Royal Caribbean Reports 2025 Q1 Results

Posted on 29 April, 2025 by Spacejunkie2

Jewel of the Seas visiting the Historic port of Liverpool, photo credit Spacejunkie2 Flickr

Royal Caribbean Group today reported first quarter Earnings per Share (“EPS”) of $2.70 and Adjusted EPS of $2.71, according to a press release.

These results were better than the company’s guidance due to stronger-than-expected pricing on close-in demand and lower costs, mainly due to timing. The company is increasing its full year 2025 Adjusted EPS guidance to $14.55 to $15.55. The increase in earnings expectations is driven by the better-than-expected revenue performance in the first quarter and the benefit of currency exchange rates and lower fuel costs for the remainder of the year.

“Our strong first quarter results are a testament to the enduring appeal and attractive value proposition of our leading brands and the incredible vacations they deliver,” said Jason Liberty, president and CEO, Royal Caribbean Group. “As we navigate the complexities of the current macroeconomic landscape, we remain focused on what we can control — delivering the best vacation experiences, optimising revenue, and managing costs, while continuing to invest in our future and drive further differentiation. With our industry-leading brands, state-of-the-art ships, exclusive destinations, and a fortified balance sheet, we will continue dreaming and innovating to win a greater share of the growing $2 trillion global vacation market.”

First Quarter 2025:

Load factor in the first quarter was 109%.
Gross Margin Yields were up 13.9% as-reported. Net Yields were up 4.7% as-reported and 5.6% in Constant Currency.
Gross Cruise Costs per Available Passenger Cruise Days (“APCD”) decreased 1.1% as-reported. Net Cruise Costs (“NCC”), excluding Fuel, per APCD decreased 0.3% as-reported and increased 0.1% in Constant Currency.
Total revenues were $4.0 billion, Net Income was $0.7 billion or $2.70 per share, Adjusted Net Income was $0.7 billion or $2.71 per share, and Adjusted EBITDA was $1.4 billion.

Full Year 2025 Outlook:

Net Yields are expected to increase 2.5% to 4.5% as-reported (2.6% to 4.6% in Constant Currency).
NCC, excluding Fuel, per APCD are expected to be 0.1% to 1.1% as-reported and (0.1%) to 0.9% in Constant Currency.
Adjusted EPS is expected to grow approximately 28% year-over-year and be in the range of $14.55 to $15.55.

First Quarter 2025 Results

Net Income for the first quarter of 2025 was $0.7 billion or $2.70 per share, compared to Net Income of $0.4 billion or $1.35 per share for the same period in the prior year. Adjusted Net Income was $0.7 billion or $2.71 per share for the first quarter of 2025, compared to Adjusted Net Income of $0.5 billion or $1.77 per share for the same period in the prior year. The company also reported total revenues of $4.0 billion and Adjusted EBITDA of $1.4 billion.

Capacity for the first quarter was up 3% year over year, and the company delivered memorable vacations to 2.2 million guests, a 9% increase year over year. Gross Margin Yields increased 13.9% as-reported, and Net Yields increased 4.7% as-reported (5.6% in Constant Currency), when compared to the first quarter of 2024. Load factor for the quarter was 109%. Net Yield growth exceeded the company’s guidance mainly due to higher pricing across key products driven by strong close-in demand.

Gross Cruise Costs per APCD decreased 1.1% as-reported, compared to the first quarter of 2024. NCC, excluding Fuel, per APCD decreased 0.3% as-reported (and increased 0.1% in Constant Currency), when compared to the first quarter of 2024.

Update on Bookings

During the first quarter, the company took record bookings during the WAVE season. Additionally, during April, the company’s bookings were greater than the same period last year, including continued strength in close-in bookings. Booked load factors remain in line with prior years and at higher rates. Guest spending onboard and pre-cruise purchases continue to exceed prior years, driven by greater participation at higher prices. To account for broader external factors, the company has expanded its guidance ranges in response to the complexity of the current macroeconomic landscape.

“Bookings for 2025 have remained on track, cancellation levels are normal, and we continue to see excellent close-in demand”, said Jason Liberty, president and CEO, Royal Caribbean Group. “This year continues our guest experience innovation with the debut of Star of the Seas, Celebrity Xcel, and the opening of Royal Beach Club Paradise Island by year-end – all of which continue to generate consumer excitement and strengthen our competitive moat.”

The cadence of yield growth throughout the year, as expected, is driven by the timing of new hardware entering service, with the arrival of Star of the Seas in late summer and the related ramp-up of load factors, as is typical for new ship launches.

Second Quarter 2025

Capacity in the quarter is expected to increase 6%, driven by lower dry dock days and a full year of Utopia of the Seas, compared to the second quarter 2024. Net Yields are expected to increase 4.4% to 4.9% as-reported and 4.3% to 4.8% in Constant Currency as compared to the same period in the prior year. The expected growth in yield is driven by healthy demand across all key products and onboard spend, both from new and like-for-like hardware.

NCC, excluding Fuel, per APCD, is expected to increase 4.1% to 4.6% as reported and 3.7% to 4.2% in Constant Currency compared to the same period in the prior year. Approximately 140 bps of cost growth is attributable to the timing shift from the first quarter.

Based on current fuel pricing, interest rates, currency exchange rates, and the factors detailed above, the company expects second quarter Adjusted EPS to be between $4.00 and $4.10.

Fuel Expense

Bunker pricing, net of hedging, for the first quarter was $655 per metric ton, and consumption was 423,000 metric tons.

The company does not forecast fuel prices, and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on current fuel prices, the company has included $286 million of fuel expense in its second quarter guidance at a forecasted consumption of 428,000 metric tons, which is 59% hedged via swaps. Forecasted consumption is 59%, 55%, 45%, and 15% hedged via swaps for 2025, 2026, 2027, and 2028, respectively. The annual average cost per metric ton of the hedge portfolio is approximately $487, $476, $393, and $426 for 2025, 2026, 2027, and 2028, respectively.

Royal Caribbean’s Allure of the Seas to Undergo $100 Million Upgrade

Posted on 8 August, 2024 by Spacejunkie2

The Allure of the Seas is set for a $100 million upgrade in April 2025, Royal Caribbean International announced in a press release.

The refurbishment, which is part of the company’s Royal Amplified refit program, will see the creation of new venues and features onboard.

For a complete picture of the drydock market, see the 2024 Drydock and Refurb Report by Cruise Industry News.

According to Royal Caribbean, after the update, the Allure of the Seas will offer more than 35 ways to dine and drink, as well as new bars, a new water park and upgraded pool decks.

The 2010-built vessel will also see the creation of new suites, as well as Royal Caribbean’s signature Ultimate Abyss slide.

The refurbishment will be completed ahead of the ship’s summer program in the Western Mediterranean, the company added.

Between April and October 2025, the newly amplified ship is scheduled to offer seven-night cruises to Spain, Italy and France.

“From the new Icon and Utopia of the Seas to now the more than $100 million transformation of Allure of the Seas, we’ve upped the ante threefold on the different ways vacationers can get away and make memories with Royal Caribbean,” said Jay Schneider, Chief Product Innovation Officer, Royal Caribbean International.

“Allure will be reimagined with the best of Royal Caribbean and what travellers love. Between new favourites, like the Pesky Parrot tiki bar, and experiences that unlock core memories time and time again, from an incredible pool deck to an unmatched combination of thrills and ways to chill, Allure will have even more of everything that makes it standout favourite,” he added.

First introduced in 2018, the Royal Amplified program included significant refurbishments onboard Voyager-, Freedom- and Oasis-class ships.

Allure’s sister ship, the Oasis of the Seas, was one of the vessels that underwent an “amplification” in 2019.

After debuting its new features in Europe, the Allure of the Seas is set to return to the United States in November 2025 for a series of six- to eight-night cruises to the Caribbean departing from Fort Lauderdale.

Royal Caribbean Increases Financial Guidance for 2024

Posted on 22 February, 2024 by Spacejunkie2

Independence and Symphony of the Seas in San Juan, Puerto Rico photo credit Spacejunkie2 Flickr

Royal Caribbean Group today provided an update on demand and updated its 2024 guidance.

The company said it continues to be very encouraged about the demand and pricing environment for 2024.

Since its most recent update on its Q4 2023 earnings call, the WAVE booking season has exceeded the company’s initial expectations, with the first five weeks of the year resulting in the best WAVE booking weeks in the company’s history.

“Bookings have been significantly higher than during the same period last year, with the back half of the year up by more than the front half. For 2024, all four quarters and all key products are booked ahead of the same time last year in both rate and volume. Consumer spending for onboard purchases continue to exceed prior years driven by greater participation at higher prices, indicating quality and healthy future demand,” the company said in a statement.

“Since our last earnings call, robust demand for our vacation experiences has significantly exceeded our initial expectations,” said Jason Liberty, president and CEO of Royal Caribbean. “As a result, we are increasing our 2024 guidance on stronger revenue outlook, and we expect to achieve all Trifecta goals in 2024. Trifecta marks an important milestone as we remain intensely focused on delivering a lifetime of vacations and priceless memories for our guests while delivering exceptional long-term shareholder value.”

As a result of the strong WAVE season, the company is increasing its 2024 Adjusted EPS guidance by $0.40 compared to its February guidance. For the full year, Adjusted EPS is now expected to be $9.90 to $10.10 driven by an increase in constant currency net yield growth of approximately 100 bps compared to the February guidance. Approximately $0.15 of the full year increase in adjusted EPS is driven by an improved revenue outlook for the first quarter of 2024. The company now expects to achieve all Trifecta goals in 2024.