- Royal Caribbean Cruise Group raised its full-year guidance.
- Royal Caribbean reported growth in bookings during the second quarter from the prior period, especially from travelers booking closer to their departure date.
- CEO Jason Liberty told CNBC the cruise company is adapting to take advantage of evolving consumer preferences.
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As a result of robust cruise reservations, Royal Caribbean increased its full-year guidance on Tuesday.
From its previous earnings per share forecast of $14.55 to $15.55, the company now anticipates adjusted earnings of $15.41 to $15.55 per share in 2025.
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Traveler preferences are changing, according to CEO Jason Liberty, who also mentioned that more people are preferring experience-driven travel and taking more frequent vacations. According to Royal Caribbean, 75% of customers say they want to spend the same amount or more on leisure travel in the upcoming year.
“Our experiences are designed to meet these evolving expectations,” Liberty stated.
Compared to the previous quarter, Royal Caribbean recorded an increase in reservations during the second quarter, particularly from passengers making reservations closer to their departure date. With millennials and younger generations now making up roughly half of all cruise passengers, Liberty ascribed this trend to the increased number of younger cruisers. Additionally, Liberty stated that they are prepared to pay a premium.
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“In the weeks coming up to a sailing, the very few cabins that we would have left on each voyage, people not only were trying to get those cabins, but they were willing to pay considerably more money to ensure they get the vacation experience that they’re looking for,” Liberty stated in a recent interview.
With $4.54 billion in revenue for the second quarter, the company posted adjusted earnings per share of $4.38. According to projections published by LSEG, Wall Street had projected revenue of $4.55 billion and profits per share of $4.09.
The cruise line’s earnings increased from $854 million, or $3.11 per share, to $1.2 billion, or $4.41 per share, in the previous year.
In the meantime, the cruise company claimed that 2.3 million passengers took a Royal Caribbean cruise in the second quarter, a 5.8% increase in capacity over the previous year.
Nevertheless, Royal Caribbean’s stock dropped 5% on Tuesday.
The business reported that reservations for Star of the Seas and Celebrity Xcel, two of its new ships that are launching this year, are going well.
“The strong demand we are seeing across our new ships and land-based destinations reinforces that our strategy is working and resonating with today’s traveler,” Liberty stated.
Dawn Giel and Krysta Escobar of CNBC contributed to this story.
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