Royal Caribbean Group reported its fourth quarter 2023 earnings, along with a rosy outlook for the year to come.
The company took in $3.3 billion in total revenues for the fourth quarter of 2023, with a Net Income was $0.3 billion. For the year, Royal Caribbean Group had Net Income of $1.7 billion in 2023 following up on 2022 when Net Income was a $2.2 billion loss.
The earnings are better than expected thanks to a lot of last-minute bookings, strong demand overall, and higher cruise fare prices.
Just as importantly. the company is more excited for 2024 as it sees the potential for massive earnings.
A great 2023
Looking back at 2023, this was the bounce back year that Royal Caribbean needed.
About 7.6 million passengers sailed across Royal Caribbean Group's brands in 2023, compared to 5.5 million in 2022 and 6.5 million in 2019.
It was profitable enough to pay off approximately $4 billion of debt in 2023 while refinancing other debts to better position itself for the coming years.
On average, ships sailed at 105% capacity in the fourth quarter of 2023. Occupancy in the fourth quarter was higher than that of the same period in 2022.
A big year in 2024 is expected
So far, bookings in wave season are off to a "record start". This references the start of the year when interest in new cruise ship bookings are at its highest. They call it wave season because the momentum from the first few months of the year carries the company for the rest of the year as a wave would carry someone to shore.
Royal Caribbean had the five best booking weeks of the company's history since the third quarter earnings call, including the first three weeks of this year.
"As a result, the company is now in a record booked position in both rate and volume," the company said in a press release.
As has been the case for the past few years, a combination of increased demand and customers spending more on cruise ship add-ons is fueling this optimistic outlook.
"Consumer spending onboard and pre-cruise purchases continue to exceed prior years driven by greater participation at higher prices, indicating quality and healthy future demand."
Cruise fare prices and occupancy rates are both listed as higher in 2024 than in all prior years.
The company also pointed to exceptional positivity towards Icon of the Seas and Hideaway Beach expansion as two shining examples of the cruise market favoring this sort of demand.
Royal Caribbean Group CEO Jason Liberty issued a statement describing his view of why 2024 will shape up as a big year, "Demand for our brands continues to outpace broader travel as a result of consumer spend further shifting toward experiences and the exceptional value proposition of our products."
"We have exciting new vacation experiences in 2024, including the game changing Icon of the Seas, and have entered the year in a record booked position at significantly higher prices, further positioning us for a strong 2024."
