Royal Caribbean’s loss narrows as customers splurge onboard

Royal Caribbean logo is seen displayed in this illustration taken, May 3, 2022. REUTERS / Dado Ruvic / Illustration

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July 28 (Reuters) – Cruise operator Royal Caribbean Group (RCL.N) on Thursday reported a smaller-than-expected quarterly loss as bookings rebounded and travelers splurged on cabanas, spa treatments and watches while onboard.

The world’s second-largest cruise line operator is the latest company to report good results as travelers, free of restrictions related to COVID-19, spend heavily on rental cars, airline tickets and hotels. read more

Royal Caribbean Group Chief Executive Officer Jason Liberty said the Miami-based company continues to see that consumers are “willing to spend more than ever.”

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Onboard spending rose 30% across categories in the second quarter compared to pre-pandemic levels, the company told investors.

Shares in Royal Caribbean climbed nearly 5% to $ 36.61 in midday trading as the cruise operator also said it returned its entire fleet back to operations, which the Liberty called a “Herculean task.”

Liberty also said Royal Caribbean’s websites are receiving close to double the visits compared to 2019, and are generating a record level of direct bookings

The US Centers for Disease Control and Prevention this month stopped reporting coronavirus levels for cruise ships in a move considered the next step toward a full return to normalcy for embattled cruise operators.

The industry has been steadily moving toward full occupancy after a near 18-month shutdown, with demand from loyal patrons proving a silver lining for cruise operators that are dealing with higher fuel prices and record debt levels.

Affluent guests have shrugged off inflation to splurge at casinos and spas on the ships, partly making up for the blow from cruise operators’ occupancy constraints. Occupancy has not yet returned to pre-pandemic 2019 levels.

“Yesterday, we sold just one of our over-water cabanas for one day for $ 4,000 and we just see there’s just a lot of demand for these experiences,” Chief Executive Officer of Royal Caribbean International Michael Bayley said.

The cruise operator’s revenue was $ 2.18 billion for the second quarter, compared with estimates of $ 2.11 billion, according to IBES data from Refinitiv.

Net loss narrowed to $ 521.6 million, or $ 2.05 per share, from $ 1.35 billion, or $ 5.29 per share, a year earlier.

Excluding one-off charges, Royal Caribbean lost $ 2.08 per share, smaller than estimates of $ 2.20.

Royal Caribbean still said the spread of COVID-19 in Europe and Russia’s invasion of Ukraine have lowered its occupancy levels on cruises around the continent, which carry higher-than-average ticket prices.

The owner of Celebrity Cruises and Silversea Cruises brands forecast total revenue of around $ 2.9 billion to $ 3 billion for the third quarter, compared with estimates of $ 3.03 billion.

It forecast per-share earnings to be between 5 cents and 25 cents for the third quarter, compared with estimates of 92 cents, due to higher fuel and food costs.

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Reporting by Praveen Paramasivam in Bengaluru and Doyinsola Oladipo in New York; Editing by Shounak Dasgupta, Maju Samuel and Will Dunham

Our Standards: The Thomson Reuters Trust Principles.


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