Earnings call transcript Q2 2023

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Operator

…gina, and I will be your conference operator today. At this time, I’d like to welcome everyone to the Royal Caribbean Group Second Quarter 2023 and Business Update Earnings Call. [Operator Instructions] I would now like to introduce Michael McCarthy, Vice President of Investor Relations. Mr. McCarthy, the floor is yours.

Michael McCarthy

thank XXXX joining earnings and our today everyone, quarter second call. morning you us for for Good

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

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

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

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

We questions. open call will then for your the

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

Jason Liberty

everyone. Thank another business. step and results thrilled you, the this to of and strong good our second quarter I’m morning change Michael, morning, share our with you trajectory in

momentum doubled brands. our period of XX% wave we for yield a that by heels booking in our drove recall may the expectations strong our that and on You revenue guidance increased May earnings record

and got leading value demand The of shared for vacation consumer and brands, in strong cruise strong this preference experiences. our accelerated attractive it even since better then. our we combination of to the Well, numerous tailwinds contributed for proposition morning’s press as release,

by another full not growth continue remaining full for guidance are XX%. the that expecting low we growth but expectations, to share quarters. year another increasing only also our and rate outstanding brands thrilled delivered year and Our that are the quarter excel, we now to yield for earnings exceeded significantly double-digit I’m teens

thank to commitment entire very delivering Their the financial for team experiences best quarter. us strong and allow passion, while vacation I Royal Caribbean the deliver dedication another results. generating want to Group outstanding responsibly

laid ambitious Last year, which we clear Trifecta, out set and targets.

have expect to record EBITDA made goals return now APCD invested We per and progress towards tremendous this capital and those on year. record achieve

execute on as our well We our continue to strategies. Trifecta we are achieving way on to

As throughout exceeded environment highlighted on in we quarter demand booking May outstanding into and meaningfully back strong Slide higher X, prices. volumes expectations. that we delivered and The quarter reported robust continued another the second translated

XXXX, exceptional second the record record During outperformance. continued close-in pricing in satisfaction we scores. and vacations were achieved strong memorable XX.X% guest that higher a X.X spend higher million demand, of strength quarter, revenue onboard delivered the and yields We drove

for remains While demand of to performance the This particularly Caribbean year, quarter. a the [Ph] standout itineraries. cruising we for the demand European acceleration performer the better-than-expected and quality pleased were of contributed for strength Europe with yield this

and resulted than majority EBITDA adjusted Our had are we more accelerate, margins as last cash for continued the to the both of better-than-expected to bookings the currently so earnings. more taking for capital in are year’s sailings. call continued XXXX XXX% and our enhancing disciplined focus sailings Booking volume flow for on We record since have even bottom the XXXX allocation next our the earnings and line. and of significantly outperformance flowing revenue quarter in achieved

XXXX into their and second The of double-digit value strength with the vacations is our versus summer looking half of of year cruise XXXX. the for for North from and American proposition rate consumers remains brands The consumer our low expectations teens combined vacation the growth incredibly and European volumes of translating book quality strong, experiences yield accelerated. growth to

normal. are Our to factors back now load

growth So in onboard hardware. is strength the incredible like-for-like driven pricing both by yield and new spend and for

any the are early seeing next While share lot customers. very the color year’s to daily environment it’s want encouraging. with been outlook, I we of are seeing clearly, about demand specific the provide healthy is has our we and of for There millions talk consumer, what state still interactions of too a quite to for

savings. strong bolstered and by wages high is excess labor Sentiment strong remains markets, and

vacation customers us memories towards continue shift to with to over and engaged Our build preferences remain and as experiences eager they goods.

double remains the lower spend implying and that up to long-term XX% than of last experience goods. compared few opportunity. was this a on trend catch-up the multiyear spend spend XXXX Despite increase, Over months, experiences on line,

platform Our to market vacationers favorable range and continues demographics benefit as addressable trends. broad appealing expand to our of wealth vacation is we from a and

we either quarter, or wide second levels double have rates nearly repeat the post-cruise percent cruise In new XXXX brand to new XXXX the and by a guests of seen levels. were surpassed booking margin, to

value happy as we strides While in further the gap close drive remains over us gap to months, better we land-based the welcome the seek an made to allowing cruising and to vacations customers. proposition, vacations, exceptional several broader outperform narrowing last positive have to even revenue leisure more land-based travel

visits factor and to doubling Future a compared highs a is to cruise consideration website in near all-time contributing XXXX.

back fully than delivering our bookings now running in more did are addition, they travel up and partners XXXX. and In

us Our the our capture of improved wallet. this demand expand share commercial capabilities guest have and quality to allowed

of about of of two thirds spend second their incremental cruise the their activities In some our onboard on translating into advance in booked guests quarter, once board.

of in to new our app we capabilities continue to and the leap, features significant add in still a engines. commercial we made have innings early and we our journey, While are

clear. is One thing

by our execution and our strong industry-leading see offerings, nimble The is model hardware, continue continued Our bolstered their experience by for deliver guest teams we on products teams. Scores. innovative more to our spend vacation and sourcing our guests Promoter satisfaction enhanced robust demand brands, to strong global Net and destination

and into our us, customers New to quality a vacation hardware has differentiator demand new ecosystem. great for been drive attract allowing us

In Celebrity Cruises Silversea the with and month, new take Caribbean welcomed revenue delivery Seas Celebrity and of support yields new of Later we game-changing Ascent Nova, the X QX take XXXX, end ships delivery This on year, International late premium in strategy Evolution beyond. the Silver deliver our of in that will will and class. XXXX beginning the in will this sailings Icon its January. welcome Royal of the first

has the with mid revealed Utopia ahead alternatives Royal that and which our will on focused driving ship ecosystem vacation of ultimate Caribbean, into weekend Utopia gap. the close be fleet XXXX, getaway, International next Looking will short supporting customers of recently as into first value entirely join new-to-cruise Seas, will in cruises our be competing Oasis-class seek vacation to our we the Caribbean the year. strategy land-based the

of for Ray, evolution and in future Demand Classic delivering for has attracting the for far class, very highest pricing fleet. cruising. XXXX, will is Ray exceeded expectations. our the the Also, Utopia brand’s it strong, is the Silver in Demand the second welcome ultra-luxury rates Silversea and

We efforts to deepen the with our continue relationship the customer.

our our lower loyalty We enhancing and are customer costs. optimize further acquisition capabilities more channels build even our distribution commerce to

as our seeing well increased experience. e-commerce We are and spend repeat and capabilities and guest rates guest continue overall in pre-cruise the as to further elevation enhance

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

growth, to control remains proven moderate yield Our performance. success unchanged, lead financial will strong margins, superior profitability capacity growth moderate for and cost enhanced formula and

significantly In business our second conclusion, for cylinders earnings the water the our amazing on in all team increased our expectations firing off and quarter, as and exceeded cash on and guidance and flow are we XXXX.

achieving to our are our Trifecta We on goals. way well

Our every the differentiated includes the vacations day best proud to deliver that platform very best sourcing responsibly. and I’m winning. out brands, fleet, global is destination, And teams go platform our of that people

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

Naftali Holtz

with everyone. earnings Jason, We of you, begin will for and delivered strong results higher the quarter. Thank per of our than good guidance. May another the performance XX% morning, by discussing share midpoint I adjusted our $X.XX, second

about yield bit the behind on XXXX, factors. our was despite than significant being yields were hardware and second of in new the points half driven like-for-like load by driven a and a with growth Overall, XXX on load XX.X% basis by higher a quarter half XXX% of of with the guidance. increase hardware rates We versus midpoint about factor net that up finished

XX% compared to second X% APCD were quarter second Rates the in fuel excluding the compared of increased up per to XXXX. XXXX. quarter NCC,

came in higher consistent the our While outlook our in the price costs increase in for resulted financial in with May compensation. significant increase our guidance, year stock-based the and our share

that XXX contributed basis the favorable by the which third timing will shift cost, points offset quarter was quarter. This into to

expenses operational maintaining an strong to driving focus margins. commercial top operating expand doing teams job Our are exceptional line and growth and on

line, and levels this the over dropped outperformance of in leading earnings quarter quarter second the versus margin to beat to EBITDA recovered to the guidance. has our XXXX its bottom significant revenue during XXX% Our

full last second key volumes Caribbean of XX% increase the our our demand the the is in year. North for both and for itineraries significantly booking quarter. account in consumers. itineraries full American about exceeded Caribbean Strong to European mentioned, for capacity since in earnings performance third contributed quarter year the strong expectations XXXX the about the Jason drivers one of As call XX% and of and for

revenue resulting performance in for European expectations in acceleration our XX% sourcing in Europe has mostly been global by Europe model. quarter. customers, account XX% The is third better-than-expected capacity and demand our increase the year and full The sailings nimble our underscores sailings. of for in our an which driven

our third accounts only represents year full in XX% Alaska quarter. for X% capacity, but the of

about been for three have since the strong in Similar added with volume have line our additional We very for sailings this expectations. above load XX% and Alaska Caribbean, this have to XXXX the product. up trends with XXXX region factors seen early versus capacity ships high-yielding and we year to

turn expect increase full yield second XXXX. from midpoint talk to significantly year expectations our the with year. full the the XX.X% to of due We XX% of the remainder to for increased increase outlook about Slide XXX Now the of point results a now the basis prior for let’s by driven to growth About about strong year quarter guidance business rest for the the X of XX% is better guidance. net

expected and the hardware of revenue. acceleration higher with the The Both further are teens, quarters at throughout remaining our core further strength guidance increase is up quarter products. in in range and for low the both onboard the midpoint third pricing in and yield the XX.XX% expectations our of higher be to yields for year for up pricing are year. driving new result Yields an like-for-like

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

have margins. enhanced the support years reflects cost taken the to over the continued from Our outlook all actions benefit last several we

before, result mentioned of year I increase in full compensation the As a in mainly is increase expense. costs stock XXXX

anticipation In of plan XXXX. this of spring in cost our China return, increase to in return we of the support our announced recently restart. also We to

noted last of I As and and basis XXXX net the cruise structural include our have of not that on full did year cost points costs in earnings CocoCay terminal. related we operations to Galveston mostly XXX also call,

translating vacation is focus line. on experiences team’s while to delivering Our profitability the enhancing bottom responsibly the best

For flows the revenue the year, the in our increases to and margin. increase second through of half XX% earnings expectation of

expect that record away margin EBITDA for per in also EBITDA We APCD the previous eyelash is an and from XXXX. record our an year

of rates, So $X.XX. with current per in and currency based share earnings interest to along expect business the exchange adjusted we on fuel outlook, current summary, rates pricing, $X

Exceptional to to XX% guidance. Net increase driving expected accelerating itineraries are will and in demand Europe quarter third the compared turning strength is I Slide for XX.X% itineraries in yields. XXXX. be discuss to X. yields to our up Now Caribbean

fuel, from shift to increase timing compared stock-based relates of the excluding About an of to compensation XXXX costs expenses to expense. increase the expected half is NCC, up approximately second and quarter XX.X%. cost operating be structural in

management. variability we focus dock said, factors and dry in average to fourth increased is normalize second to expect costs favorable to within XXXX. cost comparable full quarter half mainly With Many in year contribute due cost with more yearly the to quarters, growth benefiting from the in days on that our a

we rates, third based quarter. summary, rates, exchange share for interest the rates in current per So adjusted $X.XX fuel of earnings expect $X.XX to currency on and

the to in ended and liquidity generated during Turning We quarter. our flow $X.X sheet. the quarter $X.X balance billion with in billion cash second operating

cash and better-than-expected Our our sheet us leverage Utilizing of with achieving to $X.X we and sheet the the operations, debt of goal investment-grade remains accelerate repaid during to levels in metrics. notes disciplined strengthening balance priority, quarter, XX.X% $XXX very secured due strong reduction allowed including flow million from senior XXXX. June billion of our flow be top and allocation liquidity capital generation the debt has a cash continues

quarter, cash during in Also notes $XXX additional XX.X% XXX,XXX we shares. in that an of July, we XXXX. of June million the our June the $XXX and notes were settled redeemed Then due with secured X.XX% convertible due senior million

have million as That only our expense we XXXX we result, interest in earnings those of and a $XXX debt. in contribute will actions and As beyond chip increase high-cost outstanding. notes reduce at away currently to paydown further

metrics. leverage, of that debt the in this have are of debt no toward the goal we billion calculation, XXXX. by deliveries the related When end the from for ship investment-grade significant year, our excluding to $X.X be to sheet a leverage our expect EBITDA new balance As will times to progress this year, contributing minimal we in ratio mid achieving X of

pay more of Trifecta and down accelerates our generates and will and refinancings business in support cash to continue we methodically goals. opportunistic pursue our debt flow, As proactively

accelerate, business on while committed our closing, goals. continues to we strategy effective on and and In achieving delivering mission focused remain our and our our executing

our to With that, question-and-answer open the for I will ask operator a call session.

Operator

first Our Steven Instructions] comes go from [Operator Please the with question ahead. Stifel. line Wieczynski of

Steven Wieczynski

morning. good guys, Hey

First congratulations, another quarter. very very, strong off,

So to based a advance seems XXXX of it full us possibly of probability as we of somewhat now be a Trifecta could of achieved the some is probably our high about trajectory there the business current that targets your in year targets, these time frame. Jason, the think on

of statement. targets already trends, I kind current was that strong than on you’re So know you a fair earlier that like fair demand based were that of look, that’s based some achieving XXXX, on guys does is expecting assume it to the question, a you just seeing just [Ph] on it but for guidance call the seem path. XX these much And are

Jason Liberty

and I thanks, to morning doing Well, Steve, hope morning, everybody good and is everybody. well. good

as it as think Steve, business. Trifecta, I our with, described here was, say to the as as company a as continue would Trifecta unlock our we camp. as grow -- in and base first, our people pointed lot to So out we We there’s we value just brands we execute

achieved anticipated And so of to been points that booking in as metrics to trends environment able the be. you be pointed earlier being these current have especially out, than to had we them the many seeing, we

is organization important course, we past, much of beyond. execute pointing as we core those And setting have and make them believe the to and to we in the that that nits very coordinates very sure on

the as certainly get closer be the look camp those look to to. pointing the next when being the at us, environment our about we the gap we competitive land we see we or close vacation, to to talk other base what’s will As the metrics, preference said, base these set But based trends, brands camp for with will two executing we’re really on what again, really you that organization the as to further how able outlook bright. and looks booking the here

to position point that to these early And too going be. but would in not trends base a we’re earlier we that it would us for think it’s that what say so an say is at exactly -- camp, looks to I timing arrival

Steven Wieczynski

a you guess, XX%, And early of the we it North turn end customers calendar you. your booked I question know Got fast of year your second but versus you’ve it’s XX% it’s probably good my the based calendar visibility And And European of American which things, stronger. guess January, expect, year, where plans, you are on been say, range. Do And as kind forward like demand seems around then but Okay. into getting out moving it’s thanks seems you’ve just of historically, book not let’s is, if the the the ever only that. could there, a to I marketing December question today, strong I for that’s been. at from now turned current as current side your higher think booking on, still kind I position like historically?

Jason Liberty

of -- very Well, especially think on points how are volume the being bookings relating about how booked, these We much about to good us demand we’re in and what ahead environment, and our environment, in our feel most strong to so commentary or I XXXX. really really that -- booked booking obviously, XXXX. rate

What the more in would position we’re I is to in in that more our very would have past. past, the possible But than -- a is just book optimize it say been -- revenue. we is I this said we’ve goal

we in a optimize at or plus the position And revenue, not you much point of book a you certain have kind standpoint X% cross because minus periods could time. books just so on as we’re to be how looking on optimize

And even not here, lead we on what us see state cross our I we is think revenue, utilize ability but manage optimize as to art you the yield ticket, and of tools profile. the our are also to have what’s on your say just demonstrated our to teams as optimizing would onboard helping

Steven Wieczynski

got Okay guys, it. Congratulations. really Thanks you. appreciate

Jason Liberty

thanks Steven. Yes,

Operator

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

Robin Farley

thanks. really Obviously, strong Great, results.

at looking your changed. Just in just guidance there general. expense really like despite out performance, the of your looks expense tied hasn’t a lot outside that’s of to it It compensation higher

for of if sort your about hasn’t maybe it’s worsened last XXXX of terms worsening you but as the has that like that increase Thanks. few could give over year-over-year, talk maybe expense you expense So outlook hasn’t quarters, the some I know been year others. visibility early in does it if the to the XXXX, a of for look higher normal kind

Naftali Holtz

good morning. Robin, Hi

that managing in of XXXX, XXXX, growing. we’ve guidance as result talked today is four And yield So the exceptional our comparing were the was our and obviously, to ago. is job margin we years we that yes, first of all, actions expenses really about expected and all expanding of shared all the team’s that really

there into we anything -- opening Beach. nothing is going is a are HydoWay extraordinary. But bit be for XXXX, we structural, example, look that things be should are a a There year. to are couple of So normal it as that little generally,

Jason Liberty

a it’s to items kind to really Yes. really I that our A grow kind think the and lot of vast product. majority work to all all calls of position -- actions significant margins. saw And ourselves to took recognize, the that of just that we of pandemic the do outperform pretty to if Robin, inflation a you because together of our it lot add I into wanted helped across absorb important the and the string that through impact we

absorb And really so Net able still significant we to Score. were that Promoter and produce

brands So the very, in easily impacting paid off group and travel as very inside thoughtful to the a not of experience, be has short-term. the us the or long-term, it. preference done product which is the clear But in the standpoint great for very strong vacation of that on it something but are there help and with really could to

Robin Farley

great. -- quantify of to one sense any That’s then that restarting of what the on us you that’s that you me. and might China start-up way clarification Thanks. XXXX. obviously sort a just magnitude for to costs of that? And mentioned April Can some in Thanks give it of

Michael Bayley

the Allure our it’s I in very StarLink video And to Seas sitting and fortunate with participate I’m Robin, conference from you beautiful room. call. today because morning conference to of Using our Michael. colleagues in my calling technology Good be the happen

We’re President’s cruise. on the

loyal guests this along guests other X,XXX on over our voyage. X,XXX of have with We great

of see be guests you swimwear, that say product my our to that but I’m the when it’s loyalty customer, amazing It’s give of -- have quite sitting with just they many only beautiful incredible tell the it’s you that. thing the Caribbean. really guests and it’s on here of But with have actually to the So you yourself the our kind thing. and loyal Royal back a I so in kind can’t brand, amazing an in to immerse you feedback

to process open for time. back a it kind over our had of yes, employees a China, we’ve bringing relates On sale. We as thoughtful

and into that a we for mitigated we of move as XXXX, SG&A lot XXXX, expense, accommodated obviously, as have then on of we provided of operations expense. So services by be Singapore the typical forecast obviously operation one-ship And in it shared our some take through full also more that a will look we with we year and a office.

our -- signals scale tell market can pretty terms it’s and operations good comfortable yet, days And We China to back early sell what the look in that with I pretty you feel we bookings. how and feel but of we’re our we operation. operate the about teams positive. seeing and

Steven Wieczynski

increase of of a in is you just the And as Michael result to that May stock-based expense the that the talking little that about. entirely is what today which our Robin, question, a have compensation Yes. cost and and guidance bit China and your majority of was increase between

Robin Farley

Great. you. Thank

Operator

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

Brandt Montour

excellent good Hey morning An everybody. quarter.

you here. first on several of mentioned it the demand clearly consumer it one was takeaways and So surprising times, European positive

Just give how U.S. could so you the that get we in measure kind versus sense a is if if of source there’s of how the to go? the recovery sense us back how recovery you Just a consumers measure you maybe can sort trying that consumer further get European to Consumers from European [Indiscernible]? far a sense of recovery

Jason Liberty

of was spend because North recovery their I to less spend to their consumer. I willingness willingness what American in position is very would their Brad, with in the think about terms competitive

kind that delayed I think the were vacation. of activating difference their they is and

much very that’s story needed consumer of feeling consumer of the the bit so bit it North XXXX back. lighter story. certainly one they for that the talked little was they -- of on to vacation we were Europe, Europe kind And load in we a versus European factor came about part that little be a but as and American terms on of to May of a expected also And in call, roaring just

about what or can they spend they afford spending. are think So I what to less it’s

than they are obviously, see the for because are on substantially booking -- again, was they were typically we XX were we things days what in were summer that window. going book, we a these I are normal Europe. to into the call that margins it think delayed And more by a would XX it,

Brandt Montour

XX, And an they’re have all terms in the XXXX if helpful. Icon a something eventually the super up of meaningful, you reopening. on expansion those yield in China of you and here of things to in CocoCay That’s quantifiable? sort the guys tailwind with How stack Okay. would X then year exciting docket

then And is a year anything dilutive in is I I dilutive ship, then but brand there XXXX? a yields be it’s could because of restart to new it’s guess, in China, and sort a Utopia mean, short market.

So about how that? you. do Thank think we

Michael Bayley

this both Hi as China we’ve thoughtful. feel far And Utopia being Brandt, see is positive are Michael. we’ve strong don’t our as We And game very seen very about big, And from we rate encouraging. incredibly China. dilutive. see been bookings, We certainly volume so changer. and a what

strategy destination about to hardware also into putting the brand. earlier the first new and mentioned of the cruise with outstanding market because to excellent for Jason it short really As product is combined truly on-ramp

coming it resorts of lineup and really that to gap and, we’re land-based between also gap ‘XX new this is products significantly, as quite no that feel fact, has narrowed when talking going add look products, land-based online you to product very about, like I’d indications on been in positive. or And experiences Utopia go wonder particularly versus at some relates exceptionally we’re where gap. about we positive journey. and The there these top and in to and So Icon our

the positive what’s booking a products, as of we from the we see terms excitement these in think about feel at both activity occurring products, we look their XXXX, volume about and very in we as these for impact So XXXX. we rate as see perspective,

Jason Liberty

is the goes every the just when ships things comment just this One some the our also it’s demand I of book. side growing. think like-for-like said what of as and the data the other Icon our of But it quick hardware is new for very has break book. just in I and inside yield it’s and I that have will there commentary. commentary booking record think And bookings at XXXX, certainly new Clearly, important and look is into on not we we -- strong incredible broken, left to is the that probably

So to most of that XXXX. really relates commentary

Naftali Holtz

just first was Brandt, things. this to returning have we more are of bit not add half load we two a I’ll lower. year, factors, little And but is, Yes. the normal One the obviously year

yield So next that to should also year. contribute

On process cost year, the obviously the to on year, yield. the for we’re next that we obviously talks all and XXXX little and the hand, now considering will impact elevated be planning which could are do the than that of bit other we a need this in some more

Jason Liberty

Yes. just is came ships of dry dock a And had of elevation on those the windows. that the reflection out that COVID missed

just so a little elevated in will but bit point. And it more be in XXXX, a

Brandt Montour

That’s Congrats, me. it for again.

Operator

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

Vince Ciepiel

mentioned leading-edge onboard it upside into kind Thanks you by on X volume trajectory. more. I And nice XQ think, of really the I bit you but mix of basis, and seems exhibiting and was a X think by nice to points, going the to to maybe XQ almost yield when points. a see a about, a the of on the the results. I know you into wanted to when little business speak beat on ticket consider it quarter, price books dig

finding So if kind of curious balance could the about approach you kind your you’re booking informs kind the on comment as in that to curve. of XXXX how that of thinking and

Jason Liberty

hope Well, doing you’re hey good morning. well. Vince I

drivers the one of back remarks, or what key guidance today from of to of for As May Naftali half factor till his commented in all normalized. the the look of be -- at year, difference price, is load the kind we really the we as expected drove opening had So right?

think to periods. we ability than I and so previous higher to higher our continuing raise come And demand what seen significantly have been levels, in surprise at continue us has been levels to has to a in price just

a it just more think our I our tailwind huge just one, think, teams our have keeping and been preference and customers ecosystem -- talks more so I for also executing in to, brands. And I has us. been our how commercial for well mean

And combination to prices. that I value a is of land you to ability kind driving when that think add gap things just based the to raise vacation broader of just our

gave are our be low double And terms That rate going to relative increase as the to in year XXXX. we of full the APDs price is better over back not of so in take guidance up even they’re than we we’re we the for reflection said the really earlier, is demand. bookings it’s half where year, really the as mid-teens digits of we our for impacting to a And as year. had increase on seeing this significantly and anticipated pricing, when point we that earlier

the onboard of component customers price. which out obviously our effective just the the has been spend, then driver really, their to activities ability And curate is of -- friction this a be combination of much take to of and our to of degree to is process book the on ship. main more a that other But for

do that of points have exceptional teams balance onboard commercial us our is are a a early still ahead that resolve, there’s an -- day of able spa more our there’s also back job deposit to that their a day spend customer lot to to a to booking booking of of of especially of but of to here take time. and we’re come elevated give an also innings and And those as really to which reasons There’s see try their our course, surgeons great for on we really doing incredible spend ships experience as moving them that. goal of just instead friction guest short the doing And and guests curating ultimate [Ph], appointments able bookings. can our they’re to having restaurants even in to on that, benefit forward, done supporting an

Vince Ciepiel

color. to helpful really That’s Great. And in little CocoCay. on a wanted bit I zoom more

decision to think I send closer maybe that you customer think that XX%. what towards around of falls Icon terms guys kind you XX kind where XX% CocoCay the are to with desire guys well? as of -- how window there were of XXXX. on in within to million you or And about Utopia million CocoCay X.X repeat take to track it’s this Curious to to just seeing a path passengers feedback in maybe and visits then year. about $X.X if

Michael Bayley

sell you lot X And going it the Perfect reasons Day, Perfect of is driving it people It immensely. -- is ships demand and is of Day value accelerating. that I call mean Well, -- really experience for and repeat an rates people the thank exceptional is really the to that Vince, Perfect the back are Day. a the the to question. perfect. we see booking And customer it itineraries Perfect we and Day. delivering

look Obviously, of year the As in Hideaway at XXXX, time Day end we’ve XXXX, add increase of X,XXX the going in by volume will that to that’s got XXXX. guest, year. Utopia Beach literally Perfect planned and we’ve to a of we to and this ability open to people, about our come Icon online for more at December Day this Perfect gas in

Beach We’ve and Club have capacity through got XX%. also So moving that as Beach the promising environmental if allows increase which processes, it’s Perfect Royal on then and is looking we’re us in various and of to the opening in Nassau, summer planning approval to Royal governmental That’s continue you. Club permits what its Day. into our

got experience, why going into Beach So genuinely we’ve the straight the And and we when along Day, short ultimate Royal add the big coming online feel with that’s, Utopia Perfect that of we like market. have weekend. Club, you course,

to without we’ve the So feel that Day these don’t ships Perfect experiences. it’s for I It’s complete And great we announced with Perfect It’s that’s delivering Perfect would of also we’re Day, that to combined vacation, recently, they’re right. really course, to guest more incredible sailing got an Day. a team. be assets, but within so it And the of like excellent sailing ships obsession on great do the as Celebrity product. somewhat we brand the perfect focus continue celebrity think well.

to to a So Perfect success, we great our guest continue refine and to see it, and plan we to we it continue Day. to as develop it bring and

Vince Ciepiel

makes sense. That

Operator

question the Please comes from line next with Matthew Your Boss go of ahead. JPMorgan.

Matthew Boss

Great, nice quarter. thanks on and congrats another

future on there the are think that you’re trends you’re new on indicators acceleration And that down how best to any seeing multiyear to to both between ticket cohorts? XXXX. at spend maybe you and metrics? in softening as about I So in seeing to any to break sustainability point any relative elaborate existing versus that crews guess trends onboard all lead passenger

Jason Liberty

booking, get all volumes that of acceleration the see we’re on pre-cruise that you One book us helping we’re And first, of guests few to and say curate that able we’re willing better Well, in -- think that I more curate is seeing are of thanks, things the Matt. to online the I points. a time. take are Well, directly ahead cruise actual share of experience. just kind we’re getting also would book wallet the can the doing that that to with friction we’re I think because out to them of the because

And of place price that them friction -- it we just so experiences. tools to taken some the it to commercial is make of lot but it it it book and of put is lot of in a for we’ve out a the those easier

kind And think so a big of that’s acceleration. of I part the

The other we -- in have which kind think that the really experiences of to is really best offering destinations best feel vacation best We guests. do we’re have. the acceleration we the of brands, that is the ships, preference part excelling here play I we or our think that accelerating for the the

also think a I thing. So that’s very important

storyline, seeing of course, in out we’re of of of that we’re indicators of the we’ve based to to when of there But what today as really the said release and when course, no continue only we’ve -- are we in seen what talked the set from in continued off in acceleration there’s indicators about really put ability softness really booking period guidance, everything our to seeing our And what we it’s we period. a raise environment. today pricing. acceleration in And we have

side, and in I onboard versus emphasize play But a so indicator any see what it’s want this kind the and think -- weakness. seeing the it’s of of just into at just think strategies I I seeing coming execution you’re that’s I side, we booking is ticket market you’re to environment, important. lot whether think don’t of long-term think -- the lot is of I what on -- a So on whether point, just the necessarily riding

Naftali Holtz

add yes. this made is still obviously, there, we just also, closing land just value a we great gap I’ll I’ll a progress see as to based Yes, is on the add Matt, vacation, just some the from gap and great core market, share can that with cruise, right? market success leisure opportunity And to And then to really grow our see you the to new of strategy. yields? to continue global taking that’s but

Matthew Boss

then And on the Great. bottom just follow-up. a line as

Or as back multiyear consider about relative So as peak at levels? that plan EBITDA reason margins we levels, as is ceiling? just any model point which would unlocks consider, accretive to to looking and think any there a prior pre-pandemic Trifecta to to profitability just this

Naftali Holtz

Yes.

are yields, Trifecta per have we margin know, opportunities you to camp. costs, and grow we right, does our that, as beyond as levels, said, XXXX And Jason XXXX for lot look which you least triple So multiple continue per base kind but expansion EBITDA that’s business APCD, acquisition on a at growing grow a at sure. lower obviously scaling levels the just the ambitions APCD, us, if above as is as of was for It see we of EBITDA XXX. triple-digit

Jason Liberty

I puts risk. at there structural would But nothing just add, is Yes. that say that I’d

this to leads as is year moderate, focus on, our cost margins again, call a is change yield control yield $XX business. about our cost $XXX grow Every and but in X% growth, which growth and know we need what think about moderate in our we our million plus yield is good X% expanded change would to million. moderate this I I business model not, we

than your to grow grow costs your margins. and faster you’re continue to expand you going your yields So to

Operator

I back call the remarks. will turn for over CFO, to Naftali Holtz, now closing

Naftali Holtz

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

Operator

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

now may You disconnect.

Royal Caribbean Cruises (RCL) 27 Jul 232023 Q2 Earnings call transcript