Royal Caribbean demand is stronger than ever, and the cruise line is targeting more customers from multiple demographics.
The cruise line held its second quarter earnings call on Thursday, telling investors that cruise sales continue to increase.
Jason Liberty, President and Chief Executive Officer for Royal Caribbean Group, said that sailing purchases are still on fire.
"2024 bookings have consistently outpaced last year throughout the entire second quarter and into July, despite the fact that we have significantly fewer staterooms left to sell," he said.
Cruise bookings are quite a bit higher in the second quarter of this year compared to the same time last year.
In the second quarter of 2023, Royal Caribbean carried 1,900,810 guests at 105% occupancy.
In contrast, the second quarter of 2024 saw 2,040,242 guests at over 108% occupancy.
Throughout 2024, earning goals have exploded for the company.
Royal Caribbean announced today that the second quarter of 2024 earned $4.1 billion in revenue, and the cruise line is just getting started.
Cruising demand is higher than ever, particularly in North America
Thanks to several factors, demand for Royal Caribbean cruises is stronger than ever.
North American consumers, who represent 80% of the line's purchases, continue to be a robust market.
North American workers have 10% more vacation time than in 2019, and they're spending half of those extra days cruising.
Jason Liberty cited "a resilient economy, low unemployment, stabilized inflation, and record-high household net worth" as influences on the growing amount of bookings.
With more vacation time and the opportunity to relax, cruises are a great option to enjoy multiple destinations and amenities within one experience.
Royal Caribbean's research shows that consumers are spending more on travel than on any other leisure category.
Consumers prefer to spend their money on experiences, particularly travel and vacation.
Not only that, but buyers also intend to increase their travel spending over the next 12 months.
According to Liberty, "Cruising remains an attractive value proposition, and cruise purchase intent is high and continues to strengthen."
It doesn't look like spending on sailings is going to slow down anytime soon.
The booking window for cruises continues to expand—consumers are planning their vacations further out.
Royal Caribbean research also shows that cruisers are willing to pay more for the experience, so pricing (and brand revenue, as a result) is increasing for 2025 and 2026.
Cruisers are spending more and more on their sailings, buying more onboard add-ons than last year.
Pre-cruise add-ons like drink packages, WiFi, and shore excursions are optional, but currently in huge demand.
Guests are buying more add-ons than ever, both earlier before the cruise and at higher speeds.
Read more: When should you buy Royal Caribbean drink package, wifi, tours & other add-ons
According to Liberty, this translates "into higher satisfaction rates and higher onboard spending."
Thanks to higher spending and customer satisfaction, "Our market is growing and we are attracting more customers into our vacation ecosystem."
Guests who enjoy their first cruise with Royal Caribbean are likely to book more and bring friends and family along with them.
1 in 2 cruisers are a millennial or younger
Multiple Royal Caribbean strategies serve to attract multiple demographics to its brand, including a strong number of younger cruisers.
Half of Royal Caribbean cruisers are now millennials or younger, and they're not the only demographic increasing their bookings.
As the baby boomer generation reaches retirement age, more of that demographic is expected to cruise.
Royal Caribbean's research shows that retirees take 50% more vacations than non-retirees who are still working.
Not only is the baby boomer generation expected to cruise more, but they also serve to draw in the younger generations.
The baby boomer generation currently holds 50% of the United States' wealth but is expected to transfer its wealth over to the younger generations over the next two decades.
One form of wealth transfer is traveling together, with the baby boomers taking their younger family members on cruises.
Jason Liberty said that Royal Caribbean is already profiting "from that active and real-time wealth transfer through multigenerational travel."
Additionally, working generations such as millennials and Gen Z are benefiting from the 10% increase in vacation time.
Read more: Almost 1 in 2 Royal Caribbean cruise ship passengers are millennials
Younger generations intend to spend more time and money on travel than any other leisure activity.
Millennials and younger generations continue to make up a percentage of Royal Caribbean cruises "at a faster pace than any other generation," according to Liberty.
Today, one out of every two Royal Caribbean cruisers is a millennial or younger.
Shorter sailings cruising the Caribbean are one draw that serves to hook both new and younger cruisers.
Utopia of the Seas, in particular, a new and hyped Oasis-Class ship, entered the market by offering short Caribbean sailings out of Port Canaveral.
Short Caribbean cruises serve as an "on-ramp" for new cruisers to enter Royal Caribbean, "an important entry point" for those new to cruising or the Royal Caribbean brand, according to Jason Liberty.
Read more: Is a short cruise on one of the biggest cruise ships in the world a crazy idea?
Shorter sailings serve as a cheaper, faster taste of what Royal Caribbean has to offer.
Nearly 70% of guests on a short Caribbean cruise fall in the new cruiser or new to Royal Caribbean category and many of them are younger cruisers.
40% of guests in the younger demographic intend to book a short vacation in the next 12 months.
According to Royal Caribbean's research, 90% of guests who sail a short cruise intend to cruise again, and half of those respondents plan to return for a longer cruise.
"New to cruise customers are up double digits versus last year," Liberty said.
