract a new generation of customers in the digital age. While cruises may have a reputation for appealing to older holidaymakers, nearly 41% of cruise passengers in 2017 were under the age of 34 — and millennial passengers expect digital on-board experiences.

the past, the hospitality and leisure space had catered to growth by increasing capacity. Build more rooms and pools, and when space to build is limited, put on more shows and rethink your use of space to get more customers through the doors. For cruise lines in particular, such upgrade work can also lead to ships being out of service for months, making the work uneconomical.

“Our ship design and our guest experiences are all cutting-edge, but it was time to consider digital transformation, something we haven’t spent a lot of time thinking about in the past,” says Lisa Lutoff-Perlo, President and CEO of Royal Caribbean’s Celebrity Cruises division.

This is all too common an experience for CEOs, with EY finding that 50% of CEOs do not believe their companies have implemented the necessary steps to counter disruption. Failure to do so is putting market leadership and capitalization at risk.

Executing this kind of transformation is no small task. “The cruise business is an amalgamation of many different industries,” explains Cheryl Grise, EY Advisory Lead, Southeast Region. “It’s media and entertainment, health meets hospitality, and retail meets transportation. It’s all of those industries coming together — industry convergence at its finest.”

This meant EY had to tap into its knowledge and experience across multiple sectors and service lines to unpack and address the core challenge.

Person surfing on board a cruise liner
Case Study
The better the question The better the answer The better the world works
Case Study

Finding the right approach to exceed customer expectations

Looking at digital from every angle is helping Royal Caribbean to transform customer experiences and business operations.

“Often, EY clients will come to us, and they’ll say, ‘We want to rethink the customer experience in a new digital way,’” says Grise. “And as you start to probe and ask more questions, you realize they’re saying a lot more than that. What we realized is that they weren’t just asking for the customer experience to be digitized; they were also asking how to become a fully equipped digital organization.”

What Royal Caribbean had begun to understand was that true digital transformation is “an opportunity to rethink how to go to market and how to operate the entire business,” says Raj Mirchandani, EY Account Lead, Royal Caribbean Cruises Ltd.

The real challenge was how a floating city could transform itself digitally beyond the obvious — by thinking about digital from every angle, from end to end throughout the company’s entire business. And then to undertake this with a duality mindset, enabling existing operations to continue undisrupted even as the digital transformation got under way.

“People today expect the ease of technology in everything they do,” says Richard Fain, Chairman and CEO of Royal Caribbean Cruise. “They find it saves them time and effort, especially when on vacation, where time is one of the most important commodities they have.”

“This was an opportunity to think differently about connecting with their guests, with their employees and also with new revenue streams,” Mirchandani explains. Done right, this could lead to new ways of operating that provide not just what today’s digitally savvy customers expect, but something that fundamentally changes their perception of what it means to go on a cruise.

Moving beyond just meeting expectations

“Royal Caribbean and EY understood that the primary focus of this project was guest experience,” says Adam Goldsmith, President and Chief Operations Officer, Royal Caribbean. “It starts with a tremendous amount of attention to the on-board guest experience that the emergence of these digital technologies could make possible.” 

To help enable digitally savvy customers to have their most fundamental expectations met and maximize their vacation time, an app was conceived. Designed to connect with guests before, during and after cruises, it allows them to book and manage their time on board. Its core functionality was relatively simple but supported a seamless experience from the connected world of land to the internet-free open seas via an on-board local network.

In addition, by embracing other digital technologies, such as virtual reality, Royal Caribbean will be able to expand the type of activities it can offer on board without the need to take ships out of service for long periods of time to install new facilities.

Crucially, there is now a more radical underlying data-capture and digital infrastructure that offers Royal Caribbean a greater understanding of guests’ behaviors and preferences.

The SeaSeeker mask was custom engineered by Royal Caribbean, and allows the wearer to take and share photos while underwater.
Case Study
The better the question The better the answer The better the world works
Case Study

How digital can power greater customer experiences

Adopting a digital mindset is helping Royal Caribbean deliver more valuable customer experiences around the world.

Beyond delivering new digital customer experiences, Royal Caribbean has set a course for digital to enhance how it operates from end to end — throughout its business. By transforming itself to put digital at its core, it is not only becoming better-prepared to meet customers’ current digital needs, but it is also becoming capable of adapting to future technological disruption to its business and services.

The app makes it easier for guests to discover and book on-board activities, increasing revenue. But the data being generated will also help the company understand where it needs to focus its on-board resources to improve customer experience

Adopting a new mindset

At the heart of this project was the understanding that businesses must be prepared to encourage digital disruption within their own sector or face the consequences of disruption themselves and that businesses need to adopt the mindset of duality to cope — adopting new approaches and innovating in parallel to maintaining their traditional business models so that those business models can seamlessly adapt.

These values will be essential to the future success of all sectors, not just hospitality and leisure. Companies must develop the ability to critically analyze their level of exposure to disruption and their ability to initiate it.

By adopting a digital-first mindset in both customer experiences and business operations, companies can position themselves to adapt and improve into the future, as technology and customer expectations continue to evolve.

As Jay Schneider, Royal Caribbean Senior Vice President, Digital says, “Digital doesn’t disrupt our business but accelerates our business... we’re constantly as a company thinking about how to transform every aspect of the guest journey, whether it’s at home, whether it’s on board, whether it’s post vacation, and then the same thing for the crew journey."  

Royal Caribbean Innovation and Transformation Lead Joey Hasty sums up digital technology’s role: “If I do my job right, you won’t even notice the technology. You’ll just notice really amazing experiences.”

Customer eating sushi with VR headset on

What EY can do for you

Today's megatrends are reshaping the world, creating abundant opportunities and essential threats. Technology, globalization and demographics are the root of the megatrends shaping the world, creating unprecedented disruption across all sectors. 

We help businesses transform and evolve quickly to seize the opportunities and help mitigate the risks that digital transformation creates. To respond to these new challenges, companies need to:

  • See the future and define their purpose
  • Orchestrate, accelerate and unblock a portfolio of initiatives
  • Disrupt and create like a start-up
  • Design, build, test and iterate 
  • Plan, invest and scale up like a venture capital firm
  • Embrace transformation as a continuous way of working
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Case Study
The better the question The better the answer The better the world works
Case Study

How digital transformation opened new channels for growth

With help from EY professionals, Royal Caribbean’s digital-first approach is transforming their business and the cruising experience.

Case Study
The better the question The better the answer The better the world works
Case Study

How can technology transform the business of adventure?

Across its family of brands, Royal Caribbean prided itself on leading-edge innovation in ship design. It was time to bring the guest experience into the Transformative Age.

Cruise guests want maximum fun with minimum hassle

Time is precious, now more than ever. Almost every minute is assigned and accounted for in the hustle and bustle of the day.

So when people get a chance to take a holiday from their busy lives, they want a frictionless experience that supersizes the vacation fun and minimizes the hassle factor. They want a feeling of being away while at the same time having all the connected comforts of home.

For Royal Caribbean, this meant redesigning the entire customer journey and introducing a range of integrated technologies to bring the guest experience into the Transformative Age.

We’re always thinking about tomorrow, and that requires constantly looking to be the disruptor, not the disruptee.
Jason Liberty
EVP & CFO, Royal Caribbean Cruises Ltd.

Royal Caribbean saw an opportunity to provide a fully integrated shore-to-ship digital experience

Involving everything from zip lines to flow riding to ice skating, Royal Caribbean’s ship design has always been at the leading edge of innovation to attract a growing number of cruise passengers (from 17.8 million per year in 2009 to an expected 27.2 million in 2018). However, in looking at industries such as amusement parks, casinos and airlines, which have been offering mobile check-in and bespoke apps to customers for years, Royal Caribbean realized it had an opportunity to improve its ability to offer guests a fully integrated shore-to-ship digital experience.

The rapid pace of digital transformation has led to heightened customer expectations— and organizations know they need to innovate if they want to keep up. EY findings show that 50% of CEOs do not believe their companies have implemented the necessary steps to counter disruption. Failure to do so can put market leadership and capitalization at risk.

The risk of being disrupted

50%

of CEOs do not believe their companies have implemented the necessary steps to counter disruption.

To remain competitive on every level, Royal Caribbean recognized it needed to deliver a seamless connected experience on land and at sea that allowed their guests to get the most from their cruise experience. Understanding it needed the right partner, Royal Caribbean looked to EY professionals to help it cruise into the digital age.

Digital doesn’t disrupt our business but accelerates our business.

Jay Schneider

SVP, Digital, Royal Caribbean Cruises Ltd.

 

Moving from analog to digital required a radical technological rethink

When EY came onboard, Royal Caribbean was still in the early stages of its digital thinking. Guests had limited visibility to activities and amenities through a web portal and a minimalist app. Once aboard, they received a daily printed newsletter detailing the events, activities, restaurants and menus, shore excursions and ports of call for the day. Further, to participate in an event or excursion, guests had to line up and sign up with the crew on a first-come, first-served basis.

This analog approach was limiting, particularly for generations who were more accustomed to a digital-first mindset and were looking for a more streamlined and frictionless experience.

“People today expect the ease of technology in everything they do,” says Richard Fain, Chairman and CEO of Royal Caribbean Cruises Ltd. “They find it saves them time and effort, especially when on vacation, where time is one of the most important commodities they have.”

This was an opportunity for Royal Caribbean to think differently about connecting with their guests, with their employees and also with new revenue streams.

Raj Mirchandani

EY Consulting Account Leader for Royal Caribbean Cruises Ltd.

 

“This was an opportunity for Royal Caribbean to think differently about connecting with their guests, with their employees and also with new revenue streams,” Raj Mirchandani, EY Consulting Account Leader for Royal Caribbean Cruises Ltd., explains. “Done right, this could lead to new ways of operating that provide not just what today’s digitally savvy customers expect, but something that fundamentally changes their perception of what it means to go on a cruise.”

Of course, developing a digital experience that worked on ship and shore, across a fleet of 40 ships, was no easy task. The EY team needed to think about digital from every angle throughout the company’s entire business.

Royal Caribbean ship above ocean
Case Study
The better the question The better the answer The better the world works
Case Study

Providing experiences on-demand that are available with a click and a swipe

Out front and behind the scenes, the EY team is helping Royal Caribbean give guests control over every aspect of their voyage.

Facial recognition that speeds up boarding is just one feature of a new seamless customer experience

“Often, EY clients will come to us, and they’ll say, ‘We want to rethink the customer experience in a new digital way,’” says Cheryl Grise, EY Consulting Lead, Southeast Region. “And as you start to probe and ask more questions, you realize they’re saying a lot more than that. What we learned is that Royal Caribbean wasn’t just asking for the customer experience to be digitized; they were also asking how to become a fully equipped digital organization.”

From having guests check in using facial recognition to facilitate faster boarding; to informing them via text that their luggage had safely arrived in their stateroom; to exploring, planning and booking activities through an app that puts every onboard adventure for every age at guests’ fingertips, the EY team is helping Royal Caribbean create a seamless customer experience.

The guest experience gets a digital facelift

EY and Royal Caribbean professionals used data and analytics to create a personalization engine that gives guests mobile control over many different touchpoints in their cruising experience. Through the personalization engine, the app learns, tracks and helps crews respond to passenger preferences from the moment of boarding, providing recommendations based on their behavior so that guests can enjoy the adventure on their own terms.

Behind the scenes, teams of EY and Royal Caribbean technology, digital and business professionals worked together to solve the challenges associated with creating an uninterrupted digital experience, whether it was onshore through fiber optics, or through satellites while at sea.

Innovative digital technology works to detangle layers of backend legacy IT systems

As part of an evolutionary rebuild, EY professionals initially focused on reconfiguring Royal Caribbean’s IT systems so that they could recognize each guest as an individual, authenticate and offer intelligent personalization, and customize every aspect of their itinerary. The teams used mobile, cloud, machine learning, and data analytics technologies to detangle a complex, layered legacy technology infrastructure. The result — a rebuilt IT platform that is modern, scalable and resilient.

Intelligent personalization and integrated automation provide a more profitable cruising experience

What this means in real terms is that once a guest has downloaded the app, snapped a selfie and turned on their Bluetooth, the new app uses integrated automation and intelligent personalization to let them explore activities they’d be likely to enjoy. The app also allows guests to do things like pull up a drink menu and input an order, which a cruise employee later delivers directly to them with the help of beacon technology. In addition, based on information guests input into the app, it can automatically alert servers to any food sensitivities and allergies so that guests won’t have to worry about their health and safety while onboard.

Royal Caribbean Northstar observation pod
Case Study
The better the question The better the answer The better the world works
Case Study

The whole journey–transformed

Royal Caribbean’s digital transformation helps families have the best vacation time of their lives.

Beyond technology, Royal Caribbean reimagines its operating model to deliver experiences on-demand.

For Royal Caribbean, digital transformation means more than developing an app or deploying digital technology. It’s about changing the entire operating model and creating a digital mindset across the organization that focuses on providing a frictionless experience in every interaction for every guest.

The EY team positioned Royal Caribbean’s digital transformation journey to begin by looking first at the guest and employee experiences, developing a digital vision for the enterprise and making incremental changes to each. This will evolve to cover the whole end-to-end cruising experience — from booking to boarding to cruising. Meanwhile, the EY and Royal Caribbean teams are considering the employee experience and how Royal Caribbean can give them greater levels of engagement with purpose, as well as the digitally connected advantages cruise guests now enjoy.

If I do my job right, you won’t even notice the technology. You’ll just notice really amazing experiences.

Joey Hasty

Innovation and Transformation Lead, Royal Caribbean Cruises Ltd.

 

EY helps Royal Caribbean take a digital transformation journey that allows guests to enjoy their adventure, their way

When holiday-seekers set about booking a vacation, they are often overworked, overloaded and overtired. Their vacation is a chance to leave that burden behind — as much as they can.

With the EY team’s help, Royal Caribbean was able to realize its objective of offering guests a fully integrated shore-to-ship digital experience. A redesigned terminal experience supports facial recognition for faster boarding so that guests can start vacationing earlier. Integrated automation and intelligent personalization improve guest satisfaction, increase onboard revenue and lower costs.

Royal Caribbean’s digital transformation journey is a win-win for cruise guests and the company’s bottom line. Seamless, personalized experiences allow guests to enjoy their adventure, their way, while new in-app revenue opportunities lead the way for more profitable growth.

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