Calling 2023 an "incredibly strong year," Royal Caribbean Group CEO Jason Liberty said the cruise company had its five best booking weeks in history since its previous earnings call in late October.
Bookings have consistently outpaced last year, putting the company in its strongest booked position in history from both a volume and pricing standpoint, he said, although he declined to share a percentage of that booked position.
The company sees no signs of business slowing doing, he said, pointing to strong bookings at higher prices, along with high onboard spending. Guests are rebooking at twice the rate the company was seeing in 2019, Liberty said.
"There is nothing that we see in the booking environment or onboard spend that doesn't point towards acceleration," said Liberty. "There shouldn't be any concern at this time in terms of what we see that there's any slowdown occurring in our business Q2 forward."
The company has less inventory available to book in 2024 than it did a year ago and half as many staterooms left in Q1, he said.
Onboard spending and pre-cruise purchases have continued to exceed levels from prior years, he said, which he attributed to greater participation at higher prices.
Liberty said 70% of guests book at least one of their onboard activities before their cruise. Guests who purchase onboard experiences before their cruise spend about two-and-a-half times more than those who do not, he said. About a third of onboard purchases come through the company's apps, he said. The group has about 40% more precruise purchases booked in 2024 over 2023, he said.
Regionally, the company said European sailings "are nicely ahead of last year," rebounding after demand had softened following the start of the Israel-Hamas war on Oct. 7, said CFO Naftali Holtz.
Concerning the Red Sea, where shipping vessels have been under attack by Houthi militants in Yemen, the group said it has contingency plans for a couple of ships still scheduled to sail in the region after rerouting one earlier this year.
Royal Caribbean earns $1.7 billion in 2023
Royal Caribbean reported net income of $1.7 billion for the full year, a major improvement from a net loss of $2.2 billion in 2022. The company fell short of besting its 2019 net income record of $1.9 billion.
For the full year, the group's revenue totaled $13.9 billion. Adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) was $4.5 billion.
In Q4, the company reported $300 million in net income, up from a net loss of $500 million a year earlier.
Q4 occupancy reached 105%, which is down slightly from the 2019 level of 106%, although Royal Caribbean Group's brands have added capacity since then. The company expects capacity for 2024 to climb 8.5% from 2023.
The company expects cruise costs to increase in the first quarter of 2024 by at least 7% due to increased drydock days and operation of the new Hideaway Beach on its private island, Perfect Day at CocoCay.