Royal Caribbean Group is having a record-breaking Wave season and
expects a return to historical occupancy levels by late spring, said CEO
Jason Liberty.
He said the seven best booking weeks in the group's history have all
happened since Royal's last earnings call in early November.
"We expected a strong Wave season, but what we are currently
experiencing has exceeded all expectations, even when considering our
capacity growth as a result," said Liberty.
While occupancy had been sluggish to return in 2022, Royal saw
continued improvement as 2022 wore on. Load factor for the year averaged
85%, although load factor climbed to 95% in Q4 with a high of 110% on
peak December holiday sailings. (Load factor is based on double
occupancy and can exceed 100% when more than two passengers occupy
cabins on a full ship).
The news came as Royal Caribbean Group reported a return to positive
adjusted earnings before interest, taxes, depreciation and amortisation
in the fourth quarter at US$409.3 million, coming in ahead of market
projections and marking progress in the company's return to normalcy
since the pandemic.
Liberty said the company is seeing particular strength in bookings
for North America-based sailings, which make up almost 70% of the
group's capacity this year. Those bookings are now booked at the same
load factor as they were in 2019 and at higher prices, he said.
Europe sailings are booked within historical ranges and also at
stronger prices, although recent bookings have outpaced 2019 levels, he
said.
The group is seeing strong Wave trends across all of its brands.
Those numbers have been strong from the North American market, but have
been picking up from European cruisers, too, he said.
Liberty attributes part of that strength to new guests. In the fourth
quarter, new-to-cruise and new-to-brand guests rose above 2019 levels
as consumer preferences continue to shift from goods to experiences, he
said. Meanwhile, interest in cruising has grown and resulted in double
the number of visitors to their websites compared to 2019.
Guests are booking onboard experiences well ahead
About 60% of guests booked some of their onboard activities in
advance of their cruise, which is double-digit growth in pre-cruise
purchases compared to 2019 and at significantly higher rates. Guests on
2023 sailings purchased their onboard experiences an average of more
than two months earlier than they did in 2019, he said.
Michael Bayley, president and CEO of Royal Caribbean International,
said the company had different theories about how long the strong
onboard spending that sprang from the pandemic would last.
"It's just continued to strengthen," he said, which he attributed to
new pre-cruise software to make it easier for guests to plan activities.
He expects that strength to continue into 2024.
Source: Travel Weekly