Perfect Day Mexico was on track to be a home run for Royal Caribbean Group before Mexico's federal government rejected the Costa Maya private-destination project over environmental concerns.
Based on public comments from Royal Caribbean about Mexico's decision, however, the cruise company appears to view it as a setback and not a defeat.
A spokesperson said the company respects the decision of Mexican authorities and that "we continue to believe in Mexico and are optimistic in the potential to advance our investment responsibly."
"Over the coming weeks, we will re-engage stakeholders to move forward in a way that delivers shared prosperity through the development of essential environmental infrastructure, the creation of thousands of local jobs, and community programs that support the people of Mexico," the spokesperson said May 20.
Royal Caribbean expects "to proceed with the project at the same scale," said Infinity Research analyst Assia Georgieva, who spoke with managers of the company after the Mexican government's decision.
She said Royal Caribbean believes it has the support of the local government in the state of Quintana Roo and that it has already upgraded the local water and waste-management systems. She noted the land was previously developed, making environmental concerns about impacts on natural areas less relevant.
A sequel to its crowd-pleasing Perfect Day at CocoCay in the Bahamas, the Mexico destination was positioned to energize the Western Caribbean cruise market.
But in late May, the Mexican federal government rejected the Costa Maya project over environmental concerns; the area is home to mangroves and is near the Mesoamerican Reef.
The country's secretary of environmental and natural resources, Alicia Barcena, announced the decision on May 19, and Mexico president Claudia Sheinbaum weighed in, as well, saying, "We must not do anything that affects that area, which has a very important ecological balance."
The government's opposition to Perfect Day Mexico followed public protest from environmentalists, including a Change.org petition that has garnered nearly 5 million signatures.
On May 27, Sheinbaum said the government was in talks with Royal Caribbean to explore whether another location would be suitable for the project, according to Mexican newspaper El Universal.
The $292 million property that Royal Caribbean purchased for the project is in the village of Mahahual. It is next to the port of Costa Maya, which Royal Caribbean also owns.
Big boost for Western Caribbean
Georgieva said Perfect Day Mexico would be a significant boost for Royal Caribbean's cruises out of Galveston. She expects cruises with Perfect Day Mexico on the itinerary to command higher prices.
"I think investors are clearly expecting this to proceed in some shape or form," she said.
Kristina Cooper, vice president of finance and administration for travel agency Travelmation (No. 56 on Travel Weekly's Power List), described Perfect Day Mexico as a key to growth in Western Caribbean cruising.
While the destination was too early in development to generate bookings, travel advisors had high hopes for the development. Royal Caribbean's plans called for nearly two miles of beaches, a waterpark with more than 30 slides, a lazy river and a 100,000-square-foot pool.
The Perfect Day model "really has changed the game in the Bahamas and Eastern Caribbean, and so I am hopeful that it will be able to bring that excitement and change the game in the Western Caribbean, as well," Cooper said.
She applauded Royal Caribbean's acknowledgement of the government's environmental concerns.
"I hope that the private destinations continue to expand, but I hope it is always done the right way and that these environmental impacts are kept top of mind, as they should be," Cooper said. "I think this is actually a great example for other cruise lines."
The pushback against Perfect Day Mexico is a rare obstacle for Royal Caribbean amid rapid expansion of its portfolio of private destinations.
In addition to Perfect Day at CocoCay, the company in the past six months has opened private beach clubs on Nassau's Paradise Island in the Bahamas and on the Greek island of Santorini. It plans to open the Royal Beach Club Lelepa on Vanuatu in the South Pacific in 2027.
The destination expansion complements the rapid growth of its fleet, soon to include a fourth Icon-class vessel, which are the largest cruise ships in the world.