During a conference call on February 1, Royal Caribbean Group stated that 2024 is poised to be the best year in the company's history from both a pricing and volume standpoint. 

In addition to record demand for their products from both new and loyal guests, they're continuing to receive positive sentiments from customers and claim that cruising remains an exceptional value. 

In fact, their bookings are twice as high as they were in 2019. This is due, in part, to a record-breaking wave season. Travel partners are also beating elevated expectations. 

"We continue to attract new customers into our vacation ecosystem and deliver the best vacation experiences, so our guests are highly satisfied and continue to rebook and return to our brands and products," said Jason Liberty, President and CEO of Royal Caribbean Group. 

Demand for 2024 builds on 2023

Despite the company's capacity increase of 8.5% with the release of new ships like Icon of the Seas and Celebrity Ascent, there's less inventory available to book in 2024 than one year ago in 2023. Additionally, there are only half as many staterooms left in Q1. 

What does this mean? You're less likely to score a fantastic last-minute cruise deal than you were in the past. 

"We continue to see particularly healthy demand from North America, where about 80% of our guests will be sourced this year," Liberty said. 

Alaska, in particular, has been performing well. This region accounts for 6% of the full-year capacity and 15% of capacity during the summer season. They've made some exciting changes to the Alaska deployment, too, such as sending the first Edge Class vessel, Celebrity Edge, to the Last Frontier. 

Of course, we cannot forget to mention Perfect Day at CocoCay. Roughly two-thirds of Royal Caribbean International guests sailing to the Caribbean will visit their private island in The Bahamas. Icon and Utopia, as well as the island's expansion with Hideaway Beach, will allow 3 million passengers to visit CocoCay annually. 

When it comes to onboard revenue, the increase has been fueled by pre-cruise purchases. Around 70% of Royal Caribbean cruisers book at least one pre-cruise add-on before their sailing, with about 1/3 of these purchases coming through the mobile app. 

"We already have about 40% more pre-cruise revenue booked in 2024 as compared to 2023," remarked Liberty. 

Standing shoulder-to-shoulder with these land-based destinations 

Royal Caribbean is trying to shift from offering traditional cruises to being a world-class multigenerational family option. 

Icon, specifically, has been a game changer. The company really focused on its target market to create a project that people are impressed with, as they feel as though they achieved that. 

With a ship like that sailing to Perfect Day with options like Hideaway Beach, they want to offer a multigenerational trip that rivals what you might find elsewhere. They've never seen such demand, pricing power, or reaction over a ship, proving that it's been extremely successful. 

"When you consider Orlando, Las Vegas, and all of these other land-based options, we really believe that with ships like Icon and Perfect Day [at CocoCay], Hideaway Beach, the coming of Royal Beach Club in 2025, [and] Utopia coming straight into the short product market to Perfect Day that we are really...[starting] to attract a lot of demand from those land-based options with a better quality product, more exciting product, and great price points," said Michael Bayley, Royal Caribbean International CEO and President. 

Read more: 8 things I love about Icon of the Seas (and 3 I didn't)

Red Sea update

Back in October, Royal Caribbean made the decision to cancel their 2024 Israel cruise season due to the ongoing war. At the time, they estimated that the decision would negatively impact their earnings for the year by three cents a share.

During the conference call on February 1, however, they said that while booking for the impacted itineraries was softer for a few weeks, they rebounded relatively quickly. Plus, bookings are now significantly higher than the same time last year!

Read more: Royal Caribbean cancels 2024 Israel cruise season

Finally, a long-awaited update on Allure of the Seas' dry dock

The second Oasis Class vessel was scheduled to undergo a $165 dry dock in 2020; however, this was indefinitely postponed due to the pandemic. Now, her long-awaited refurbishment is right around the corner. 

"We're always modernizing," said Liberty, "...the actions we took of Oasis [and] some of the learnings on Icon [are] going to be in the modernization of Allure of the Seas." 

Right now, Allure lacks some features that were added to Oasis Class ships starting with Harmony and Symphony of the Seas, including Playmakers and the Ultimate Abyss dry slide. The company has yet to reveal what will be changed.

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."

Royal Caribbean Group had a great third quarter for the year, posting a profit of $1.0 billion for the quarter, and a very rosy outlook for 2024.

Revenue for the quarter was at $4.2 billion, with net income at $1.0 billion.

The combination of a healthy profit and positive outlook seems to indicate good things to come.

Royal Caribbean Group CEO Jason Liberty sees a great third quarter as a catapult towards an even better 2024, "Looking ahead, we see accelerating demand as we build the business for 2024."

He indicated bookings are higher than all prior years and at higher rates.

Third quarter by the numbers

Bookings remained strong throughout the third quarter, significantly exceeding 2019 levels.  

Closer-in demand for 2023 sailings exceeded expectations, contributing to higher load factors at higher prices and higher onboard revenue for the third quarter. 

Consumer spending onboard, as well as pre-cruise purchases, continue to significantly exceed 2019 levels driven by greater participation at higher prices. 

Royal Caribbean Group saw better demand than they expected in North American and European itineraries, thanks to last-minute demand that lead them to ships sailing full and at higher prices.

Royal Caribbean's ships were booked at 110% for the quarter. A ship can be booked higher than 100% when there are third or fourth passengers in a cabin.

Lower operating expenses, as well as favorable timing, contributed to better-than-expected costs.

During the third quarter the company repaid $775 million of debt.

As of September 30, 2023, the scheduled debt maturities for the remainder of 2023, 2024, 2025, and 2026 were $0.7 billion, $2.3 billion, $2.8 billion, and $2.8 billion, respectively.

Accelerating demand for 2024

Demand for cruises has only gotten higher, and 2024 looks to be a banner year.

The company reported bookings for next year significantly and consistently outpacing 2019 levels. They're seeing ships getting booked up sooner and at higher prices, with their customers booking earlier.

They also reported the news of Royal Caribbean's new cruise ships (Icon of the Seas and Utopia of the Seas) and expansion of Perfect Day at CocoCay with a new adults-only beach, "has been excellent and further positions the company for strong yield and earnings growth in 2024."

"The performance of our business continues to accelerate, driven by strong demand and excellent operational execution," said Naftali Holtz, chief financial officer at Royal Caribbean Group.

Royal Caribbean Group reported its second quarter earnings on Thursday and reported stronger than expected earnings that forced the company to pump up its guidance for the year.

The company had total revenues of a record $3.5 billion, with net income at $458.8 million. Adjusted EBITDA was a record $1.2 billion and Operating Cash Flow was $1.4 billion.

Why the fantastic results? Demand was better all around.

The cruise giant is seeing higher prices for cruise fares for North America and European itineraries, along with a lot of its customers spending on extras, such as drink packages, wifi, shore excursions and more.

Consumer spending onboard, as well as pre-cruise purchases, continue to significantly exceed 2019 levels driven by greater participation at higher prices.

The better-than-expected results compelled the company to make a significant increase in the company's full year outlook for revenue and earnings.

Royal Caribbean Group CEEO Jason Liberty celebrated the results, "Our brands continue to fire on all cylinders, resulting in record yields and second quarter earnings significantly exceeding our expectations."

"Demand for cruising and our brands is exceptionally strong and we have seen another step change in booking volumes and pricing, leading us to now expect double-digit net yield growth for the full year. We also expect to achieve record Adjusted EBITDA per APCD and Return on Invested Capital this year and are well on our way toward achieving our Trifecta goals."

Breaking down the second quarter

Net Income for the second quarter of $458.8 million compared to a Net Loss of $(0.5) billion for the same period last year.

Higher Caribbean and European cruise fare pricing along with higher shipboard revenue drove the higher revenue. The average capacity for the second quarter was 105%.

Booking volumes in the second quarter remained significantly higher than the corresponding period in 2019 and at record pricing levels. 

"Demand for 2023 sailings has significantly exceeded expectations and bookings for 2024 sailings are up significantly versus all prior years at record prices. Demand from the North American consumer has remained incredibly strong throughout the year, and booking volumes from European consumers who are booking European cruises this summer have accelerated."

Cash situation

Between 2020 and 2022, Royal Caribbean Group took out a number of loans to keep the company going during the cruise industry shutdown.  Here's an update on paying them back.

As of June 30, 2023, the Group's customer deposit balance was at a record-high $5.7 billion.  

As of June 30, 2023, the Group's liquidity position was $3.7 billion, which includes cash and cash equivalents and undrawn revolving credit facility availability.

During the second quarter, the company generated $1.4 billion in operating cash flow and repaid $1.6 billion of debt

As of June 30, 2023, the scheduled debt maturities for the remainder of 2023, 2024, 2025, and 2026 were $1.0 billion, $2.0 billion, $3.3 billion, and $2.8 billion, respectively.

New cruise ships

Royal Caribbean Group has plans to spend $4.2 billion on capital expenditures, which usually are related to new ships or new construction projects.

The Silver Nova cruise ship was delivered to Silver Sea, and Icon of the Seas and Celebrity Ascent will be delivered later this year. All ship orders have committed financing in place.

Non-new ship related capital expenditures are expected to be $0.5 billion.

Royal Caribbean Group had such a strong first quarter results for 2023 that the company dramatically updated its expectations for the rest of the year. The cruise company's executives talked about what drove these kind of big numbers.

Royal Caribbean bumped its full-year adjusted earnings forecast by nearly 50%, which would result in best year ever.

As per usual, the top executives at Royal Caribbean Group spoke with Wall Street analysts to go over the results, and there's some interesting facts and statements for cruise fans.

Over the course of the hour-long call, Royal Caribbean Group talked about Utopia of the Seas, the opening of Hideaway Beach, how popular their product is right now, and what to expect with the China cruise market.

Here's what stood out to us in the earnings call.

North America is dominating the cruise market right now

If you want the 10 second summary of why Royal Caribbean had such a good quarter, it's that people from North America are booking cruises at a pace and price never before seen.

There was such high demand for Caribbean cruises in the quarter that it translated into more people sailing on each ship, while paying more for cruise ticket prices and spending more money onboard their ship.

It caught the company off guard, as Royal Caribbean Group CEO Jason Liberty noted they had expected a slower first quarter, "we thought the first quarter would be a transition period, we always expected the rest of the year to be strong. The fact that demand for the coming nine months is so much stronger than our already robust expectations says a lot about the strength of the consumer and the strength of our brands."

"While demand has been strong across all products and markets, we continue to see exceptional strength from the North American consumer. This strength, in combination with the incredible perfect day at CocoCay has resulted in record yields for our Caribbean sailings.

How strong were these bookings? The company says bookings outpaced 2019 levels "by a very wide margin" throughout the entire first quarter and into April.

Moreover, Mr. Liberty said the booking window "is now completely back to normal", meaning any reluctancy to book a cruise following the pandemic has eroded.

Europe is doing well too

While Caribbean cruises are super popular, European cruises are doing well too.

Royal Caribbean Group CFO Naftali Holtz talked about the numbers, "European bookings are nicely outpacing 2019 levels, with peak summer sailings trending particularly well in recent weeks."

He mentioned Odyssey of the Seas' European season in particular is, "attracting quality demand and rates."

Bookings for Europe might have been something the company worried about, but it's proving to be a great bet. Mr. Liberty shared, "for Europe, I think we were a little bit concerned going into the year, but because of our of our global and nimble sourcing model, we really have seen a surge in European bookings and we feel very good on how Europe is going to play out this year, but not to the level that we saw in the in the Caribbean."

Is Royal Caribbean holding back cabin inventory?

At the very end of the call, Mr. Liberty seemed to say that the inventory of cabins when a new sailing is released is not necessarily all the cabins at once.

A question was asked about how booking and inventory will be handled in the future, and Mr. Liberty talked about their process.

"We used to kind of put everything out there and all the suites would be sold basically right off the bat. And then you would kind of work your way down to the inside cabins," he said in answering the question.

"While now, we we hold back inventory, and we release it based off of our what are much more sophisticated revenue management models that we have today."

He did not get into any kind of specifics, but it's an interesting comment for consumers if indeed every cabin is bookable at once or not.

Utopia of the Seas will sail the Caribbean

Royal Caribbean has not announced where Utopia of the Seas will be homeported or where she will sail to, but we did get one tidbit that could point to where Utopia will be based.

Utopia of the Seas will be Royal Caribbean's sixth Oasis Class cruise ship, and will launch in 2024.

In talking about Perfect Day at CocoCay, Royal Caribbean International President and CEO Michael Bayley spilled the beans on one fact we can expect about the new ship.

"We haven't announced the deployment, but Utopia will also be going to Perfect Day," he said during the call.

This means Utopia will almost certainly be homeported somewhere on the east coast of the United States.

Royal Caribbean's ships don't visit CocoCay typically when based in Galveston, so that likely removes that possibility.

Mr. Bayley also said Utopia will be "coming online in June."

Royal Beach Club will open around summer 2025

Speaking of things we didn't know before, Mr. Bayley said when the new Royal Beach Club will open.

The Royal Beach Club at Paradise Island will be the first Royal Beach Club, which offers a curated beach day for an extra cost.

We knew it would open in 2025, but now it appears to be closer to the start of summer.

"Our intention is to have the Royal Beach Club open in towards the end of the spring, summer of '25."

The beach club's capacity will be around 2,500 to 2,750 passengers per day.

More passengers booking pre-cruise than ever before

It's not your imagination: people are booking more shore excursions, internet, dining, and drink packages than ever before.

According to Mr. Liberty, about two thirds of guests are now booking pre-cruise add-ons before their cruise begins. Compare that to 48% in 2019.

You can expect more features and updates to both Royal Caribbean's website and app in the near future, "while we have made a significant leap in our commercial capabilities, we are still in the early innings of our journey and will continue to add features and capabilities to our app and commercial engines."

New cruisers

In the first quarter, the percentage of guests who were either new to brand or new to cruise surpassed 2019 levels by a wide margin.

Mr. Holtz said customers new to Royal Caribbean Group brands as well as customers first-time cruisers all together "significantly exceeded 2019 levels."

Moreover, he emphasized that it's important to keep those cruisers, "at the same time, we also focus on making sure that they stay there and increase repeat rates."

China reopening in 2024

The one cruise market that Royal Caribbean has not resumed service yet is China, but the company is looking at mid-2024 for that to occur.

China was a major market for Royal Caribbean International before the cruise industry shutdown. According to Mr. Bayley, Royal was the top brand in the Chinese cruise market by volume.

"We're now more encouraged by all of the signals that we've had for our reopening in China in '24", Mr. Bayley said.

"We've now started to rebuild our sales organization in China and we expect hopefully by late spring, early summer to be back operating out of China '24."

"Our expectation is that this market will return to how it was pre pandemic."

"The value of a Chinese customer is very high when you look at their their the net revenue from a from a Chinese consumer it's typically around the same level as an American and slightly higher."

Last-minute cruise bookings help swing Royal Caribbean Group's financial fortunes towards a better place in the first quarter.

Royal Caribbean Group released its first quarter 2023 results on Thursday, which included better results than the company forecasted despite a net loss for the quarter.

The company had a first quarter loss of $47.9 million.

These results were significantly better than the company's guidance primarily due to strong close-in bookings at higher prices, continued strength of onboard spend, and favorable timing of operating costs.

Royal Caribbean Group CEO Jason Liberty said he was pleasantly surprised with the numbers, "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."

"Leisure travel continues to strengthen as consumer spend further shifts towards experiences. Demand for our brands is outpacing broader travel due to a strong rebound and an attractive value proposition," added Liberty. "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."

First quarter by the numbers

Total revenue for the first quarter was $2.9 billion, with a net loss of $47.9 million.

Overall capacity was at 102% for the quarter.  Capacity (load factors) can be over 100% when more than two people stay in a cabin (i.e. children).

Gross Cruise Costs per Available Passenger Cruise Days ("APCD") increased 8.2% as-reported and 8.8% in Constant-Currency, compared to the first quarter of 2019. 

Royal Caribbean Group had a better first quarter because of three reasons:

• Strong close-in demand for cruises (people booking more cruises close to sail date)
• Ships sailing with more people and at higher prices
• Lots of people booking things for their cruise onboard or online

Royal Caribbean Group reports it is generating significantly more bookings at meaningfully higher prices than in prior years, particularly from the North American consumer. 

In the first quarter, the company continued to benefit from multiple actions taken over the past several years to reshape its cost structure which is helping to offset persistent inflation.

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

As of March 31, 2023, the Group's customer deposit balance was at a record $5.3 billion.  

Big demand for cruises

The key detail in the first quarter results seems to be stronger than expected demand for cruises.

There was particularly strong close-in demand for Caribbean itineraries, which accounted for close to 80% of first quarter capacity of available cabins to book.

To put this in perspective, booking volumes in the first quarter were significantly higher than the corresponding period in 2019. 

Because of this demand, Royal Caribbean Group saw a record-breaking WAVE season, which drove up prices as well added more people onto cruise ships.

As a result, the company has adjusted its  full-year expectations for ticket and onboard revenue, as well as earnings. They're calling it a "significant increase" in the forecast.

In a statement filed today, the company expects to significantly exceed prior record Adjusted EBITDA, achieved in 2019. Adjusted EBITDA is a financial metric that includes the removal of various one-time, irregular, and non-recurring items from EBITDA (Earnings Before Interest Taxes, Depreciation, and Amortization)

Paying back loans

Between 2020 and 2022, Royal Caribbean Group took out a number of loans to keep the company going during the cruise industry shutdown.  Here's an update on paying them back.

During the first quarter, the company repaid $0.3 billion of debt maturities and generated $1.3 billion in operating cash flow. In the first quarter, the company issued $0.7 billion of 7.25% senior guaranteed notes due 2030 to refinance 2023 and 2024 debt maturities and extended $2.3 billion of its existing revolving credit facility commitment to April 2025. 

As of March 31, 2023, the scheduled debt maturities for the remainder of 2023, 2024, 2025 and 2026 were $1.8 billion, $2.3 billion, $3.7 billion and $2.8 billion, respectively.

New cruise ships

In 2023, Royal Caribbean Group will take delivery of three new cruise ships:

• Icon of the Seas
• Celebrity Ascent
• Silver Nova

All of these ships were ordered and financed pre-2020.

Royal Caribbean Group expects to spend about a half billion dollars on capital expenditures on non-new cruise ships.

Would they order more new ships? They only said that half a billion dollar figure does not "include potential ship sales or additions that the company may elect in the future."

Top executives from the Royal Caribbean Group discussed a variety of topics during the company’s fourth quarter earnings call on Tuesday.

Each quarter, Royal Caribbean Group hosts a call with Wall Street analysts to provide an overview of their financial results and share insights on the company’s growth and plans to come.

Here are the important takeaways from this quarter’s earnings call as it relates to how Royal Caribbean is doing and what their plans are for the rest of 2023.

Back to normal

Jason Liberty, Royal Caribbean Group President and CEO, discussed how 2022 saw the return to normal for cruise vacations.

“2022 was a challenging but successful transitional year. During the fourth quarter, demand for our brands accelerated. We delivered a record 1.8 million vacations, achieved a 95% load factor, and successfully returned to Australia for the first time in three years.”

In the cruise industry, load factor refers to the passenger capacity onboard Royal Caribbean’s ships. Most Royal Caribbean ships continue to sail at full capacity as 2023 begins.

Why do cruise vacations remain so popular? Liberty discussed how consumer preferences are shifting from goods to experiences.

“Entertainment and travel spend remain strong and the job market continues to show resilience. Consumer sentiment has improved and banks have recently reported healthy savings and continued resilience in credit card spending.”

Royal Caribbean Group’s products appeal to a broad range of vacationers, whether booking short getaways to Perfect Day at CocoCay or a luxury world cruise.

The company’s fourth quarter results clearly show that cruise lines are back to normal, and growth should be expected to continue in 2023.

More web traffic and more new to cruise than 2019

Royal Caribbean Group is seeing an influx of new cruisers to their brands, with the fourth quarter's new to cruise and new to brand mix above 2019 levels.

This growth can easily be seen when looking at Royal Caribbean Group’s website traffic. As Jason Liberty stated, “Growth in cruise search has outpaced general vacation searches, resulting in double the number of visits to our websites compared to 2019.”

More website traffic also means more traffic on the Cruise Planner website, with around 60% of guests making pre-cruise purchases in advance of their cruise. This translates into “more revenue, stickier bookings, and happy guests.”

Related: The Ultimate Guide to the Royal Caribbean Cruise Planner site

Liberty explained how increased website traffic has, unsurprisingly, led to a significant increase in bookings. “The seven biggest booking weeks in our company’s history all occurred since our last earnings call. Our commercial apparatus is full speed ahead and all channels are delivering quality demand above 2019 levels.”

Royal Caribbean Group expects to provide “amazing vacation experiences” to over 8 million guests in 2023.

Hideaway Beach update

As part of the earnings call, Royal Caribbean Group discussed what’s new for the company in 2023. Aside from new ships across Royal Caribbean, Celebrity, and Silversea is a new addition to Royal Caribbean’s private island, Perfect Day at CocoCay.

“We plan to launch Hideaway Beach in the fourth quarter of 2023,” Liberty stated, “an adult neighborhood making Perfect Day at CocoCay more perfect.”

Related: Guide to Hideaway Beach adults-only beach at CocoCay

Hideaway Beach is set to increase capacity at CocoCay by 3,000 guests, bringing the island's total capacity to 13,000 guests per day. Little details are known about the offerings and design of Hideaway Beach, but it will surely be a popular spot on the island for adults in search of a more tranquil atmosphere.

Demand for Perfect Day at CocoCay

Royal Caribbean Group estimates around 2.5 to 3 million guests will visit Perfect Day at CocoCay in 2023, and Royal Caribbean President and CEO Michael Bayley spoke of the island’s success.

“The demand for that product [Perfect Day at CocoCay] is exceptionally high. The demand not only is there from a volume perspective, but the rate is there and that rate has been going up again in a very healthy way.”

The popularity of Perfect Day at CocoCay has also led to increased spending for products and experiences on the island. While much of the island is complimentary, many guests choose to spend extra on add-ons like Thrill Waterpark, the Coco Beach Club, and private cabanas.

It’s no secret that prices for these add-ons have gone up since the restart of the cruising industry in 2021, but Bayley explained how “we’ve seen a great demand and a lot of resilience as the prices go up. So it’s a hit and it’s very successful.”

Want more Perfect Day locations

During the call’s question and answer session, Michael Bayley was asked about the company’s plans for opening additional Perfect Day locations around the world.

“We have an appetite for other such ventures,” Bayley answered. “As soon as we’re ready to make any other announcements, we will. Our intention is to continue to grow this piece of the experience for our guests.”

Thus far, Royal Caribbean has only announced one additional Perfect Day location: Perfect Day at Lelepa, which will be located in the small South Pacific nation of Vanuatu.

No new information was released about Perfect Day at Lelepa during today's call, but we can expect this island to be a major driver for bookings in the Australian cruise market.

People still spending a lot on extras

When the cruise industry restarted in 2021, Royal Caribbean noticed an increase in the amount of spending by each guest onboard. From specialty restaurants to drink packages and shore excursions, the company saw a sharp increase in the amount of cruise add-on purchases.

When asked whether or not this trend is sustainable, Michael Bayley explained how “When we first starting coming out of the pandemic and we saw this really strong, robust onboard spend, we wondered how long it would last for. It’s just continued to strengthen.”

With 60% of passengers booking pre-cruise purchases and 25% of the purchases occurring directly on the Royal Caribbean app, Royal Caribbean Group feels confident that this performance will continue throughout 2023 and into 2024.

Icon of the Seas best selling ship ever

Although the inaugural sailing of Icon of the Seas isn’t until January 2024, the ship was mentioned as an important business driver for 2023.

Michael Bayley discussed the incredible success of Icon of the Seas thus far.

“We opened up Icon of the Seas for sale a few months ago, and that ship has literally been the best selling product in the history of our business and has been absolutely outstanding in terms of the demand and the pricing that we’re generating for that product.”

Icon of the Seas is the first ship in Royal Caribbean’s Icon Class, the first new class of ships since the Quantum Class launched in 2014. The ship will feature a waterpark, family-oriented neighborhood, upgraded suites-only spaces, and an indoor AquaTheater entertainment space.

Related: Icon of the Seas: Itinerary, features, and more

In addition to new public spaces are new stateroom categories, the most elusive of which is the Ultimate Family Townhouse, a three-story cabin in the ship’s Surfside Neighborhood. Bayley mentioned how this cabin alone had incredible success with bookings.

“It’s only one category of room… but the Ultimate Family Townhouse that we sell on Icon is already 55% sold out for 2024 at an average price of $75,000 a week.”

Related: Guide to Icon of the Seas cabins and suites

Royal Caribbean Group believes 2024 will be a very healthy year for the company, and a big driver of success will be the launch of Icon of the Seas.

Lingering effect of Ukraine war?

As the Russia-Ukraine war continues in Europe, Royal Caribbean Group has seen several effects on their business offerings and demand.

The first lingering effect of the conflict in Ukraine is the deployment impact; cruises to Eastern Europe and the Baltics are still on pause.

The second effect is the war’s effect on energy prices in Europe. European consumers are encountering significantly higher energy costs than in the past, influencing consumer spending.

Jason Liberty discussed that despite the conflict in Ukraine, there is still great demand for European cruise itineraries, including demand from European consumers.

“Their propensity to cruise, their desire to go on a vacation experience is high. The value proposition for the cruise, as I noted in my remarks, that gap is still very significant.

“But I think that’s really where you see the effect. European consumers desire to go to the Nordics, desire to go to the Western Med, Eastern Med, which is really kind of fully open to them to experience, that demand is there.”

China cruise market re-opening

The final takeaway from today’s earnings call with investors is the state of the cruising industry in China.

Michael Bayley stated two impediments to the re-opening of the Chinese cruise market:

• A ban on cruising and group travel in China is still in effect
• Japan has a requirement that Chinese tourists must test for Covid-19 and could potentially be quarantined

The company is hopeful these requirements will be dropped during the first half of the year. Once these conditions are no longer in effect, the market will reopen.

“We’re thinking that it’ll be late 2023 and we’re kind of thinking that in 2024, probably, realistically, the China market will be back,” said Bayley. “But obviously that’s based upon how we understand and see the situation currently.”

China has been a highly profitable market for Royal Caribbean Group, so the company continues to anticipate the restart of the cruising industry in China.

Currently, Spectrum of the Seas, Royal Caribbean’s Quantum Class ship designed for the Asia cruise market, offers sailings from Singapore.

Royal Caribbean Group posted its fourth quarter 2022 earnings on Tuesday with a smaller-than-expected loss.

The company reported a loss of $500.2 million in its fourth quarter and losses of $1.12 per share, which beat Wall Street predictions of of $1.37 per share loss.

Royal Caribbean Group posted revenue of $2.6 billion in the period, which met analysts' expectations.

The better results were a result of better pricing on close-in demand, strong onboard spend, favorable timing of operating costs, and lower interest expense.

"2022 was a pivotal year as we successfully returned our business to full operations and delivered memorable vacation experiences to 6 million guests," said Jason Liberty, president and chief executive officer, Royal Caribbean Group.

"We also returned to positive Adjusted EBITDA and Operating Cash Flow by consistently growing revenue and controlling costs. Our teams have worked tirelessly to deliver the best vacation experiences, responsibly, and we are grateful for their extraordinary efforts."

Fourth quarter numbers

Here's a breakdown of Royal Caribbean Group's fourth quarter earnings:

Ship capacity (aka load factors) across the fleet were at 95%, with Caribbean sailings reaching 100%, and holiday sailings close to 110%.

For the entire year, load factors were at 85% full. This averages out every sailing, in every market, for the year.

Total revenues per passenger cruise day were up 3.5% as-reported and 4.5% in Constant Currency, compared to the fourth quarter of 2019.

Royal Caribbean Group incurred a $130 million hit as a result of a lawsuit stemming from the former owners of the cruise ship docks in Cuba. The company that owned a port terminal in Havana prior to the Cuban Revolution, sued the cruise lines under the Helms-Burton Act, which allows certain U.S. nationals with claims on properties confiscated by the Cuban government on or after Jan. 1, 1959 to seek compensation from the companies operating those properties.

Royal Caribbean Group said it, "continues to vigorously defend" against the lawsuit.

For the full year, the company reported Net Loss of $2.2 billion compared to Net Loss of $5.3 billion in the prior year. 

Predictions for 2023

The year started off quite well for Royal Caribbean Group with a record-breaking WAVE season, driven by strong demand. 

Demand is so strong that the company had its seven biggest booking weeks in its history since the last earnings call in November 2022.

Customers are returning to a more normal process of booking cruises in advance, which RCG sees as confidence for its business that the booking window returns to normal.

All those drink packages, shore excursions, and wifi purchases continue to exceed prior years driven by greater participation at higher prices, which the company sees as quality and healthy future demand.

North America sailings, many of which visit Perfect Day at CocoCay, are leading the way and are booked in line with record 2019 levels for the full year and ahead for the second quarter through the fourth quarter.

Bookings for European itineraries have been accelerating during WAVE and are now higher than 2019.

"Leisure travel strength continues as consumer spend is shifting towards experiences, with cruising remaining an attractive value proposition," said Mr. Liberty.

"The quality demand trends further exhibit the strength of our brands and the growing propensity to cruise."

A whole lot of people booked a Royal Caribbean cruise last week.

Royal Caribbean reported it has broken its own bookings record for the third time this year.

Because of the Black Friday shopping holiday, Royal Caribbean saw the single largest bookings day. That's in addition to what is now the cruise line's highest volume booking week.

Royal Caribbean had rolled out a lucrative sale to coincide with Black Friday and Cyber Monday, which has evidently resonated with customers who took advantage of the offer.

The new record broke the record set just a few weeks ago when Icon of the Seas went on sale. 

Icon of the Seas is set to debut in January 2024 and generated an incredible amount of intrigue when the new ship was revealed to the public. 

Clearly the first new class of cruise ship since the Quantum Class in 2014 created a fever among cruise fans who were eager to reserve a spot for themselves.

As you might imagine, Royal Caribbean is quite excited about the new high water mark for sales.

Royal Caribbean International President and CEO Michael Bayley celebrated the news, "This has been a year for the books at Royal Caribbean International, from the full return of our 26 ships to the first look at Icon of the Seas, the best family vacation in the world."

"Every milestone met is an accomplishment achieved, it’s a wonderful start to 2023 and we are excited for what lies ahead. We could not have reached this point without our loyal guests, valued travel advisors and partners, and the Royal Caribbean International team around the world."

2022 has been a comeback year for cruises

Following two years of bad news related to the cruise industry shutdown, 2022 has proven to be a winner.

In 2022, Royal Caribbean marked both the single largest booking day and the highest volume booking week in April, which was followed by another record-breaking single day of bookings with the opening of Icon in October. 

Carnival Cruise Line also reported it had a busy Black Friday when it posted a record Cyber Monday booking day that was 50 percent above volume for Cyber Monday 2019.

"The Cyber Monday sale activity showed consumer demand across the fleet, and we were particularly pleased with the booking activity for Carnival Venezia's new year-round service from New York, and our new extended six-month program for Carnival Magic out of Norfolk," said Christine Duffy, president of Carnival Cruise Line.

"Our very successful naming ceremony for Carnival Celebration on November 20 and all the media coverage it generated clearly kept Carnival top of mind as vacationers got started on their holiday shopping yesterday."

Demand for cruises is increasing

Royal Caribbean is seeing nothing but higher demand for cruises.

During Royal Caribbean Group's earnings call with investors in November, executives talked about the strong demand for new bookings.

"While 2022 bookings remain strong and on pace to achieve occupancy targets, the most notable change over the past few months has been a substantial acceleration in demand for 2023 sails," said Royal Caribbean Group Chairman and CEO Jason Liberty.

"We received twice as many bookings for 2023 sailings in Q3, as we did in Q2."

Naftali Holtz, Royal Caribbean Group's Chief Financial Officer, also talked about this increasing trend, "we're seeing the kind of booking activity and demand and enthusiasm for those products is increasing and accelerating."