WSJ obituary / Edwin Stephan / Founder of Royal Caribbean ..........................
Nov. 14, 2019
Edwin Stephan Sold Sea Cruises to Middle-Class America
Founder of Royal Caribbean persuaded Norwegian shipowners to finance his vision
By James R. Hagerty
He grew up far from the sea, in Wisconsin, didn’t particularly like to travel and was prone to seasickness. Yet Edwin Stephan, who died Nov. 8 at age 87, was among the first entrepreneurs to see the vast potential for Miami as a base for cruises in the Bahamas and Caribbean.
Founding what is now Royal Caribbean Cruises Ltd. in 1969, he joined two other outsiders -- Knut Kloster of Norway and Ted Arison, an Israeli -- in persuading middle-class Americans that cruises weren’t just for the idle rich, or the “overfed and nearly dead,” as one of Mr. Stephan’s aides put it. Serving a mass market that didn’t exist in the 1960s, Royal Caribbean is now the world’s second-largest cruise operator, after Carnival Corp. , founded by Mr. Arison. Norwegian Cruise Line Holdings Ltd., founded by Mr. Kloster, is third.
World-wide, cruise lines carried about 28.5 million passengers last year. About 40% of those passengers were on Caribbean, Bermuda or Bahamas voyages.
Mr. Stephan, the shy son of an insurance salesman, had wavy hair and movie-star looks when he arrived in Miami Beach in 1954. He was looking for a bit of peace and warmth after a hitch in the U.S. Army, fighting in the Korean War and earning two bronze stars.
Once his money ran out, he went to a hotel school and worked as a bell captain in the Casablanca Hotel in Miami Beach. He later gained management experience at the Biscayne Terrace Hotel in downtown Miami. By 1965, he was general manager of a tiny cruise operator, Yarmouth Cruise Lines, operator of the Yarmouth Castle, a 38-year-old steamship partly made of wood.
Around 12:45 a.m. on Nov. 13, 1965, the Yarmouth Castle caught fire en route to the Bahamas. Most of the approximately 550 passengers and crew members were rescued before the ship sank, but 90 died. Gordon Lightfoot wrote a song about it.
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In Miami, Mr. Stephan, then 33 years old, was besieged by questions from reporters and Coast Guard investigators. “The airlines would be set up for something like this,” the Miami News quoted him as saying several days later, “but for a cruise liner to catch fire and sink -- this was a shocker.” A Coast Guard report in February 1966 criticized officers of the ship for failing to sound a general alarm and take firm action in organizing the crew to isolate the fire.
Mr. Stephan moved on, working with a partner to set up Commodore Cruise Line before leaving to found Royal Caribbean. Haunted by the Yarmouth Castle disaster, Mr. Stephan believed a cruise line should have new ships, designed for cruising in warm waters and built for safety.
In the cruise business of the 1960s, “nobody really had new ships,” he recalled later. He couldn’t afford them, but a ship broker introduced him to Sigurd Skaugen, who headed I.M. Skaugen & Co., a Norwegian shipowner. Mr. Skaugen agreed to provide funding for the first of several cruise ships to be delivered to Royal Caribbean in the early 1970s by a Finnish shipyard. As the cost of building ships grew, two more partners -- Anders Wilhelmsen & Co. and Gotaas-Larsen Shipping Corp. -- invested in the cruise line.
Early seven-day cruises on Royal Caribbean cost as little as $368 a person. Onboard entertainers included the comedian Henny Youngman and the opera singer Patrice Munsel. “It was sort of a Catskills at sea,” said Rod McLeod, who headed marketing. To bring in more customers, Mr. Stephan organized charter flights from California.
There was glamour: Ingrid Bergman christened the line’s second ship, the Nordic Prince.
And romantic comedy: “The Love Boat,” a TV series introduced in 1977, spurred interest in cruising. In the late 1970s, Royal Caribbean cruises were selling out so fast that the line expanded two of its ships by having them cut in half so that a new middle section could be inserted, increasing capacity to more than 1,000 from about 700.
Viking Crown lounges, wrapped around the ships’ funnels, provided 360-degree sea views and spurred drink sales. Mr. Stephan, who designed the lounges, said he got the idea from Seattle’s Space Needle.
The ships kept getting bigger. Royal’s Sovereign of the Seas, launched in 1988, could carry 2,690 passengers and had two swimming pools and a five-story atrium. Today the company’s ships can carry as many as 6,680 passengers each.
Carnival tried to take over Royal Caribbean in 1988 but was thwarted when Anders Wilhelmsen and the Pritzker family bought out other investors and secured control. Royal Caribbean went public on the New York Stock Exchange in 1993.
Edwin William Stephan Jr. , known as Ed, was born Dec. 15, 1931, in Madison, Wis. He studied mathematics, accounting and economics at the University of Wisconsin but didn’t finish his degree before being drafted into the Army.
At Royal Caribbean, he held various titles, including chief executive and vice chairman. When he retired in 2003, there was little fanfare. “It’s about time,” he told the Miami Herald. “I’m happy to see the company still in existence.”
Mr. Stephan was married to the former Helen Morin, his onetime secretary. She survives him, as do four children and three grandchildren. He enjoyed demonstrating his hook shot with a basketball and was a dedicated runner. One of his goals was to compete in a marathon at age 90.
He kept business trips as short as possible. In the 1970s, he flew to a board meeting in Oslo and insisted on boarding his return flight the same day.
Write to James R. Hagerty at bob.hagerty@wsj.com
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