Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to Royal Caribbean Group's Fourth Quarter Full Year 2022 and Business Update Earnings Call. [Operator Instructions]

I would now like to introduce Michael McCarthy, Vice President of Investor Relations Mr. yours. is floor the McCarthy,

Michael McCarthy

Good morning, for business joining today you conference and fourth quarter thank our XXXX for and call. us everyone, full update year

Officer; Jason Joining Michael and and Caribbean our Miami here Royal President our are of me Chief Financial in Bayley, Executive International. Naftali CEO Officer; Holtz, Chief Liberty,

materially A during current get statements forward-looking from factors. uncertainties. well these our this are These started, as statements for note our of expectations Before as risks call. are number current release as like we of to any to that description We we're expectations. cause circumstances change. to on management's do SEC Please could morning the a this to earnings I'd refer making not and our subject forward-looking actual statements undertake with differ filings update factors based and issued to results

adjusted a can we be release which discussing certain non-GAAP our in www.rclinvestor.com. on non-GAAP available items measures, financial all earnings at and as are be website and of Also, defined, our found will reconciliation

update full strategic results the a booking of a Naftali and by fourth providing will update our on recap and and actions on Jason will the quarter the begin follow on an call with and latest environment. overview our business. year current

will for the your call then open We questions.

With that, I'm pleased Jason. call over to turn the to

Jason Liberty

everyone. morning, and good Thank you, Michael,

proud, I has express on started, business and normal. to behalf of organization, the want getting XXX,XXX Caribbean happy Before that to Royal we entire how returned our are Group

our you release morning, is business accelerating. in the as fact, saw In this

full the talking and detail So fourth into start let the get quarter the and XXXX. by about year off me

to as our was delivered Slide but a on to successful X business transitional X, we year operations challenging guests. vacations memorable As and million XXXX returned full highlighted

for with see successfully record on the above for the fourth and can and at Australia during our record satisfaction experiences were factor returned guidance. a were our million Slide than We scores operated occupancy and a vacations, normalized of was we EBITDA X.X when demand our in Pricing guest three delivered end vacation Adjusted for per XX% years. brands higher load to expectations and our X, adjusted loss accelerated. high the first As time achieved share quarter, XXXX you levels exceptional.

It year to Omicron, is of we returning in we our load midst XX%. below incredible just ships at were still consider and service, that one ago, to were the sailing factors we were

to demonstrate most full back and quarter full we EBITDA our fourth and are to back, industry. a incredible innovative vacations delivering usual that in cash fleet on back results the addressable flow of market, record to importantly, occupancy, the back year Our clearly back profitability, most number guidance back to providing to

entering with our and a We note finished XXXX operating full XXXX of commercial on strength are platforms. and high the

delivering the our thankful am foundation Our Caribbean the line the responsibly resume the window program. vacation provides Trifecta visibility strong our I needed so the of our in book best is with to executing along with position on Royal and us guidance, for proud booking which for well at the annual mission incredibly experiences growth. of normalization building and for Group everyone future of

see reported who and seeing vacations improved goods consumer robust and travel job of to Consumer the currently healthy their resilience. or credit lot experiences. I financially consumers has benefit share have and from continued market has Entertainment are to preferences shift continue strong that to our sailing the are remains are continues to sail to are recently engaged There been tailwinds excited highly card resilience sentiment booking talk Secular of of amazing who spend on about ships. to interactions dream Overall, what either daily demand, the show a healthy, as one state we want savings spending. on consumer, continue from brands. we consumers our in so and us banks with

in is to Our grow. and larger XXXX than continues addressable market

broad Day of Our we working is appeal exceptionally day the short And to attractive, a attractive gap. every a everything hard vacationers it said luxury have that with an to a are cruise. to getaway close to value remains I very from as range products past, Cruising too proposition. world Perfect and in

number searches, resulting Growth visits search to outpaced has websites in cruise the our to of in vacation XXXX. general double compared

levels. new-to-brand new are and our attracting brands above fourth XXXX new-to-cruise quarter mix Our customers into with vacation ecosystem

enhancing further book guests double-digit constantly onboard demand. higher at Approximately representing of our cruise, activities growth in compared their their can XX% We penetration purchase so commercial advance capture XXXX some to significantly of our quality when pre-cruise we rates. capabilities are of in

to As before, we they spending a when other double about $X.XX us guest sail over spends translates have into the compared said the overall every dollar guests. before cruise and when with

activities to are onboard earlier with much XXXX. guests now book in engaging Our us than

guests booked experiences sailings of on than more two translates XXXX. bookings earlier more This an guests. far, So revenue, average purchased in into XXXX stickier months onboard than and happy

demand Now what be WAVE can the record-breaking insight as described some environment I'll season. only and a provide into

very wide see Slide the during trends quarter strong throughout XXXX Weekend. with Cyber can you by X, As margin bookings on particularly levels outpaced fourth a

exceeded capacity WAVE but our strong considering experiencing currently what even are has growth. expectations when season, a all expected we We

a history the call. As highlighted our and result, earnings weeks since seven on last biggest all in occurred company's as our X, booking Slide

and delivering above Our all ahead, levels. commercial XXXX demand is full quality apparatus channels speed are

engagement level enhanced consumer preference Our direct-to-consumer digital supporting bookings. exceptionally well to channels perform record combination continue our capabilities is a as and of for

our travel encouraged strong also loyal with bookings XXXX continues above our levels. to supporting partners brands base that of recover are and We

trends the case, region. always As vary by

at for which higher and our XXXX capacity now are We at factor a strong booked load they were the these North standpoint, this prices. for cumulative itineraries seeing booking trends XX% particularly nearly of year. account sailings, as same in From American-based are

outpacing ranges XXXX rates recent are Our sailings within bookings levels. booked historical European with XXXX at better

guests of XX% North from continue our region. demand as almost to see come to healthy we particularly America expect from that We

shift to to guests. sourcing continuously Our appeal allow models highest-yielding sourcing global brand's and the us nimble

I milestone, with the we to levels a ramp record in another higher will us In spring. guests pricing then amazing in return our the which million XXXX. now further to vacation across global beyond load coupled record to we The X yields we and ramp-up XXXX, XXXX, is comment best-in-class experiences our fleet and deliver itineraries. first levels is late yields expect our deploy factors best factors positioning recover XXXX outlook improving environment, as fully important historical at to as in up for over load to of on our quarter,

revenue and growth new introduced strong yield This expect of demand outlook strong our our ships and growth capacity the driven core delivered Our performance increase to this by from by XXXX we with is XX% onboard set already new continued for be approximately to eight since three compared XXXX year, areas. hardware, more to products year.

will standard fourth experiences. will of Ascent. vessel which a vacation International will the Celebrity class first class. for of nine XXXX. marking Icon welcome Nova, wholly Caribbean Edge Silversea new a Silver welcome our ship first is of the And series brand years, take Seas, new Royal welcome the in for Each of brands new the to Cruises, will in delivery the ship, owned sure the Evolution set Celebrity

fourth of Day we to an making neighborhood, CocoCay in our plan incredible Hideaway quarter launch the in new and to Beach vessels, XXXX, addition more visitors adult-only increasing at island to In perfect XX,XXX capacity the Perfect daily.

the deepen relationship customer with Our will with journey XXXX. continue the to

costs. optimize our to capabilities commerce our guests enhance with connection deeper distribution customer further acquisition will lower We build a channels, and

further will our capabilities enhance guest focus increasing and repeat on and rate and We also our pre-cruise e-commerce spend.

increase capture excellence across platform. efficiencies continue the in excel and and We to order yields drive will to business our core in

for XX% teams years cost Our hard reshape structure would when at and in compared increase XXXX. per least cost APCD to otherwise over what have nonfuel our working to a been have been abate two

Net fuel, X.XX% global three-year That's versus that a cruise includes grow a costs, to versus expected of is XXXX. period inflation. benchmark significant excluding to X.XX%

movement costs such CocoCay approximately additional as as terminal. crew operations from costs cost structural the Galveston Our basis our points XXX full includes at outlook Day Perfect lingering year new for and of and transitional year such

been delivering the and guest have costs teams Our experience. controlling focusing best to on while enhancing profitability committed

to accelerate yield and record to adjusted deliver us business the and continue to allow expect EBITDA We in XXXX.

moderate performance. Our growth, proven for capacity to yield strong formula and cost enhanced unchanged: financial controls leads growth superior Moderate remains success profitability and margins,

while ESG Our decisions always towards daily active help profitability double digits our by and goals. long-term XXXX. by intensity carbon on will of financial our basis, ambitions achieving that continue inform a In reducing we ensuring responsibly XXXX, act efforts target our we strategic

retrofitting in the including milestones programs. our We also our on of also investing significant while a pathway, technology existing deliver expect reducing in mission new to on technologies fleet with ships, advanced decarbonization our and

to suppliers. tools supplier expand of utilize our ability diversity improve network to will an and exclusive We build

equity focus further physically our on inclusion employees are ensure will and healthy. We mentally diversity, improving and and

for program. To sets XXXX wrap the Trifecta our up, foundation

new delivering so Our executing vacations Trifecta people excelling to as hardware best our goals. to near-term on bright. is long-term and am our goals Royal relationships, deliver the at delivering achieving trajectory hard ability the our I our on core. doing of in records. and on be financial committed and are as while will in of future focusing and Group our XXXX, to strategic the responsibly our customer mission In best Caribbean The deepening destinations reach we confident growth pillars, and the well work

Naf. over will that, turn it with to And Naf? I

Naftali Holtz

good Thank you, morning, and Jason, everyone.

our Let for quarter. me begin by discussing the fourth results

a were per approximately billion, adjusted and Total the was of and share expectations $X.XX results above or was million XX, and end $XXX EBITDA of net loss you see guidance. revenue million, million per $X.X As share of our flow of above loss cash guidance reported again, at can range. Slide high The adjusted operating $XXX we our was $XXX expectation our $XXX or million net on loss $X.XX. of

vacation Fourth customer rates, cost revenue. expenses and cost interest lower and a continued strong of brands higher result quarter demand the onboard was of of strength lower lower for results. experiences, favorable to prices our close-in financial strong bookings acquisition categories, several continued also timing expense Better at management across contributed and outperformance fuel

Europe QX Load We by with sailings at the finished in averaging December in season at Australia, XX%. just factor the both late which fourth quarter at itinerary opened load factors with XX% under XXX%. varied peak XXX% and Caribbean holiday

XX% to cruise QX currency a flow. yield XXXX. improvement cash operating out EBITDA passenger per fourth quarter was compared $X.X revenue in transitional closed constant above quarter fourth and billion for we and as day of XXXX X.X% compared the up million significant million down X.X% total record was to revenue, of Total the a of the generated year XXXX, of successful adjusted decline $XXX our $XXX expectation. in and almost Net in

provide on business. now update an our I'll XXXX

capacity. with start Let's

Our overall regions, in in Antarctica. close capacity America of operate XX% 'XX to for XXXX about will XX% will and Nearly be on capacity will number other than XX% and the America-based itineraries, XXXX. our about North including of capacity will in a higher be will be remaining South The sail region. APAC XX% Europe

CocoCay, are forward our historical for which catching booked at at meaningfully visit are and are we the ranges and From a booked better amazing the remains our Europe with Perfect Day cumulative levels. ahead standpoint, XXXX the Sailings itineraries, to are Overall, book factor rates. line within ranges QX full narrowed and historical of within in North up. have America-based XXXX gap in for load well many year

far booking in the improved trends particularly these for seen and so UK. U.S. itineraries have WAVE, the We from

the our sourcing global continue, model. supported expect improvement We by to

normal. recovery net QX, Constant to with XXXX than yield vacation return QX higher our amazing in first growth on the The when load point brands quarters in spend experiences. four the of company, desire for marks are the through be a yields quarter significant the factors expected resilience of strength more and growth to our returned consumers' to our currency and in to all highlights our

our As end in higher our fourth of customer which the than balance quarter was $XXX about of the December deposit at is XXXX. million balance XX, $X.X billion,

to costs. Shifting

pressures currency our guests. our cost constant to Net increased mission continue experiences teams to focused X.X% reported of as fuel per ability APCD demonstrate manage in costs, delivering basis to vacation movements. the excluding a APCD staying while incredible compared on cruise to of Net and to health quarter our costs Our lagging per transitory costs XXX protocols for ramp-up related crew of and the to fourth fleet impact and quarter relating $X.XX cruise XXXX. fourth or costs included point the X.X%

crew expect substantially and have of the transitory We costs these dissipate to as majority eased. has our returned protocols

and cost our for on distribution reshaping Our group teams leveraging operational over efficiencies, have and been two working structure scale. years through constantly

We continue to in mitigate see pressures. continued the benefits XXXX to partially further materialize inflationary

Fuel the fuel. year. of last Regarding coming highs off are rates

mitigate consumption is expense. improve and helping and continue which the the hedged rate, We cost us fuel volatility partially of have to

'XX XXXX. of As fuel for hedged consumption XX% for today, is and XX%

As annual the highlighted X year more first on guidance business and into Slide visibility XX, years we as in time we the ahead. of are our for have resuming book

X.X% new our versus continued We driven expect for revenue X.X% hardware, of yield the for also accounts of expected to improvement net The it yield year. onboard products, load full growth is and performance areas, core growth by the demand underlying from strong factors levels. for XXXX lower

and to as historical record achieved that we to in return load year. yields up throughout late will We spring we ramp expect yields factors such revenue the

XXXX. compared are fuel, expected be Net X.XX% up to to costs, as the cruise X.XX% to for year full excluding

innovation. Our our and culture cost outlook improvement continuous of reflects

that benchmark, remember period global of we cost high a are comparing a figures including to three-year-old let's inflation. Now

that includes and costs. expect of structural points NCCx basis XXX transitory also lagging We

continue Inflationary supply and beverage, pressures costs chain including many airfare and pressure to capital. disruptions food and across categories, shoreside on put human

Our find teams continue profitability. creative ways inflation and manage increase through to to

and burdened billion Fuel XX% expense dock expect rates Lastly, half currency $X.X second the year and pricing, per we adjusted costs expected in to $X days market at rates. of to fuel year. more half by Based hedged of we the the share $X.XX. is on during year, rates, exchange record interest of and be dry below EBITDA are adjusted the earnings also current are first for the approximately

provide on first to We APCDs color million during I'll about plan the capacity XX, load some with first quarter Slide XX.X to quarter guidance. XXX%. turning and Now at operate factors

me quarter Let expectations break capacity first little down a more.

of XX% our sailing and for on will North is other capacity opened approximately and sailings, During to Asia higher in particularly the yet capacity three the XXXX, quarter Perfect years more in the first in region to Caribbean. of capitalize added This America, multiple spread capacity mostly from the Caribbean the Day we across at close in XX% remainder than operate Australia, short was quarter, is ago. incredible have of is not to CocoCay which our the X% itineraries.

rates share in interest versus up rates, are current per rates, constant currency. expect on currency Net and exchange to Based to $X.XX fuel X% be expected yields XXXX we of adjusted $X.XX. loss X% to

growing our recover hard normalizes. work We and level record revenues are excited our as to to and yields XXXX to occupancy levels finally yields continue at further

to when guidance, On first up to that quarter the side, timing XXX full overall, Similar our on and cost XXXX. quarter basis are NCCx costs, expect the carries to first net costs, year of cruise compared we excluding costs fuel, points of be approximately transitory structural 'XX. the X.X% the expenses weighing compared of to

quarter Shifting in with to sheet. ended liquidity. balance the our $X.X We billion

further remains focused flow. on and liquidity and margins enhance our Our strong, free cash we are to expanding EBITDA

is the to to goal profile. sheet Our ultimate return an balance investment-grade

on the maturities $XXX and debt previously fourth and due closed guaranteed quarter, refinancing June debt billion of million secured repaid XXXX. of the of we During $X

we billion revolver facility of existing $X.X credit successfully April extended to commitment XXXX. in January, our Additionally,

remains Our access and our financial investors strong, partners. resonate with execution and to capital performance and our

proactively and manage methodically We balance continue improve maturities will and to the near-term sheet.

on operations. our XXXX, we up cash expect $X.X ECA scheduled debt to For from with billion, flow down are maturities cash pay generated debt and which amortization, hand of made predominantly

and achieved control yields tremendous expect as EBITDA record we of accelerate, and to Our XXXX the continues adjusted such we our in as costs, regained we business business. to and profitability grow yields

into capabilities Our XXXX achieving on mission delivering strategy provide our and and focused and Trifecta while enhanced further committed our commercial goals. strong book the and remain visibility executing position

a the call for ask With session. Q&A will our that, to operator open I

Operator

from first of Instructions] line [Operator Stifel. Steve question Wieczynski the with Our comes

Steve Wieczynski

solid Good morning, very here. and results

getting before visibility So -- guide back as look, should your good should COVID, the it's you're as when or which tell ever you probably back to normal. way used say, been that to I to is us

call in booked. maybe levels. it, turned XX% you've versus now you want year, understand position book is that And the terms where to to of stand kind I of So historical historically, like my let's first question XX% right

strong EBITDA seem year us based exceed guidance for understand status would does it levels. base your It stays exceed on just much to that seem then this would your if levels, And well pretty And quo. to pretty current just your visibility mean, customer conservatism XXXX maybe I incorporates not maybe XXXX your around if fair. I want but that's some trends. that consumer

Jason Liberty

book position. But that would load say factors position why guided a we're we Steve, factors start you first your book expect the for get or an a I standpoint, lower until the now factor. we bit on our spring, as historical we to from load and that's on questions. be eyelash thank our also into away little load QX, off our and

our So very higher load when saw for than in we're on XXXX. position rates expectations book you strong that a factors, adjust in considerably at and what we are

I think put We manage your as our we of and on what based it believe together have off a visibility is strong ability accelerate EBITDA year. that do we cost forecast they exceed for achievable, And have revenue us as expect our are, the to clearly, we is to handsomely the is patterns believe generated that well teams very to structure. side we there's the XXXX. a outcome see better continuing way in for opportunity certainly to in that our

been. in and seeing thoughtful how we're how how We're we've thoughtful think operate. these very on markets guide. thoughtful different we I we're products always on just But We're

consider very really when frankly, feel feel we acceleration Trifecta. so, quite And strongly strongly towards we And we about the XXXX.

Steve Wieczynski

of most quarter, that SG&A of lines. maybe other should by the sure I I'm you. all And majority quarter, should 'XX, the that And we And your we would kind these would gone. get to look, the get just costs those be to I want question time those of that by second assume then about third But around the time fourth Got and the the way. kind would assume be make -- are headwinds Okay. costs to hitting right thinking I costs. operating the transitory gone. be of

Naftali Holtz

Yes, that Steve. quarter, you throughout as that we Hey, see expect every that's And and progress the to progress year. right. dissipate we made we can exactly

Jason Liberty

were just than I our I we're but because bit different want was XXXX. in to And remarks, in a we add know a little Yes. of it organization

year a of We full have Day Perfect now.

We also as businesses some like example. shed We've have like Azamara an things Galveston.

step the and are service that into I has a XXXX, X% brands not our when experience. by and weight mid-single wedding of we've cost really it helped versus 'XX. that so or you saying of of up see during work and shows back absorb and us what so, the get high like and time us very into think that is pandemic And you XXXX, digits structural that that experienced are were inflationary points impacting getting our our effort you about and the versus guest areas we the kind some transitory, in really costs XXX put incredible really What of basically result basis the who all during is while our the environment a shared increase

Operator

of from with next Your Farley comes the question UBS. Robin line

Robin Farley

would forward we unless think pricing guidance occupancy XXXX, the carry guess, going that back to that issues more about think the I of something split occupancy get to there's to as a and wanted a into piece that Just trade-off to little per get about sort that of cure you some increase itself, and that of of between occupancy. -- because day thinking your it the revenue full would in a price bit yield

back, you're to trying yield the forward? a price the when to, -- occupancy that going greater a for much think of is implies about just really increase guiding yield So how increase

Naftali Holtz

Yes.

Robin, year, again obviously a ago, So full a are first, benchmark. pieces so Jason were different. obviously, just the said, moving we many And three-year we for as comparing as minute

some So added brands. Galveston. We at ships, we are good some

Day now Perfect contribution CocoCay. have at We from direct

very All very, of to to overall, it slightly obviously, but is negative yield, us. important

hardware. The is see side benefit from new the that the majority you of on yield

revenue we in opportunities. up that like-for-like, that the much is the And on fact best the put than what you also that, the load lower have hardware had They 'XX. the mentioned, rest, itineraries. more We as factors onboard despite are

around difference if load we adjust QX, been For for factor, would yield the mid-single -- the digits. have

it's So impact obviously QX. for more

Robin Farley

ballpark That's kind berth goals that that 'XX of a about, of might you follow-up And to helpful. your 'XX? EBITDA us give is of that range Great. -- long-term a any would that clearly just growth. berth EBITDA the one Trifecta Okay. of Thanks. lot per for be the maybe thinking XX% sort obviously, of Is goal. of given then a is Just EBITDA you've above versus the sort per sort given capacity there

just versus kind we on wondering of if billing think be you recovered about just how berth 'XX So in may passenger 'XX? the per basis,

Jason Liberty

Yes.

margins EBITDA so, to We up Robin, obviously, those our were doing to on focusing we our brands. to to fuel just teens really being is improving is we’ve across one way -- is which now -- levels, we've start we per ROIC by of very our what be make create obviously to clearly we're sure is believe going the on our our back to believe because moved back we that to just and And all its guide berth in to But getting XXXX comparability. paths getting focused of really prices. impacted in EBITDA where that's record

us heavy that's improving XXXX we've those And and for how guided margins. is -- on so, focus on internally very the

Operator

Your from next Ciepiel Vince of Company. line question comes Research Cleveland the with

Vince Ciepiel

versus and there results onboard advance gap Helpful to strong occupancy that with you close during the continuing despite commentary XQ XXXX. especially bookings in

elevated? the secondarily evolve mix less expect how year to as maybe curious there's So that onboard ticket interior that, headwind you're would And that of imagine the fill shift, on to this passenger you these for you year? a day of I little a component, how of can through the cruise the about there. remain bit But thinking course out this course board throughout

Michael Bayley

Michael. is This

pandemic, think this investments first started strengthen. the coming the with would robust about of continued really how we we just It's I long the spend, needle. that. and theories And saw capabilities spend it all last we strong the And continues to has out onboard when pandemic really remember, had number of and wondered for. we see and software different you If the pre-cruise [Hybris] continue we we and with just onboard the to improve. with changed made our strength this during our web, incredible And to

now our extremely of made to activity So the XX% has penetration app, been the now on software new on pre-cruise is We've We've XX%. communicate occurring is and customer above something the which changes capabilities got of couple pre-cruise to over the with months. our past positive. cruise. response the multiple And and

strength. see the all we great year deal continue performance, this think and the way with very it's into and through of going So a we We're 'XX. pleased to

Jason Liberty

point APD But to Yes. on consumer is we main onboard few is to or ability creating consumer get their in our book savings, is increase an the friends is on family. I consumer just But for seeing the average on the that and sitting important really obviously lot the and think bit a we're Michael a addressable and memories is the and behind earlier healthy, with why want mentioned, experiences of on force searching the is side. weigh activity. to onboard Obviously, the just onboard as add things. in little as can third I to a spending, that out one add more strength fourths, what's our

being well to desires and is certainly creating also ship least consumer effectively the help. do interests Their certainly for a tailwind to by back as a helps. they healthy great want as to allowing excursions get -- day vacation So allowing a of their at them certainly But plan shore us. on what them

on And on yields and how with and bit little a more ticket the can package depending we APDs is There's we bit little brand. do ticket of to that it how things onboard we a always expect lead a little ticket side, our to more or increase. bit on the how into to continue

of out one just through the drivers other taking onboard shops. the they it's how acquisition more And and the the I the things. also think allowing to customer the And the friction -- also experience of other ticket go on or channel that's and is choice choose on looking and through. We're get side and for whether more to they're e-commerce the vacation or that platform of choice them that of

Vince Ciepiel

That's step a bigger taking back, maybe a helpful. picture And question.

at look industry supply X% but then in to for and off 'XX of 'XX, 'XX like growth, you order If book 'XX. looks the X% range in kind this and falls

So the And pretty in mean 'XX supply ship time for decel around broader Is picture. builds? new that can take us the you 'XX growth remind line might set? into what your on decelerating industry pricing

Jason Liberty

on don't -- new the competitors it's plans Well, I building our of know certainly a standpoint.

X% And and grow one in had thing next XX%, that's is, out destination. As about the X%, brand respectively. release, I one then to not we kind in to year one business point about by about of noted our then in how just we first our think market, expect

how and be reflects in ships our three segments world. different parts their the this in really for to of to and So they're brands wholly grow also these owned different going

book, believe see, If 'XX, the into and get a the look do 'XX especially that order that you order you operate. underpenetrated, in at that you book. we different lighter market as the Royal is addressable markets We all Caribbean

effectively we more -- think supply demand. to that all that the create over of hard apparatus revenue global course, the we growth coming harvest management years. And work that are supports systems quality very build to guests attract our to expected than from We world, the and brands over

Michael Bayley

the we're of up little that -- terms our for here 'XX. the in ago, generating have in been I about product opened we add best-selling talk And fact, in coming few the months just that to about Michael. product. never to driving been online. history the pricing really we the of business outstanding great don't of demand absolutely Obviously, mean and one and we new comment talking has literally has Seas it's it's a Vince, ship the I a sail and ships Icon

at is We've big of is but stats 'XX, had And driver of beginning coming healthy. 'XX the a Icon. very of some that Icon. remarkable 'XX looking obviously, out

of that younger Just the which price nugget sold XXXX one for one category on only families venue me average townhouse for $XX,XXX at is experience an new but in that little is room, X-story it's a very Icon, a gets is already week. our Surfside XX% excited of we ultimate sell family

get Icon. very being performance So products. class, class and a mentioned with just a that had we're new the of in of ship demand is new which And excited that's kind these by you Royal years, has of obviously, can time are first new feel seeing we with International And far. delighted Caribbean nine with we're the so the generated Jason what

Jason Liberty

Vince, a you save don't worry. We'll cabin,

Vince Ciepiel

to saving color. that. the start for Going Appreciate

Operator

Your the with comes from Barclays. of question Brandt Montour line next

Brandt Montour

off, on this milestone. really First congratulations important

season. -- the things is this pretty more morning, bit just the be ships account with any this into seeing of that Jason, little your So on at question my end, to expand lower behavior the first lower pricing bookings? anyone, within sensitivity could older last a WAVE fleet WAVE sort going Any season differentiation on you're and in all consistent Volumes much or at either your going seem the By better is higher-end brands suites pricing were month-over-month. you or if really which accounts between well. are forming year? -- or week-over-week, at

Jason Liberty

Thanks, Brandt.

two you lightly, this these see amount very from -- demand three to -- don't but as mean elevated our say elevated have all And see seeing so an that happy we I been to across trends well. we're WAVE Europe strong now move it's it's North past And over brands. weeks, of very into demand wonderful say, America. of or really the First, I coming and

surprised of very We their to consumer how been X that more and normally plan encouraging for what X, of especially has we've seeing vacation is includes and of a within really lot increased as we're that overall. couple weeks window products, acceleration short by happily of have now our booking strong travel close-in the our products night see a it been. And X is

wish like, this don't to say to brands strong. could I it's we're Europe move ultra-luxury into I -- place. we've or a now could the all different I seen begin much should seeing But well, wish So it's And to our markets that like say, stronger I I family really example, for expedition. of across different really from actually, Northern say

products add also Americans you have demand, I travel strong. go other is exceptionally as in to seen probably just to Europe been for has North

now over take that here cruise seeing And space. we're in the so,

Brandt Montour

Michael. And add ahead, just -- to go

Michael Bayley

Sorry.

product, which We've Sorry, surprised demand the add but the American North from on obviously, us, out of also markets comment the just really seen that to see. advantage has taking demand is the it's European so across we're coming America. which consumer to one strong But of our it's that. many Latin the pretty much board healthy seeing across we're markets, in of for the strength and

Brandt Montour

Europe That's you both And end market. It where a of great. UK most even are that out into if on just follow-up U.S. those the sounds the Europe called it's like comments. and excited, you're

you are that you to of you, consumer against accelerating consumer sell they consumer their sort for sell own to be now the right as good that might terms that and that In of as a to not European comparables?

Jason Liberty

they of thing other are. WAVE think this through the And seen we've that is time. at I Yes, to same ability raise the prices course -- has our been the that

all different is is pullback announcement really the has new-to-cruise, just not do acceleration of our and saw returned. than of pre-COVID. earnings we cruise consumer first-to-cruise across last or categories seeing really demand products a the the the brand, what and many so. really being better these to And in a since across reflection dropped strong and able of So to call, cases, from first-to- it's continue to we we're seen since what price three as propensity the And that that protocol we've raise

Operator

next Suite. from question line Your Credit of comes Benjamin Chaiken the with

Benjamin Chaiken

it, guess Is asked weeks missed some in but for last I I And occupancy per guide Maybe Or yield revenue the sounds growth this I few expected the that year, the months. simply pricing in better of also improving? cruise the like and day to net implies context is clearly. what improve? the passenger

Naftali Holtz

it's Ben, Naf.

And levels continued So the can of normalizing with strength it's the business. pricing. Obviously, the you and of occupancy both. see in acceleration the the

Benjamin Chaiken

you then as you same are term, really helpful. And seeing did the or the still Got you. CocoCay XXXX? on premiums CocoCay, And itineraries pricing to similar That's in then longer other similar you Beach]? about that And bringing that locations are [Hideaway think CocoCay? while make build-outs do down so, should in also further to we if you assume how that opportunity

Michael Bayley

Hi, Ben, it's Michael.

I think we and questions just is success. answer in to those XXXX, huge the opened it ironically is yes. yes and a mean I CocoCay

product that doing it's job. course, of And for exceptionally the an demand really is high. amazing Now,

in a capacity bring CocoCay. We into significant have that overall increase we our

with again of it's rate the the volume to for experiences rate Perfect in We've million Day. not we'll very And from the to demand think And seen I prices for is guests 'XX, And on million there. be year only a but up resilience spend a go that same a X.X CocoCay. way. there lot great and a products is the bringing going healthy has been this the demand X perspective, as up. and the

So very and it's hit successful. it's a

year Hideaway Perfect fourth will opening the will quarter. allow us quarter are towards of preparation people Beach arriving Hideaway additional It Day. Icon in on of the bring X,XXX And this an also We to end that for of Seas. of the course, to be the fourth Beach

approximately our So such ventures. have people soon appetite a And any as we're will will. we an capacity other announcements, we And as day. make be to yes, for ready XX,XXX

guests really we experience a -- our of perspective, of it's part and clearly now a this is this the from experience, that demand product think them. type clearly, our we But can give wonderful

for this So of intention piece is continue guests. experience our the to grow our to

Naftali Holtz

one is are financial just like other which associated So the and high and our let significantly returns are me above with thing, CocoCay the targeted returns. exceptionally add

of to should obviously those be type are obviously continue the this So investments and to EBITDA accretive and to profitability that want to we make.

Benjamin Chaiken

one the to numbers CocoCay? a And follow-up. on you. million X.X… Is incremental are the at Or Hideaway that Beach, quick is day. -- X.X million X those X,XXX to Got Is just

Michael Bayley

Yes.

Benjamin Chaiken

Yes?

Michael Bayley

incremental. That's yes. Yes,

Operator

line question come the will from Your next of James Hardiman with Citi.

James Hardiman

great And a be markets global it what wanted ago, it in the conflict, Being was happen as that -- do, bit here. but congrats important a business the well both quarter season, year? things by marred Europe little benchmarks on to conflict And next of positive brand, better. you really sourcing guess obviously and year to Asia. a knows as such what's sounds you was you there dig WAVE conflict. there on guys getting Europe, and adjust. Obviously, I going that, of that do your still some like I could in is Russia-Ukraine with lingering terms for on customers, are that destination who a in my a ultimately question is impact a

going with zero And speak of from policy assuming then yet on for much open question anecdotally China. similar not or potentially a sort what the to quantify any way there. business next there But sort is is sort to of there's could that that benefit COVID of even of your I'm sort drag away up a of year? you

Jason Liberty

China. I'll on take -- one, and Europe start I'll the just then So can Michael

in Russia, consumer impact I -- on to off, Ukraine, ways. the I the two the think comes First us think,

desire east European continues the experience of some One then that a more not very on go because evaporate high. because we're their of a hopefully energy Baltics into consumer on. But of unfortunate That, deployment is over is that able propensity to conflict the the a vacation go there's And obviously, impact to in time. the will impact think, I impact, to and bit prices. of is cruise, their which little

European which for to go to to effect. go desire the to proposition Med, because that. is the American impacted the increase that bit more as I'll there. And consumers is on is experience we is desire of their little consumer continue how than they think consumers' think very that's them Med, really I cruise, the let prices really significant. that my value look remarks, with that pinched I Western go China. to in a I to to But as where fully that's Nordics, still certainly see you The Eastern and just economy. that, energy That's Michael be demand noted open close gap kind too to in to the try significant more The the North probably -- of pinched, comment or

Michael Bayley

Yes, environment's there's from our China, China by being what we've significantly team. on obviously, told -- improved the

China to over difficult to So cruise the to market things period. opening up. have that normalize, very and There's have got seem currently they started impediments two

travel China. to have quarantined. and a group Chinese ban tourists from is that And One there's be in also, technically of Japanese them still a cruising on there's requirement could potentially the and test

first that's some been happen. conditions half. we've these we led understand will We That's going at of away that this and during what both drop believe, to that believe point to

reopen probably, and market As late currently. those soon we're of will then we be the kind and will two obviously, change, understand how as the market and conditions 'XX we're see based situation obviously, be thinking upon China that's it thinking will 'XX, But realistically, the that that back.

Jason Liberty

that just -- high-yielding, And opportunity further for optimistic us. us. a market for market the I profitable China to about that how was Yes, clearly, we're either going can as and was very comes very highly back propel online,

I that comment turned Trifecta, contemplate on. didn't consideration we China in has just And in of would it not context itself back the as

Naftali Holtz

our included results not well. -- in also as it's And year obviously this

James Hardiman

of helpful. land-based I vacation you of thoughts gotten have than into think relevant. business get gap own your really land-based And insight cruise to that outpacing talked couple you All much as there. updated seemed you've times, vacation vacations. that. more thought to that think, speak close searching here. mean, and maybe going it. you big year? Got gap Do I it's general into gap of commentary that I about the this as by but to maybe follow-up search sort has Obviously, then Maybe a way closing about

Jason Liberty

the also around now excited I'm the relative zone the XX% onboard mark. in that about which be gap don't which what XXXX. to us But to us close which close I'm for pricing was to gap. us think I which pre-COVID, helps gap, is Yes, opportunity seeing XX% we're XX% close -- we're that ability used side, even now gap. our don't give increase in will the in to to that think going I know by the encouraged that I more,

being us, cruise and brands execution, great But we and that, lead of and through just to as do helps broader of appreciated us a and which more that our that that -- by lot our there's getting now see closing just helps to guests that lead we the the complex gap. think I awareness that's more think pricing for runway -- that us

their that not we're want go our to definitely so. in could Like interested ourselves and that's do What gap pricing level, to in because to capabilities down. up we closing elevate just the is that's potentially we think something

Operator

of Wells Fargo. Your comes line with Politzer Daniel the next from question

Daniel Politzer

quarter. nice Congrats on a

So going wanted on line with the you're sounds like more your to to It exit touch XXXX in levels. cost. first, just I historical

destinations impact of XXXX, you it's to any or that could algorithm, As China any thinking get whether of X% about should know there technology we it's and I to kind initiatives? kind that X% items your land-based that are onetime early relaunching still or cost and days, increase be

Naftali Holtz

Good morning, Dan.

we're moderate strong the towards. the is growth, kind of this control you marching capacity moderate is have and throughout But obviously, several formula our year. and cost said, we pieces growth, as here in first quarter So linked where yield

expectation to formula. back that to our get is So

Daniel Politzer

it Got it. my on piece, about for you and a guess the more just And little talk follow-up bit I there? a Can European know there's I the ramp given sounds TUI. then that in things contribution of big a EBITDA along. moving that think that piece of that how should XXXX? course was over we about like it are ramping But adjusted big XXXX

Naftali Holtz

Yes.

positive and very now. quarters So pricing. TUI, and recovery been they cruise been strong several their for cash performance levels very we're EBITDA a with flow brand. Their continue They happy occupancy is well have underway. successful and has -- They're very operating

expect levels So we to recover and beyond. we towards XXXX to this continue continue --

Jason Liberty

burn burn in 'XX. and -- similar have really TUI broader outpacing, short been as years running are as some I the us negative some well. off they level place the is that's they to think and And cruises, very where world still it's cruise a for Yes. carry The of have is They've generating and But up all I They there positive to to a duration would managing at flow. as -- being been a all cruise contributing just a add at have only and from business. to going were negative like have of off. same back carry few I a their cash really to us. they I think us, But getting effectively profitable just business they're think, they're

Operator

from Scholes next line will Patrick Your Securities. question of come the with Truist

Patrick Scholes

First the to Or off that numbers? numbers percentages net back grow the numbers in different of? Basically are we off costs, that is growing be you should apples-to-apples might is your On had of XXXX, there -- any versus guidances various make for in in are all -- actually those 'XX based there just a those and adjustments modeling the than reported apples-to-apples? okay, clarification percentage question. yields cruise those the

Naftali Holtz

the pieces. are Those we you the adjustments. and moving of all color obviously, No gave apples-to-apples

Patrick Scholes

Okay. different a And question then here.

going With increase Caribbean or that of differentiation do higher-end or as to perhaps destinations types any the between Alaska those? such disproportionately direct Mediterranean in any you business, see

Jason Liberty

or direct it lack percentage, on that's product. or requires, and the our the travel clearly, typically further is complexity -- the business, the more just short end and the because The comfortable to understands the shorter of the they're higher goes complexity consumer on more product, Well, of goes partners. the going the the that higher typically, consumer comfortable

were of of they they're digitally experiences, through consumer we because course, channel a And in of to kind COVID different all of just become little has the they be to stuff bit shift a hard tried really channels. comfortable buying more as lot have now We choice. a online minded know. as And

platforms those partners. see that's of of those and and us you digital some closer would through some as But typically higher. And our how platforms are it travel digital shorter the where

Patrick Scholes

end you have or of as a No, changes acceleration seen acceleration sort far greater that to But any perhaps to... understand. I in as booking since higher direct greater pre-COVID, a

Jason Liberty

really across the It's board.

been to that's more to different TUI look digital Silversea have that's -- consistently or Royal you Hapag, using we consumer at want the or commerce is at all or And kind of levels whether what purchases. have that On gotten their or make comfortable seeing. Celebrity

Patrick Scholes

I Thank the you set. am color. all for

Jason Liberty

time have question. more we Operator, one Okay. for

Operator

Wolfe will Our from Fred of Wightman the Research. with final come question line

Frederick Wightman

'XX, make similar investment to just I equity will line did what Are take be want I Or to a something else? it in commentary. seasonality but saying you sure understood were haircut relatively to guys the perspective? a from trying to say just guys you you

Naftali Holtz

No.

it's carry. is provided, I the think through is obviously, expectations going negative our guidance what be what our and Jason we than to the XXXX lower mentioned if you because of go expectation

to So continue recover. they

Frederick Wightman

new Okay. there levels. above And comment was XQ that was to then pre-COVID cruise a

the order you 'XX, percentage when what a you magnitude? sense does look of us books could at improve? that curious, Just for for on continue you give have to And

Jason Liberty

is Yes. new-to-cruise new-to-brand. Well, on and WAVE. that just strength our and What's commentary general driving

so, And but than similar, it's not mix is quarter. saw we take fourth place the what only better in that

new-to-cruise feel one is that to business. -- think we propensity we So stat, thing was Chinese important to consumer the and of way, cruise because on much China every in consumer. don't have our I by 'XX Pretty relative a that's the the mix 'XX back new-to-cruise especially in

and to on So of cruise go one to first to a go European first that of the or their the American interest consumer our really and about the North brands the time on strength for for time. talks

Jason Liberty

Michael and day. a interest I any for the all available be you you wish your will great thank participation all We in for company. follow-ups.

Operator

Thank call. for conference today's concludes this you gentlemen, participation. and Ladies your

may disconnect. You now

Royal Caribbean Cruises (RCL) 7 Feb 232022 Q4 Earnings call transcript