Royal Caribbean Misses Quarterly Revenue Mark, Shows Optimism for 2022
The Royal Caribbean Group did not meet its estimates for quarterly revenue, but pent-up demand and growing expendable income has analysts optimistic for 2022 and beyond.
According to Reuters.com, Royal Caribbean became the first major cruise operator to resume operations from U.S. ports in June, but concerns about going on cruises during the summer surge of the fast-spreading COVID-19 Delta variant impacted bookings.
Royal Caribbean’s total revenue finished at an estimated $457 million in the third quarter as compared to the previous analyst estimate of $567 million. The cruise company recorded a negative revenue of $33.7 million a year due to refunds and cancellations.
Passenger ticket revenue was $280.2 million, compared with estimates of $498.8 million.
While the numbers missed the mark, Royal Caribbean officials said coronavirus vaccine requirements and stringent testing protocols have resulted in booking volumes improving, with 2022 sailings being booked “within historical ranges and pricing remains strong throughout the year.”
“As cases have come down, demand has come surging back,” Royal Caribbean Chief Financial Officer Jason Liberty said. “Consumers are showing their resilience and desire to vacation.”
“Although there are many uncertainties going forward regarding COVID-19, as well as cost and supply chain pressures, we continue our pathway forward and anticipate positive cash flow by spring of 2022 and generating positive earnings for the full year 2022,” Liberty continued.
Other highlights from the Royal Caribbean update include data suggesting that over 500,000 guests have sailed across the cruise company’s five brands since the restart of operations. The total is expected to top one million passengers by the end of 2021.
Royal Caribbean officials also announced that 50 out of 61 ships will have returned to service by the end of the year, while guest satisfaction scores and onboard spending per passenger are both at the highest levels in company history.