Good morning.
This is Josh Weinstein.
Welcome to our fourth quarter 2022 business update conference call.
I'm joined today by our Chair, Micky Arison; our Chief Financial Officer, David Bernstein; and our Senior Vice President of Investor Relations, Beth Roberts.
note be of forward-looking. please this remarks begin, will call I that our some on Before
Therefore, cautionary press statement must in I refer today's release. you to the
upward close Our as on to business an continues we gap the rapidly to XXXX. accelerate trajectory
XXXX already gaining our strong we to diems, on per exceeding fact, and revenue In return profitability. are we're momentum
team ships believe a islands members to start-up, with guests. our and back and step XX-month our footprint monumental journey restarting largest XXX,XXX over back, Taking reboarding world's X and what welcoming service, our unmatched million Alaska and unrivaled of portfolio this to in the private we while a X plus Yukon, all returning the port destinations year, XX we've nearly completed land-based be scale,
around sincerely for to see I thank world and determination teams completion. to global our it the sheer that, that took ingenuity the For through
built the the less a we during XXXX. Throughout credits. record-breaking constant in significantly record from XX-point quarter, in this, process, levels of have we fourth overcoming X% was levels we returned this quarter. per and per in another points We onboard the dollar in XXXX's quarter. of fourth each higher revenue fourth of revenue XX diems higher. impact, been on in the of aggressively than And X the cruise passenger higher growing for achieved XX% to future year than Without cruise XXXX this our sustained XX% would gap higher capacity XXXX, day And effect X% the XXXX, have service fleet full on the capacity to as occupancy points our quarter our top first reaching in dilutive
inflationary adjusted costs to through and our up We're per also up XX% of excluding increase high in ALBD living QX. in reduced worked the to in our and from mitigate as cruise constant not base in continue the QX we've in. restart We environment all the currency absorb sight of we've cost been impacts losing fuel XX%
ramped to significantly first-time and of improve, we've the support And and the been has XXXX continued sales been partners, percentage of drive smarter levels Thanks also work We've teams time advertising having our future up to amazing our to our demand. guests now. our trade this gap hard reduced shoreside already closing sequentially from headcount levels. for with working significantly some XXXX to
X the first Toscana Venture. Princess of We AIDAcosma, delivered finest including ship, Costa Discovery our Carnival for the luxury and expedition world, in stunning our as well new Celebration, Seabourn flagships brands, as
All of these ships were higher purpose-built returns. to generate
We game broke we do new Line, our to baseline. all be environmental impact while private working compared millions a Port to we much-needed time, vacation doing reduction destination, benefiting a XX% and while experiences best, Most in ground in our unforgettable items the delivering waste changer will importantly, which are carbon port and from unique our what minimize guests food X captured XXX to for islands guests. single-use X% ever destinations, exclusive on and reduction million less our with back which visits million at existing same Bahama Grand more than Carnival Cruise our from a and a to of intensity,
outside with And sourced in of North truly of guests we are global company a America those XX% XXXX.
tailor source offerings greater and Australia, allows brand our as markets America, carried believe brand the practically such in We in any than of carried U.K., that outside or we cruise more peers In the largest each North having and X us #X France portfolio the total. to fact, penetration loyalty our and Germany, gain is and and specific the those stronger the to of U.S. to Italy, Spain, strategy enabling profit. of our markets, foundation generate us experiences people
the Ukraine environment, this has uneven an the around European COVID that the war had reopening world are on there cruise direct of factors in in countries. the impact though, had travel of In outsized the on an current results; our aftermath have X and impact more
of trajectory, the for has most factors. are upward pace these brands exposed trailed on all of While an recovery our to heavily brands the those
guests. was deployment triggered of point non-North ago, reopening XXXX, has of through of Japan vast time, and and were X In guest representing closer Australia's lagging impact in felt XX% Baltics. for and of reopening XXXX. changes X/X particularly from our The of years The approaches sourced Costa's America million and we the American people XX% The Costa year came guests, anticipate Australia, Princess, Asia first North a At guests Princess' this be sourcing is majority guests will half where the in and multiple behind. markets continue these of is to as X these to
to has Of yet reopen. course, China also
highly in with Line to rightsize significant ships competitive Asia X successful to Costa's home This its in taken closer addition another less efficient with of deployments X from Costa removal core our the to brand. planned the operate presence with Given their previously This fleet Cruise to the we've a positions brand fleet. Costa markets ships Europe. Carnival ships with actions to year-round the pre-pause, transferring Continental focused announced in is smaller, on Costa well X
the encouraged the been volumes booking recent in for brand. by already Costa have strength We
fact, these booking navigate quarter fourth they Costa's booking first in month, XXXX of the markets curve. in the core for were above XXXX XXXX closer a of as volumes In and last quarter levels
in war remains the all Ukraine in for those concerning the regions. The and us especially affected
closer regions, German war greater consumer both for and uncertainty booking patterns. the weighed confidence impacts those on heavily the in resulting Costa AIDA, in brand, Given in our associated and have closer and proximity
decisions into new-to-cruise attract closer air deployment alternatives guests we've in and the where reduce the versus well the our helping where friction help bringing cruises, itineraries us that cost To originate to make duration to and believe a lower of made leaning guests live. by closer We manage, port a our this shorter as ships strategic home land-based of more more more well facilitate us travel, positions as overall booking guests to even value proposition environment. us
last our furthered fleet fleet of again This month the with including the coupled introduction ship Cruises in Carnival this when the dispositions cumulative quarter, Arvia have successful nearly capacity. the week. XX more of the of number result bringing addition of Celebration will our new pause delivery of efficient last and We ships, to since efforts for X/X P&O of larger, optimization just consisting
increase with revenues revenue contributing a growth differentiated going more durable to transformation generate along This an in real deliver on experiences and fleet to forward. associated estate even balcony resulted board in X-percentage-point available increase in cabins tremendous onboard
percentage greater also lower We inflation efficiency costs. percentage costs unit remaining operating mitigate will efficiency ship in points with benefit X fuel from level to that higher and X points help
start, will off generation The benefit great to York. creative a and the with program and for New been revenue Our confidence strong launch from of prospects also in building demand high is initiative. Venezia's met Style Carnival Italian having this Fun prices
AIDA and assets Overall, generate hold of thanks over weighted our and have growth excitement our towards and profitability highest XX-year XXXX compared just Cruises along revenue time. will X capacity P&O dividends path is no And X% ships build higher yields Carnival optimization capacity still XX our portfolio Line, strong in we'll as doubt in to XXXX. efforts, growth demand brands, Cruise demand delivered U.K. fantastic to There is to XXXX, returning we while from retaining the
year. than we Having thanks felt start XX% Princess full the Costa disruptions. Cruises said than source has of North capacity until given versus to XXXX, by absorbing its won't and that, significantly its in will that this source is will is transition more more XXXX, as our XXXX at there capacity the P&O heavily completely high in capacity benefits optimization XXXX. before market more more brand fleet core brand, be growth and are In AIDA Iona Arvia. program have ever capacity from of managing year, markets America, XX% the
to I've with overall As revenue brand I this on been mentioned road support maps. to strategies actively call, previous and drive their growth generation, on working and each the help
past the a our advertising authorized a awareness As significant and increase a in step elevate consideration this for should new longer with take we X/X term. including about to over to nearly to to up investment to draw of brands land-based quarter near and take and share This from those be cruise, our both I've XX% alternatives. position in drive we our particularly impactful result, where the demand activities, as XXXX guests
for exist, alternatives, including a where We value XX% advantage to the next newly strong investments season. continue are brands. in advertising we as to disproportionately frankly, alternatives significant higher particularly captured new plan to from bookings on to to several not important with we launched year should our campaigns marketing communicate land-based digital value increased land-based capitalizing season wave promote summer We creatives to XX% our that, year, head into gap the these
for status focus renewed of paused top-of-funnel sales vacations, on growing force. trade part in cruise recommending been rebuilding the off are every our we the our our and coming of demand a army Having ships advocates relationships through also a X better day, years,
On ensuring best launch and maximize utilizing revenue to sailing brands. pricing we to side, each from philosophies the are practices sharing revenue management across that is brand
robust from revenue Our consistently by sale cabin many initiatives packages streams to teams incremental supported bundled programs. on from are market higher more capturing as and approach value-add focused a upgrade such
the optimizing our of enhancing price the yield building ticket term combination term. to management revenue maintaining while and tools While for and near deliver occupancy, bottom and the long to we are back onboard strategies, line, in the demand integrity
and the Given not the most curve reaching pricing marketplace. are result which protocols this channels the the higher while are rates time into and and have American the year, levels in occupancy variant us of distribution close-in particularly higher achieve North booking still our from revenues, in These preserving friends the in like occupancy as that earlier caused the brand. higher beneficial of channels rates, bulk nature over leaned heavily our in and offered power opaque onboard by to effect disruption revenue for are onboard they the allow friction year, brands to Omicron family from general
the have narrowed a already following start Cancellation North now months, brands our nearing have pushed brands have Since curve narrowed improving lead the the relaxation the in while by in measurable gap month the This than out strengthened applies and our across we board. American the X curve EA that times. by booking pushed year, are lengthening XXXX the protocols. a and of have booking more the volumes globally out gap and seen trends Booking curve.
the many to our early a and We long-awaited given of ahead. to winter And still of the half and enjoyed Black climates. in half marking a booked certain is our consist a recognize not occupancy has first booking are strong restricted first implementing return-to-world of relaxation our lengthier more recent base season exotic Friday European to important December, and an of building It which activity momentum long in including much actuality, conducive deployments cruises the are for heavily cruises continued was much these flights, and strong prior protocols Cyber profiles XXXX environment. itinerary the Monday long-haul in start operating protocols. response to And into wave brands relies on from colder closer this to our deployment, of
expect first and as travel, summer. meaningful way play be itineraries expect per quarter improvement closer-to-home and promotions open bodes in we our XXXX our build for over further we to occupancies hone net XXXX of our activities. aspects on to more cruise reduced occupancy continue pull all gap markets we And back for Nonetheless, relax, as demand, the to on to to to protocols to overall diems revenue-generating and ticket our are historical channels to well even invest This positioned on to opaque continue to out, their brands drive price continue time. higher to we
per end costs provides the XXXX consumption ALBD with underlying to Normalizing sequential progress, fundamentals bottom as of business of XXXX of XX% operating currency XXXX our this year. should XXXX, a complementary effectively up to line. we adjusted set quarterly the sense changes us XXXX revenue of levels of ALBD a more industry-leading and our per to levels fuel which the reach better rival that quarter the for the in deliver On of expect improvement the basis, of and progress first through strength by and we fuel EBITDA price the
look spending cumulative actively managed investment we've expenditures, $XXX and billion. by spend a during by million million capital a $X.X hard XXXX, we to and over $XXX down beyond reduction and Turning XXXX of our annually taken at for reshaped
compliance, while well-being absolutely guests, to rates communities excellence of members we current environment, reprioritized protecting safety We have to serve. and in maintaining lists project the environment reflect our and and the team our commitment the hurdle and
Going balance our in cash sheet repair build will making flow are and over expected forward, accordingly. to new committed strength rigorous time disciplined using we and to be the decisions
We our or lowest order one several and our plus any X incredible have each We just ships is year expedition in XXXX. on in just expect XXXX ship second This for new decades. builds ships through delivered anticipate don't be years to Seabourn order new X luxury thereafter. XXXX in book
back Turning operating to our performance.
We and addressing near-term time. occupancy our per and net measurable post-pause revenue we the growth higher quarter improvements levels are expected effectively portfolio historically drive high in with to transition return challenges over reshaping as have pricing to diems been delivering first
in effectively communicate too land-based level point day to amazing and out, tracking of temporary convenience fast relative a by from of are good at personalized every experiences unparalleled price service an our deliver and and investing at and to day to ultra We in offering support way value we the vacation luxury. mass marketing alternatives sales momentum
And investment-grade remain time, we the bottom more and the industry-leading will this credit and focused on our growth revenue expenditure deleveraging driving strong return and free significant cost profitability. focused higher propel over to ROIC. ratings flow profile our Overall, capital on cash accelerating base and line support path that hits our us to generation, revenue
where our truly These last And our come skill way greatest and an few first our enabling push set we deliver an what for to has This profit wave are that built positioning the now operating long XXXX period armed a greater years always strong incredibly remarkable of a -- will us forward highlight asset. a the been and perseverance bulk they creativity, the with agility known, year, in amount have for of up people and we've are over short generate X help time. strong summer our to forward.
We're season year. even us looking efforts we our in years,
With call turn the that, like I'd to David. to over
