Strong pricing propels Royal Caribbean Group to record Q2 revenue

Strong pricing, strong close-in demand, continued strength in onboard revenue and the return of European cruisers drove Royal Caribbean Group to exceed its earnings expectations in Q2. 

Royal said the strong demand environment from Q1 continued into the second quarter, leading the company to increase pricing and narrow the gap between cruises and land-based vacations over the last several months. Royal reported a 105% load factors for the quarter.

“There are no indicators of softness. There’s really only indicators of acceleration,” said CEO Jason Liberty. 

The company’s yield growth was driven mostly by strong pricing and onboard spending on ships that have been delivered in the last five years.

The Caribbean remained a strong destination. However, Liberty said the company was particularly pleased with the strength of close-in demand for European itineraries, including from European customers who were slow to return in Q1. 

The company reported record yields 12.9% higher than in the same quarter in 2019. Total revenue was a record $3.5 billion, up from $2.8 billion in Q2 of 2019.

Liberty said the number of guests who were new to cruise or new to the company’s brands (Royal Caribbean, Celebrity and Silversea) “surpassed 2019 levels by a wide margin.” Repeat booking rates nearly doubled 2019 levels and website visits have doubled compared to 2019, he said.

Booking volumes has accelerated for 2023 and 2024, with most new bookings coming in for sailings in 2024, the company said. Bookings from travel advisors have surpassed 2019 levels, Liberty said. 

Investors had high expectations for the company’s earnings this quarter, and Royal’s report beat those expectations, said Patrick Scholes, a stocks analyst for Truist Securities, who said ticket revenue was better than expected. 

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