by Donald Wood
Last updated: 11:50 AM ET, Thu May 4, 2023
Royal Caribbean Group announced better-than-expected first-quarter
results provided the cruise company enough confidence to raise its annual
profit forecast.
During the first quarter, Royal Caribbean reported total
revenues of $2.9 billion, a net loss down $47.9 million, an adjusted net loss
decrease of $58.9 million, adjusted EBITDA of $641.7 million and operating cash
flow was $1.3 billion.
The cruise company credits “higher prices, continued
strength of onboard spend and favorable timing of operating costs” for its
improved results. Booking volumes in the first quarter were also higher than
the corresponding period in 2019 and better than expected.
“First quarter results reflect continued strong demand for
cruising and our teams' focus on delivering the best vacation experiences that
exceed guest expectations,” Royal Caribbean chief financial officer Naftali
Holtz said. “We also benefited from favorable timing of operating expenses, as
well as our continued focus on improving margins consistent with our Trifecta
goals.”
Royal Caribbean revealed that occupancy in the first quarter
was 102.1 percent, up from 94.9 percent in the previous quarter. Onboard and
other revenue more than doubled to $988.6 million, making up about 34 percent
of the total revenue.
As for the full-year outlook, net yields are expected to
increase by 6.25-7.25 percent, as reported, and 6.75-7.75 percent in constant
currency, compared to 2019.
“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,” Royal
Caribbean CEO Jason Liberty said.
“Leisure travel continues to strengthen as consumer spend
further shifts towards experiences,” Liberty continued. “Demand for our brands
is outpacing broader travel due to a strong rebound and an attractive value
proposition. 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.”
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