Royal Caribbean Group has reported impressive third-quarter results that have surpassed expectations, showcasing the cruise giant’s remarkable performance amid ongoing challenges in the industry.

With bookings that significantly exceed the numbers seen pre-pandemic, Royal Caribbean is not just on course for a strong year but setting the stage for a year that will be the start of the cruise company’s recovery.

Royal Caribbean Group revealed its third-quarter earnings today, October 26, showing results that far exceeded the guidance from earlier this year.

Both onboard revenue and bookings made earlier to the sailing date showed a marked increase, resulting in an earnings release that sets the company up for a promising future.

Jason Liberty, president and CEO of Royal Caribbean Group: “The strength of our brands and the acceleration of consumer spending on experiences have propelled us towards another outstanding quarter and a robust 2023.”

Photo Credit: JHVEPhoto / Shutterstock

Liberty also mentioned the unprecedented demand for 2024, with bookings showcasing higher load factors than ever before, significantly higher than in 2019, the busiest year to date.

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Liberty: “The combination of our leading brands, the best people, and the most innovative fleet and destinations positions us exceptionally well to deliver on a lifetime of vacation experiences while creating long-term shareholder value.”

In the third quarter, the company made $1 billion in profit, which translates to about $3.65 per share. This is a significant improvement compared to the same period last year when Royal Caribbean Group only made $33 million, which was about $0.13 per share.

Royal Caribbean Group has set its sights on growing rather than maintaining a status quo. While the competition has made it clear they do not intend to build more ships in the coming years, Royal Caribbean is launching some of the biggest ships in the world in the next 12 months.

Revenues for North American and European itineraries outperformed expectations due to better close-in demand, increased occupancy rates, higher pricing, and higher onboard revenue. The company achieved a remarkable 110% occupancy rate for the quarter across the board. While some analysts might view this with some skepticism, the tide is with Royal Caribbean.

Royal Caribbean Cruise Ship (Photo Credit: marleyPug)

“Looking ahead, we see accelerating demand as we build the business for 2024. Our booked load factors are higher than all prior years and at higher rates, further supporting our trajectory towards the Trifecta goals,” added Liberty.

The accelerated demand comes from the fact that Silver Nova, Icon of the Seas, and Celebrity Ascent are all due to debut, with the latter two ships slated for delivery in the fourth quarter of 2023. Furthermore, Icon of the Seas is set to commence its revenue sailings by the end of January 2024.

On top of that, Royal Caribbean’s sixth Oasis-class cruise ship, Utopia of the Seas, will set sail in 2024. With the 236,860 gross tons cruise ship sailing on shorter 3- and 4-night cruises to Nassau and Royal Caribbean’s private island Perfect Day at CocoCay, the company has another revenue booster coming up.

Not only is RCL experiencing a surge in demand and bookings, but they are also taking significant steps to reinforce their financial position. In the third quarter alone, the company repaid $775 million of its debt, its credit ratings were upgraded, and it aims to pay off $3.5 billion in debt this year alone. 

Naftali Holtz, chief financial officer at Royal Caribbean Group: “Our strong performance and commitment to strengthening the balance sheet will allow us to pay off over $3.5 billion of debt by the end of this year.”

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Reacting to the promising results, stock prices for Royal Caribbean Group went up more than $3 today before settling down at the 3% increase mark, trading around $84 per share.

Royal Caribbean’s promising trajectory suggests a brighter future for the company and the cruise industry. However, the company is not out of the woods yet. With the situation in Israel and Gaza escalating and fuel pricing seemingly going up again, there are still factors that could hold the cruise giant back.

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