RCL - Earnings call 3 2023 | Royal Caribbean Cruises Ltd.

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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 the Royal Caribbean Group Third Quarter 2023 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 joining today you and third quarter thank our for XXXX us everyone, earnings call.

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

of be will reconciliation on which a adjusted Unless earnings are release. our a as otherwise, circumstances non-GAAP differ all our Before started, and of materially on are with morning as uncertainties. in on found refer our do Investor defined, non-GAAP forward-looking be metrics based measures, management's from to discussing expectations we our change. Also, description current constant certain state can and and website as Relations all are of I'd to financial items currency on could update filings the quarter on Naftali note factors. these be and adjusted we expectations. will factors providing follow are as we earnings we forward-looking Please call These to the environment. statements our results will of a the undertake number our statements update on latest with booking recap the actions to our and a actual business. get subject any current not this release overview A for We SEC risks issued making strategic during like update well an to basis. Jason third that will this a begin and cause call. by current statements and

Jason. turn for pleased the to your over then questions. will With to call We I'm the call open that,

Jason Liberty

Michael, and you, good Thank everyone. morning,

to a attacks should a acknowledge and horrific East society. low. I events the The and attacks would situation devastating the place brings barbarity Israel place ago two the Middle shock scale Before we weeks terrorist over us Middle in taking those the no the have in East. today, of to civilized very in like dangerous first The on begin all

are that at the of so loss the lives war this many continues heartbroken innocent in We day. then and

have members aboard including effort with who to heartfelt many Our out are State of shoreside our working crew, to have from and the recognize of with team. I Americans all who been also My thoughts Seas, the U.S. goes own Israel. been like teams the Rhapsody incredible all from to would impacted, safely our gratitude of involved. help Department evacuate tirelessly

As the costs deployment Most it of in provided few had the about and our relates $X.XX capacity will services in in was to with X.X% The forecasts. impacted adjusted were the evacuation earnings bono included per in itineraries business, quarter the government of the home of in the adjusted, on fourth U.S. amounts the quickly remainder of including financial events Haifa. to for are of the Israel. porting visit year, Seas to of our impact and that canceled the Rhapsody pro a Combined these these impact our region about planned share. sailings to

business. Now on to the moving

quarter us XXXX extremely as solidifying strong delivered responsibly beat This vacation whose team of XXXX and the by want Our beat best and and to teams close we very experiences Group deliver our positioning year XX%. strong XX% banner guidance further enthusiasm generating results. financial in us for to entire of thank Caribbean another as while well enables Royal beyond. to job midpoint the delivering yield outstanding I dedication have a a an EPS on is done improvement the

memorable vacations satisfaction and all delivered the itineraries X third During expectations quarter, guest scores. exceeded our a record already we key elevated as exceptional million

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focus continued As the in the guidance environment yield in we the look experiences well booking ago, on important demand deliver and combined very encouraging factor twice performance program, positioning the elevated we to drivers unprecedented stronger business results. is XXXX continue year our year. The a of announced XXXX that been to the Adding an as pricing our that, for our us XX% the to certainly full main for contributing and per cost to and third healthy environment strong were over performance we onboard our and year, brands, outperformance. the to acceleration leading build is for share X-year Trifecta. growth is has The demand year the demand strong in with for beyond. A for earnings original quarter acceleration financial our

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our way we from well see to on can you achieving our results, Trifecta. As are

Our for unchanged. I margins, success capacity as enhanced and financial superior profitability not this strong growth, yield describe would lead moderate moderate, although Moderate to performance. proven year formula and remains growth, cost controls

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beyond our is well However, and not our base camp ambitions go it. final destination,

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deployment and accelerate ahead for the is earnings in position and and markets a at positioning yield has consistent Demand continued XXXX our China rates XXXX to X years resulted by return growing all to relatively Our X% with first has another levels a for more is time us of This wide margin. by capacity further higher consistently in prior for growth. that a less of slightly booked years. across with outpacing year is with strong bookings slightly Europe Caribbean, XXXX

significant And in making on While FX towards at anticipate we goals we current based least progress rates, will and early, anticipate our XXXX. earnings start still a $X trifecta that handle. fuel with interest

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to that ensure nesters doing it has us to the seek again time our return they brand to time ecosystem. and leveraging does continue each empty in From capabilities what it as families and customers best, for We continue commercial needs to capture young will while our to enhanced best to experiences. what keep vacation

exceeding to quarter Cruises at take January. In of delivery next game-changing Royal later the International plan will Icon the we the Seas brand. XXXX, In sailings Our us innovative Caribbean Hideaway delivery Pre-cruise of allow just the of delivery offerings at take will in with as and Perfect the and Caribbean our already we And deliver superior Ascent. to Celebrity the revenue is for continue onboard few Celebrity of With our International paradise Beach expectations. Seas Hideaway Silver new the enhancing is debuting of Royal take Ray ultimate Utopia ship, while in are love. Also Beach. of bar Icon CocoCay. Silversea. know adult-only the premium for beachfront travel our class differentiate our the we to as January first at for raised new margins. In and Beach time Hideaway newest guests and welcomed Silver August, industry experiences arrival what Silversea new our evolution the of XXXX, well offerings and ships in of the yields beginning sales end Day Nova, for Seas of for each this weeks,

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to significant seen customers increase this new a brand have in year. new-to-cruise We and

the those about ever much brand, were also who cruise APDs guests to the at continued than repeat those spend while about the of purchases In now strong loyalty than the third customers to in third or doubling X.Xx and for it through who prior quarter, booking bought make friction fact, all on higher third onboard purchases to easier remove quarter, We've experiences of their coming guests made before satisfaction. quarter, board. our mobile XX% than only and guests years. X/X their indicating purchased app. In cruise pre-cruise with in once prebook rate, more to In X/X of new activities approximately new the

into we prices. look higher before to and booked we cruise of over pre-cruise at As amount with compared revenue have the XXXX, their year guests more double engaging this

platform. I said excel strong continue success for margins, yields yield remains business core efficiencies to excellence We moderate it it's before, again, growth in across worth will capacity capture and our and will enhanced We performance. formula to superior our moderate order increase cost controls but and unchanged. the to financial growth, mentioning lead and drive in profitability

inform long-term basis, profitability our ensuring goals. strategic ambitions that and on achieving financial always while we act sustainability decisions Our responsibly a help our daily

We the and the planet, energize are sustain Future making commitments to progress SEA innovation. on communities our accelerate

industry to by XXXX better to helping are in multiple exploring multiple us carbon-based and we resulted double-digit achieve and options types making deliver our fleet also flexibility of progressing reduction a climate a we our carbon the existing are while understand in in reduction mind. This that Net strategy The versus will for for supply intensity are low biofuel XXXX a Europe, XX% past to in multiple trial design Destination of a also the with decision XXXX program help towards net cover we areas. in fuel The carbon We now XX-week first quarter, future dynamics. a position in ship while operating by Zero. fleet trials concluded the chain solutions zero

lifetime Royal with achieving performing our significant Naf? we that, bright Caribbean customers Naftali. I will allows new the progress Our strong for while of making also are reach towards future delivering over well, vacation business turn that records. proven exceptionally financial shareholder long-term it and of to experiences is Group Trifecta platform to we and strategies, value are our With a creating goals. The is us

Naftali Holtz

good Thank you, and morning, Jason, everyone.

start Let quarter me results. third with

European up were higher APDs teams Overall, the better-than-expected of the strong of itineraries better-than-expected adjusted load was with the another guidance. quarter of about they XXX with XXX onboard performance midpoint guidance. driven midpoint our finished XX% contributed July Alaska. Rates and We factor XXX% and of the versus been even by increased July as well and quarter higher of the points levels. NCC, approximately the XX% higher have to points a Our than XX% yields, XX% consistently earnings as return in driven costs. to with net almost the remainder to basis as were factors third XX.X% mainly July basis Caribbean third guidance. up yield of than costs our with delivered by XXXX, about share load favorable compared per our third fuel, the quarter excluding $X.XX, performance historical lower XXXX, Lower operating timing to 'XX compared than

the margin. We continue of costs to on growth versus revenue levels. nearly line, to outperformance of our the deliver earnings to maintaining Over delivered the with EBITDA Our line on bottom quarter, XXXX higher focus broad XX% expand and to dropped in expectations. teams quarter the strong an top XXX% adjusted margin while third leading par EBITDA during

We in both a sailings. continue with record for booked the pricing XXXX to along yields see and basis. forward-looking strong load a resulted position demand in This and has record factors quarter, on and higher-than-expected third XXXX

across number that the Europe, repositionings, are Pacific region. Asia fourth the XX% Cruises. Caribbean, a quarter, including about from will transitioned we remaining itineraries, Expedition fourth capacity of other America The in our about have itineraries. In South summer Now XX% to the of capacity and many spread in their in of the quarter, in their XX% ships winter our and is be

turn year year XXXX. year, to XX.X% the for increase as are about now net up basis be a X.X% Slide cruise XX.X% prior guidance. 'XX. to XXX of the expected growth talk for X guidance full expect the Net of let's compared to costs, Now full midpoint X% our fuel, the to excluding to point We yield for our to full from

our Our Israel that approximately cost changed basis July to due We included outlook impacting XX by fewer from points. has APCDs NCCx however, canceled the do, have sailings slightly not guidance.

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

margin EBITDA back is our to the expect to record record previous year an in We EBITDA XXXX. APCD and that per for continue adjusted

sailings of summary, we per $X.XX share included approximately Israel. in $X.XX as earnings that it FX So includes from impact to adjusted and fuel and $X.XX expect as negative rates well

up XX.X%, basis points to will from increase the also of both to I is included that This elimination be excluding about range new to APCDs. discuss significant expected Slide and ships. related to be quarter incredible our hardware turning reduced chipboard Silversea. NCC, the X.X% basis X.X% related a driven approximately impact Now XX.X% sailings in fuel, up XXX includes guidance. by yields our lag reporting fourth like-for-like are ticket negative quarter and Israel XX and points X. for to rates, impact to to including from expected Fourth

the $X.XX As fourth sailings rates impact $X.XX as from expect quarter. Israel. earnings we share, for FX adjusted range a included This also to includes fuel as per that of $X.XX negative for and well

is to a Ascent timing deliveries which Now we ship I as still the most while dry be growth Silver from quarters in X% XXXX, to pronounced will share year up be due docks. for benefit and is Utopia insights to and early, introduce first exciting shaping for Ray is and Nova. and timing Capacity full another expected the company. XXXX Icon, Silver up year the new and third the of of of capacity

and capacity will of in Caribbean XXXX XX% about growing represent deployment. overall XX% Our is about

X months Seas of We and about a of the sailings on Icon Utopia. year short adding of full are Caribbean

at Beach. with expect number of the to the of Day increase addition Hideaway Perfect CocoCay also experiencing guests We

we X itineraries a total experience X.X itineraries for X% million year. QX As result, million of XXXX. Pacific Asia XX%, will capacity will XXXX. to of in our for China in of for in this account for of next a XX% will marking our guests X.X% Israel XXXX, Day up Seas to Capacity in will Perfect for account Spectrum expect than and Alaska year. European the account less about account with return itineraries visit from

more that throughout which closer in are are years. our expected of are higher book typically a cadence factors load our few Caribbean Jason China, all As influence despite mentioned, previous This is and than factors yield the XXXX. having to booked growth itineraries in. There short both APDs

driven deliveries, the In to ship comparison by in growth to the the addition return year normal timing typical year-over-year the of bolster will back half. variability half the the of in our factors new yield to first load

annualization benefit of also this will during power quarter accelerated the that year. first The from wave pricing

to Now costs. moving

costs to we remains to control and our focus revenue seek Our margins. grow as

to last timing benefit have few compared in In dock days our we We to expect dry also actions XXXX, we taken cost double because have pandemic. the of docks dry years that continue from the year the of reshape throughout to to the all this structure.

Beach are has Day is margin, further In to launching accretive CocoCay we at no that Hideaway addition, associated Perfect comparisons. it with it, at cost while APCDs impacting

the we formula. year. Outside Beach increased XXX expect increase basis our of cost the digits, We negatively low proven consistent dock very and dry approximately next Hideaway with days impact NCCx to that, opening expect by of points single to

earnings our items another step details our earnings our certainly accelerating more growth impact goals. quarter year an call. pointing provide position demand growth will yield on during solid in the and of financial The and accelerate change is these we of of book fourth towards as a combination environment strong We to Trifecta

senior reduce $XXX into Turning be that, credit remaining to $X.X million to funded This million facility. in notes and operations, demonstrates the our and the capital company's with liquidity. expect with XXXX. year. Debt and to execution expectations redemption June contribute quarter, and position by the in us balance flow June $XXX for of million cash to debt disciplined $XXX credit liquidity. existing redemption expense billion levels XXXX. In sheet of debt a facility and to due will repaid be flow allocation actions to With in we Better-than-expected off revolving the The over the reduced generation compared credit close away balance our from XXXX we to paydown issued $XXX secured Xx we mid $X refinanced our the high-cost new our accelerate October, earnings of pay including goal in notes the with leverage debt. achieving going at of million billion improvement. Also chip quarter billion our has support we as our confidence $XXX secured XX.X% of of continued ended $X.X leverage end the sheet. October, initial credit cash top financial the billion new We priority. by successful balance we term in and to facility interest forward due loan multiyear XX.X% in increase notice investment-grade $X.X a of and during revolving million continues Strengthening further the debt metrics. Utilizing sheet a reduction our allowed

strengthening commitment credit with sheet credit being also X a the recognized In upgraded BB- the is by notch BX outlook. positive upgraded our to quarter, third balance notches by Moody's Our to to rating agencies. and by our credit S&P the X rating

delivering accelerates debt operator methodically the closing, opportunistic and continue down With and refinancings flow, As on generates and our a to call that, committed mission focused business Trifecta of the in for we'll session. on while strategy executing pay open ask question-and-answer more and cash goals. our Trifecta our I goals. In and our will support proactively achieving remain we to pursue our

Operator

Our the of from Stifel. Instructions] Steven first question [Operator with Wieczynski will line come

Steven Wieczynski

kind kind you there have some just much guidance I us appreciated. for provided also given fuel So essentially your and would of better, Jason, And is I anybody with structure. say than higher out XXXX, the fears probably cost those which expected around costs think, of much would

that guys cost it, are to mean, XXX, as year yields basis let's normally, XXX, be we costs, call maybe to this But to see think expecting points. we on the you pace that and be whatever, your spread points. close XXX between I XXX yields So by, outpace your basis about spread

$X, that to spread year, again, about guess we XXX on to north be here I'm about you just probably XXX think cost need that to up it, our given call get that I fact number EPS see wide the talked is what Naf getting being pretty math to let's So points. of at next basis based

be this that pretty year your all point. another So high at that expectations next for I'm saying guessing yield must way is

all that hope I So sense. makes

Jason Liberty

only of as the because yield all So with And we're obviously, as booking for ships interactions destinations, with high accelerated been demand strength that at my we side. daily course, the really guests, And place we're in have you the seeing booking into incredible in good but since I projections that And strength been remarks, combine the also to not for been Perfect noted in our of business, day on more of our for we've we where for in and just to Seas also very terms good see business, of we feel book XXXX, coming an year. our not booking, and volume we've when the XXXX. the pace on volume. course, next very demand well our lot the year, at improve Icon allows of we as look are about like the feeling booking continue we and year. And to rate brands, but us strength level activity places just in early with bookings next hardware this about as a especially volume Hideaway, for of our of of seeing

early still of a per just of to outpacing has by to delivers of in our where improve costs, course, on driven sure additional course, year really cost next margins in growth which not incredible out, will we're also Hideaway, and our going that ambition but yield APCDs. most are internal unit And our profile our as is make basis dock always pointed it's place costs. but Now our Naf yields which meaningfully days is a guide, dry no we're general as so

not that, all, on on all on improve to only to continue I overall also stress ROIC an we important earnings think expect the $X. expected was start in we organization. with basis we least that comment side a to good. it's And So at my feel that And to the just very

Steven Wieczynski

talked customer year. about of Israel as again, or less going year. with a on But the maybe as about for for just -- kind less think we you Naf guys of there's of lot disruption than the that's think demand than you And it's Clearly, next the are a it's next little pullback of probably of it's Med bit Med, that. whether to do But see a you And kind understand about obviously, thinking right rest to talked rest we Western early Eastern now. and too then your expect I combination of next And X.X% around kind moved about Europe some how really year. think Med, capacity your from about enough be ships of much really pretty or capacity where of don't you have pushback Or think you customer there much your base? both? will

Jason Liberty

we'll capacity Well, and other bit to our a have look About sailings on the half European next the year, from little for the at We less guests half in around and of X.X%, the we'll from Europe. continue that. come world. U.S. commented come

think go. this we're worried products. And to And occur, risk. I continues in really it's historically, these too to the around it's we're need Europe North what and it's commentary when something all remember, of vast the about typically in It's about our in in do if our seeing that But potentially acceleration weigh at a really XXXX seeing point that sourcing America. on of to going in about market, year. not to horrific psyche, see about little any is just nimble this bit be a we next our all guests on is or just to have majority kind markets. consumer we one obviously, our pretty not expectations want And think early outlook for if I we in could that's strength but all situation course, we demand the they of time. platform not of see capacity one a where product, about that terms our of we're just have that, shift of of

Steven Wieczynski

And sorry, more. Jason, one

be dropping? essentially is are to an here I clear, from guidance of unchanged just your this remainder that's all cost APCD XXX% is Just the the happening mean, -- for year APCDs

Jason Liberty

correct. That's

Operator

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

Robin Farley

know -- to only the back that One changes X.X% two I questions are circling My is two touches actually with it's same you on. just mentioned on that topics.

you it's kind a that where have existing if But any going -- next think just all there still where have same regardless wouldn't are are I a are of there moving at But there out for ] of on other you if ships not into seeing you it's your would of where markets? the single I just necessarily it's an of getting digit you're dropped, you're some supply port companies. impact? but ships your say seeing major other moving the know kind demand tiny, any with to [ shipments? Or ships, year call but continuing what's itinerary. ships still for to that you redo Europe level, in see obviously

Jason Liberty

with our capacity have not And pretty shift a think we just started least of bit pretty is I tell, off, us, of competitors would but that probably at how of magnitude do. just little a more start I is which we from off, Robin, personal also than what can you digit, this that immaterial. is low single

ships first heading for of our us, small for into the that's gap more modified So broader think in West commentary not I much to loyalty in further would cruise, think the Med this into impact pretty focused first we deployment, moving close of a it's if Mediterranean some -- heading it's the shift I immaterial the Western Eastern is maybe ship a mean, in change terms the just things or our industry. And about to like like to business. out the power our vacation, much, and we our brand, actually then ecosystem how on we are that getting land-based -- do we're base or

Robin Farley

for ways, the some is don't that was sort any basis dry just that out say, further very breaking helpful. piece Thank nonrecurring year. of just what next you I timing the the It dock sort of on of of and have is piece a you of in if And the XXX of then expense there's for because know kind points breakout increase.

I So any on that XXX more bps. there's if breakdown know don't

whatever from there's year would giving degree offsetting there bps expect know than But there quantify, expense help And if of think you you're clearly any to offsetting, would sort to more would not full What you yield of I the I Hideaway. then some that. way be is guidance.

ongoing So investors think help bps just about I range. XXX to of is, here, really probably which closer what's sort to guess, the

Naftali Holtz

Naftali. Hi it's Robin,

So I so basis to vast as docks just related the and XXX majority. dry roughly Hideaway, on the mentioned, cost, points

very So is what Jason way it about to say It's a again, of excited the XX% we're but and is remainder I'll think ask dry docks nice about year. Beach. the Hideaway said, it like about really just next

drive more always intending we yields cost. what we're next And definitely, formula, than year. to to grow that's and strive Our do

Michael Bayley

I a Michael. have to second. in It's jump for

was demand Just I on delighted it's you, it's you we're product and new gangbusters. business, far And we at are I all for spectacular product. online with Seas, It's and high for level. of weekend, product the changer which that X to going to started and tell launched incredibly with for been the a of comes we the impressed really this ago, it has already an Icon game exceptionally the exceptional. up and in best-selling perform about Hideaway weeks opened there Royal have pricing sale last is I course, the ever We've to continues our going be history to destination that one of update Caribbean. the by experience. And because of a for mean, pushing we've

we've straight and selling is the to into really exceptionally again, that, the of at summer. And us the Icon shorts Utopia combo is of going already then, with record And exciting. in Perfect for volume. got So Hideaway rates, Day course, record market,

'XX. what's So of on in we're pretty kind in the next happening switched about year

Operator

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

Brandt Montour

a strong Congratulations on report.

XXXX part cost I'll of comments second at I the shot the Naf. from a take you think

I those Icon. should all of know we think along and very and sort single more Icon. when of were there's Because about dry, of cut digits? the very is would digits, we two down, all factors in there, think I history think a we though, to expect what we there? on and then model what have -- doing about How But pretty I low you and rollout of that's right? push pre-COVID would try it there's sort we Icon cost low when base cost think come single about your that of APCDs line. When with right, think over is China, the China,

Naftali Holtz

there's think it. things, just Icon is other actually venues -- a too, of I on Yes. First all, right? there's lot of

comfortable yes, board. So lot of a experiences China right, we're ramping we're but back. there a market not it. year. a And is very we obviously, lot that cost APCDs, of there's manage on digits low of that the offer our also into there's across are we're go and into very the up. a coming the we are But just today, we lot things board going as next with you're And single is we And commentary

Jason Liberty

capacity to just year. at Obviously, add I our in. it's Jason. Brandt, And want is next X% growing

can kind sorry, lower we're getting that's docks how dry were business our helping continue And excluding single-digit from just critical which improve to process And -- overall we we disruptive And digits, sure each more we yes, do single that efficient, Naf organization. We're objective parts making structural, able every calls different believe and that's technology low benefit of costs reminded that's an the to of get me. to certainly and the year. why very very and so produce Hideaway, low which them is that service efficiencies. and new much are more in objective better of also is and a employing beginning

Brandt Montour

the And tells EPS a lot, then follow-up, obviously. starting just the a point as $X for us figure

are when in $X guys' heads economic get current figure. Or $X you're budget your environment? the at in starting current to think thinking think environment? process starting of at any your you're Just you that do you economic about getting you're a in Do and sense you

Jason Liberty

it's think $X. of would say, the I we're I is that saying Brandt, -- to one it things with will with the going at least start So start that

now $X, look There wouldn't X Pre-COVID, we're years or handle, significant have to seeing necessarily proposition or were, nimble I we're like it, XX%. now. XX%. is environment XX% think a value value obviously, it that from just So differential thing. And at or peg which will what platform. months year it's somewhere now I But from pretty from predict is around XX%, land-based a call X we impossible a we Today, vacation. important to the $X just or an to a it's

we're the this a to there's also cross the would and of operating in keep consumer that lot that we in a So well booked, there year in. I are theaters position. value for get if will we're mind changes pretty booked strong very

when so which an will is the important made our we to those months people already the for is as at into on thing we thousands the books, And consumer we have that here look bookings that experiences consumer, even I they're decisions. But have think making at into say, making They're are X has a least will lot XXXX. of on today. X XXXX, from we're of call, I bookings bookings making already

So incredible the consumer good where a going is off of in today. standing brands, consumer at how is visibility of forward, pretty vacation on least based looking at our our things is on the terms experience

Operator

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

Vince Ciepiel

few question. cruise. picture Big dynamic you're book, are kind really over seeing order Curious the you in new of the industry of some next and supply/demand the it on performance the like out side, your the strong well as this years, seeing demand then peers on to what in and seems perspective

as trajectory So mean what in the well. ahead that could of demand for growth years

Jason Liberty

exits a we not around seen it haven't the the potential orders we in on as order over really of that what gross time. there's of lighter going lot X%, point really time. little grow books least of a changed a is bit more this on book late. years on potentially industry going the to basis is That's at come five a So at new number And can be that see be some be if kind out here could side, to can

have a we on think I So pretty supply good side. view the

point to how has significantly then experiences. here brands, more really out focused a lot conversation about COVID, overall I loyalty, really new of through I think in XX is about new I of I flavor strength. strong short, more getting through brings into the don't just also we The or industry cruise. the think about family I'll are new having we last I side, these more mean, industry, Oasis-class shift of think which -- indexed grown has land we to think being it's worth, think, make think a us we know XX recognition our new think And very we to to is on ships. brand, of think point our coming I on think focus cruise reps X% we I been overall the think when point another about I of vacation of really towards cruise and demand on cruise. the is more out but the guests just the it's conversations more and is a our vacation travel focus and need leisure, kind I is, also really strong. And cruise or like But

they similar at skiing, how get worth that cetera. we we're about to that's half do where be close very much and or et younger on us with how we're gap, ships. the that really of seeing land. were, if focused gap we that to back can look look XX Vegas go or Oasis-class more Orlando we also So to generations probably we with close can continue competitive to And And to who

focused heavily to do on that. we're trying So

Vince Ciepiel

started deeper Great. that the I and like on X% or just year yield XX%. think to And looking side, up then digging you're around you about for X% now yield to a bit something into this little

two So core slice percent surprise that? biggest terms of new that how would the kind parts. has led in been hardware growth you CocoCay contribution, And positive What's XX-ish of then up that to price? and

Jason Liberty

we Demand is year, than in that would board, is onboard up course, of But for for spend have on ships really across been the our our right, you're there. like-for-like original expectations seeing And What is certainly that. guidance new expected. our the meaningfully significantly. then higher

one that's has it's exceptional I of going our thing, places the an versus this us value position continue really be to brands to Day Demand level. gap a there's have vacation. rate exceptional for year. there think to land-based not been at ships Perfect in in for Demand like wave to that and to So has at been starting increase put levels bringing out been closer us able

crews Now mind, keep coming I from think COVID. like kind everybody else lagged of back in

I think from we're And that. also so benefiting

Operator

of Your will Dan Politzer the Fargo. Wells next from with come question line

Daniel Politzer

two capacity and Europe year, and bit a know we about skews as of seeing? And or about I you're And book contemporary as consumer maybe coming the trends you're to was we I about those but a difference little wondering then relates luxury. similarly, next Mediterranean a a thoughts if that brands you and more pricing any only off could Obviously, year. pretty about strong bit to kind luxury what kind it's between little willingness European talk cruise, maybe think your and think we as XX% as should it of of XXXX subsegments? think

Jason Liberty

it's least been contemporary, in at demand strong is experiencing been whether expedition Sure. premium what we've terms standpoint it's whether of pricing space. a on in there's Well, luxury the space, or

elevated the Royal through been Perfect Day seen I year. yield we I'd especially been had really that. of a of has going at have to across much would this ships, than has of that course level. But this load been for little, add seen, there's demand and significant, for We to think more expectations that the say, I you've improvement rose anticipated And that elevated also especially our factor returned we is load course to also normal which year, earlier brands. our all the factors an

we seen of least But we I more strong. side, continues right the You at it what the we as does a we are seen. into typically demand get is the end pattern-wise, see is that January little premium historically luxury European side when gets year what to bit and it And things. to on in bookings really which think X- that have on very have window, think towards we to booking start that to European this elevation be skew as we start early and overall, of X-month the

Naftali Holtz

were we year but the I'll Europe, Caribbean, very has been just across that very, yield pleased is something what said, seen summer demand. season along, strong strong all the as with markets, And add in growth. we pretty also we've right, with double-digit this

Daniel Politzer

Eastern you a I or to think to at your about relative can there a that China give coming And have it. know bit. the point more as an shift capacity to off full just there? Got And update a maybe then Baltic on Med, having you maybe to is But don't this trends pivoting you capacity return China? of XXXX. capacity there willingness yet incentive demand

Michael Bayley

Dan, it's Michael.

year. a have of China We of selling next out April Shanghai in product Spectrum

bookings, volume performance, which, 'XX record much the and was the so good, And far, a better brand. both our of course, for rate. Very than

Eastern there's quite need feeling the Baltic the capacity from or not from this point shift product. I'm any we're Med. any China the optimistic at sure So to about

So operating China I with very think China. we're position first brands in positive. indications our We'll in be Western of a good And the are the product. one

it next goes So for how see we'll year.

Operator

next question Matthew of will line the come from Boss Your with JPMorgan.

Matthew Boss

cited, multiyear to you And picture, moderation 'XX. years any Jason, strength the as you market So larger the guess, position to the bookings cited and conflicts? the book seen as you near-term prior how then relative to maybe related the are demand, on note just maybe we balancing accelerating pricing look the that to relative in power pricing recent overseas to have in alternatives? to you land-based share relative opportunity I

Jason Liberty

sure. Yes,

we that managers So revenue in better have of best management the we the getting feel -- yield systems and of world. best course, always they're kind the

that much so an versus minute able of forth to AI minute. are consumer have to and price. automated have using the make we significantly they the elasticity And on at that the so looking volume And very by sure and understanding we behaviors be

to there's on about the position. we been continue And then to obviously do questions do is price volumes. And book what historically, try so build and increase

as at year previous level the years. the to turn you same You be plan when

and to optimizing You our be continue to lower. depends The want pricing be yields. to want really then to you it all ability on drive is, higher, our answer

so key. ] side. in we're the our tools, we're on And behavior management WAN-basefication seeing of [ also is yield these optimizing on focused course, -- and very what yields And we're

European go book calling next be on again, I to Europe season out for to just strong. impact course, go to wants seeing not no we're very beginning inform war, season, could coming don't out for, But and Israel. the the Going It's very to think, there's much we're something year, in side, is to and we is the that for it which start conflict how of European us know continue consumer early on today, going this of where trends year. we're that the next from long

with important what's us, think sticky consumer is staying a sailing who I wants is very we're our to getting be what within ecosystem.

could so us, they're of question where they're to going somewhere And a of focused on with a doing. and we're sometimes it's going It go. not be question go going they're they're to that's sure to making where what go, but

Matthew Boss

the XXs? Great. looking And then as Naftali, relative where levels, today back size about plan, it think we you and peak the to Just calls takes maybe low see stand would Trifecta you for maybe think just to just prior I today. puts we up and a which follow-up. multiyear, the how as think profile as we on EBITDA margin

Naftali Holtz

Yes.

Trifecta way, just a the goal. Trifecta grow for first business. our remarks, basically be in you in the we obviously this XXXX, I kind to -- camp, ambitions So math, prepared if think of said to our will all, the is our And not that. I do which are our we're we increase the right? was profitability year. it record continue but But yet we as beyond year, base back to my we So is But goal, that had in of margin by us

think strong leads to than growth, with We deliver our that grow to will and will -- the disciplined ambitions margin. growth, and controls control we that and allocation, more much proven continue formula, grow continue to XXXX, in had moderate and are to our So margin right? year just more capital go business, to the we capacity really through you cost

Operator

With the conference closing that, Holtz, over Naftali turn remarks. to back for CFO, I'll

Naftali Holtz

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

Operator

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

Royal Caribbean Cruises (RCL) 26 Oct 232023 Q3 Earnings call transcript