Royal Caribbean Elevates Profit Forecast on Strength of Cruise Bookings, Higher Prices

Royal Caribbean Group announced better-than-expected first-quarter results provided the cruise company enough confidence to raise its annual profit forecast.

During the first quarter, Royal Caribbean reported total revenues of $2.9 billion, a net loss down $47.9 million, an adjusted net loss decrease of $58.9 million, adjusted EBITDA of $641.7 million and operating cash flow was $1.3 billion.

The cruise company credits “higher prices, continued strength of onboard spend and favorable timing of operating costs” for its improved results. Booking volumes in the first quarter were also higher than the corresponding period in 2019 and better than expected.

“First quarter results reflect continued strong demand for cruising and our teams’ focus on delivering the best vacation experiences that exceed guest expectations,” Royal Caribbean chief financial officer Naftali Holtz said. “We also benefited from favorable timing of operating expenses, as well as our continued focus on improving margins consistent with our Trifecta goals.”

Royal Caribbean revealed that occupancy in the first quarter was 102.1 percent, up from 94.9 percent in the previous quarter. Onboard and other revenue more than doubled to $988.6 million, making up about 34 percent of the total revenue.

As for the full-year outlook, net yields are expected to increase by 6.25-7.25 percent, as reported, and 6.75-7.75 percent in constant currency, compared to 2019.

“We knew that demand for our business was strong and strengthening, but we have been pleasantly surprised with how swiftly demand further accelerated well above historical trends and at higher rates,” Royal Caribbean CEO Jason Liberty said.

“Leisure travel continues to strengthen as consumer spend further shifts towards experiences,” Liberty continued. “Demand for our brands is outpacing broader travel due to a strong rebound and an attractive value proposition. We are increasing full year guidance, given the significant momentum in our business, and we are well on our way to achieve our Trifecta goals.”