RCL - Earnings call 4 2023 | Royal Caribbean Cruises Ltd.

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Operator

Good morning, and welcome to the Royal Caribbean Group Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Michael McCarthy, Vice President, Investor Relations. Please go ahead.

Michael McCarthy

Good morning, everyone, and thank you for joining us today for our fourth quarter and full year 2023 earnings call.

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

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

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

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

We will your call the questions. for then open

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

Jason Liberty

morning, Thank you, and everyone. good Michael,

forever and monumental status a our would revolutionary resonates I impact of once details, quo. makes strongly reflect take week's a a Every a last the to if the widespread while, along the product like into getting Before such that that ship, launch in Icon Seas. so changes to on comes new of moment

fanfare. of industry, to that debuted product, For Seas week the the vacation Icon last incredible

incredible is Icon and mission deliver her going Our responsibly finally the the and her first Icon revenue absolutely thrilled years, best and Royal vacation planning this amazing anticipation, is guests after on experiences that planet I'm the family to weekend. with Group experiences on crew. board to deliver vacation best Caribbean past the welcomed at

of this years partnership the with vacation and you our InteraMiami the worked word relentlessly innovating landmark of and making our engagement incredible ahead. guest big guests mouth phenomenal for millions along with thank our A memories X forward in to ship, the from over Goat, to years, of flawlessly and team look football delivering, Icon who With Seas. sports dreaming,

compared than So Slide see for XXXX now demand you we and an X.Xx XXXX year record as yields our about that talk XXXX. X. January was on exceptional fueled expectations, margins levels. our more XXXX by to brands, XXXX, back up XX.X% and Net let's were to unmatched were delivered

exceeded billion, more our share expectations resulting than by adjusted earnings guidance. net January Our double in per about January our income $X

platform, is our across grow business. durable which leading expansion, to operating continued reshaping operating margin structure continue cost the expected focus the as to we the provide We on the leverage

on the EBITDA significantly vacation attracted is to new robust a Innovation our DNA. And the at rebooking trajectory received targets. accelerated seeing were ships with all guest satisfaction scores points in who performance XXXX, but both record APCD guest and of the rate our journey. an new company's per not high twice and XXXX. that We number and to cusp amazing experience towards direct loyal in destinations, and our in of guests goals to Trifecta we Spirit, are in The Innovate we XXXX our ROIC continue core also only at to exceptionally our

making in the future in metrics. invest strengthening sheet to investment-grade the while continued also significant targets our balance towards We progress of

the Group XXXX both for our well future Caribbean and thankful incredibly history, in achieving and financial and the and so the pricing yield I'm book a while doing volume revenue standpoint. executing company's fourth quarter an from the strong propelling year is in on of ended in of so The growth. incredible strongest Royal XX% and proud with position note at results nearly everyone

have Momentum key start much XXXX consistently rates. last products outpaced Bookings continues the with to at year in wave across all season. higher a record-breaking

our In all X booking the occurred call. last fact, highest earnings weeks the company's in history since

ago we As is a is QX. and than up X.X% capacity did our result, while to a half less XXXX left we rooms in state book may year-over-year, inventory available have in XXXX year for

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

continue our record-breaking direct-to-consumer supporting bookings. engagement exceptionally for and perform well digital channels as consumer enhanced investment to is Our ongoing capabilities preferences and

more meaningfully also beating delivering and our year Our elevated partners expectations. travel bookings than last are

from to America continue of be about this XX% guests North We see sourced year. particularly where demand our will healthy

and appeal attract in model the Our by ships positioning highest-yielding across to the us guests sourcing nimble world. global brands, markets multiple allows our

lead brands successful and are sectors across demand new respective sourcing bases. Our capturing quality in segments and their very at consumer from

to think XXXX and and of with for daily millions customers. both you macro consumer for data trends our look If about points beyond, we interactions demand

travel savings We now customers onboard record vacation. see on continue high spend base remains levels at land-based pricing intent. cruising the and products. booking the People levels. and to double This proposition across a looking goods to with labor at positive to of their in pre-cruise higher gap high book sentiment and continues dream wages, markets, to or activities vacations higher positions spend at and penetration, and markets, value book an APDs well experiences XX% very higher continue and onboard their consideration at were purchase their at us levels. Consumers We see exceptional broader exceptionally elevated elevated engaged Year-over-year our by are us least brands outperform is an engaging one and rates. surplus and earlier, strong to consumer consumer vacation growth industry and from very are bolstered spend on

rebook customers and our to attract continue return deliver and that ecosystem and continue our best satisfied our vacation into to highly are brands to We our and the guests new products. vacation

record-breaking to an year is on as our Trifecta XXXX up earnings goals. growth continues progress path XX% a with accelerated our achieving towards shaping be

Trifecta As year today, our in in achieve a you earlier to targets anticipated. XXXX, several than expect previously can full see release we

said in creates base what destination is I the And an our final as go camp. milestone, well pathway As not Trifecta while our ambitions the we it. it and back describe internally important to beyond past,

we of As during grow ships capacity Utopia of highlighted first of Seas, Ascent in on Silver that Seas the Silver and Celebrity Ray in Slide X, joined X Nova. and by expect our XXXX, with year incredible of XXXX. to introduction service the full Icon the the fleet of X.X% the

to also provide yield but and profitability. enhance only they customers tailwinds our brands, draw not and ships New elevate vacation our experiences new overall

ships we with XX% X.XX%, are strong to fleet, our Loders and capital record grew and the together focus performance apparatus. rate private destinations very Trifecta earnings driven XXXX, of to leading getting growth, grow yields close In expect with allocation that expected entire margins, and our X.XX% to and existing drive our us new commercial continued to combined disciplined year-over-year, on targets. by

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

platform operating than is ever. Our stronger

innovative shareholders. vacations a leading guests fleet the delivering of people the and best remain lifetime on and their We for and for brands have a our and the We most respective segments, best our focused long-term in destinations. value

the which Day XXXX in industry of the leading rated include creating vacation and our experiences new destination, CocoCay. exciting product are expansion ships and at game-changing We highly Perfect

living expect Our to in Seas level Icon things well. whole her the while ships strong we always of And a introduce new up exceptionally way. new ships. trends definitely is performing are we and to when taken name has every see new to

Demand Seas, the take and getaway. for of which are will Utopia set Icon strong. stage pricing ultimate thrilled the also weekend the incredibly delivery Oasis-class has X This of ships, for been we to

debut Lastly, we of in delivery cruising. evolution transitioning will this Silver redefining the South before in summer Ray Silver to Ray, America. the winter second in Mediterranean class, ultra-luxury take season ship the will

their ships market New experiences from and accelerate our land-based share vacations. further innovative to efforts incredible steal

of benefit million completed strategic which X Icon our Beach Day of at capacity HideAway Seas, ultimate expansion guests Beach HideAway over on this in the welcome asset. at Island expands just newest annually. our upsizing Perfect Perfect We at paradise Day on at the time to to beachfront the adult-only CocoCay, is CocoCay,

this the fleet. across X/X About guests visit Day CocoCay will at margins to Perfect Caribbean us allowing deliver higher Caribbean year, International World of and scores satisfaction high

Our deepen the this the continues journey to with year. relationship customer

We the years past experiences. will make onboard more further capabilities in enhance even pre-book to channels, loyalty fueled our by has to guests costs. commercial our over increase The new capabilities to of acquisition easier build optimize distribution it for onboard revenue couple lower introduced and been outsized customer

We to those in will continue XXXX. enhance capabilities

revenue pre-cruise mobile the already XXXX. purchases compared of now we onboard our as booked XX% are through of have X/X in About app, to about and XXXX coming

their purchase more those cruise reminder, spend about before pre-cruise. a onboard buy As who customers do X.Xx than not experiences who

by modern friction share. than remove will investing expand a easier vacations platform, making us wallet ever guests by dream book to We allowing their for it digital in to travel

excellence efficiencies increase capture yields continue to We also platform. driving our and business will across

and controlling a Our and responsible doing in the teams on costs enhancing way. so profitability are committed focusing delivering best to experiences while guest

targets, the and entering reduction debut wrapped communities decisions methanol into. we Making we on mark. the held our ambitions to like act long-term XXXX on the To sustain accelerate in the possible, daily, first future we energize well commitment expect the are responsibly our tri-fuel to form halfway see ensuring while innovations we our track XXXX. planet, achieving to carbon goals. strategic keep to continue engine make and that intensity our sustainability on Excel financial year that accelerate beyond Our progress to celebrity this profitability capable always We the and

Seas in technologies Icon for Icon advantage new systems of as standards us exceeds Nova waste-to-energy the by ship XX%. on represents recently to board. and launched an of the Every take new efforts. The transition Silver energy game-changing industry our also energy efficiency innovative allow such advancement

the By target Destination XXXX. latest pilot new validate to ships consistently technologies, our our to achieve to we decisions help can are we making us net-zero now by position using

the reach Caribbean platform and lifetime bright. deliver us will creating proven strong financial the also are new a shareholder To to value strategies, of records. wrap up, our our future vacation is customers exceptionally Royal experiences of Group operating we that for With allows long-term

continued positioned well XXXX and for are in We beyond. growth

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

Naftali Holtz

Jason, you, morning, good everyone. Thank and

results. start by quarter Let fourth reviewing me

with expectations, $X.XX, of not strong XXX compared would in of X.X% midpoint been growth that rates per compensation were almost quarter. onboard delivering the quarter have guidance. another and and compared increased lag to All expense to XX% drag basis revenue. Net and yet XX%, added from if Net growth eliminating approximately reporting Since XXXX, key call, share products performance double-digit to XX% XX% ticket delivered last up costs, our our teams about the of October point fourth XXX adjusted prior both at the earnings the with stock higher the and basis were were fourth Our for than to our XXXX. versus yield yields earnings XX% over Load price guidance. significant XXX% points excluding stock-based cruise Silversea. factors the for exceeded fuel, appreciated

costs expectations. Excluding in stock-based line the increase our came with in, in compensation,

enhancing EBITDA levels. 'XX Our the focus margin to in of on adjusted fourth profitability XX% deliver us allowed quarter ahead

cash debt to excess utilized lower and also Trifecta. expense, We with interest down consistent pay our flow

XX adjusted compensation total excluding was 'XX. related Net $X.X on billion operating X.X% Slide year, billion versus flow. of points cruise stock-based billion generated in approximately of of ] to and as see fuel, [ prior compared increase you exceptional $X.X to NCCx revenue, increased almost higher X. can guidance. costs an our XXXX cash $XX basis We EBITDA

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

drove formula were per in also for initial January. that expectations twice $X.XX than adjusted proven more Our in success share our earnings

Now year. I XXXX capacity by the and switching through taking deployment start will to you for our outlook.

expected X% For and compared the to be X% growth This is first resulting almost X.X% the dock fourth the expected full and grow to by in in 'XX, days [ to quarter. compared XXXX. have third third year, year, XX% up in X% our APCDs many we dry twice as capacity APCD quarter, the ] more the growth second quarter in and first capacity in around are a quarter. pronounced and to reducing

strong record with booked Jason a consistently year the has wave. start off in been to a strong as mentioned, is And a very position. XXXX

are rates are both Seas the increase volume last Caribbean, mostly the combined key products, Icon of with currently significantly Australia, the of Alaska of year, year. a due XX% deployment of time Seas over The same our of result, additions of growth Europe, summer year-over-year. this a last following to program. the in Utopia All represents XX% including Caribbean celebrities The and year. ahead the and just booked is capacity As ahead and upsized

of at capacity Perfect the increase Day HideAway addition in this CocoCay. is Supporting at Beach

in and are programs ahead be premiums as rate in booked only both Caribbean pricing iconic Caribbean price volume. Our described short is last Icon for Utopia year and and nicely of can Well, demanding bookings market. significant

We trends on hardware. are the we existing also with are very pleased seeing

Europe around since call, were At of redeployed process itineraries time Israel. XX% and a earnings to were that sailings expected we accounts following Mediterranean the coals altering Israel, for ships with X% capacity last European all in for have we our year-over-year. to reduction of our of the visit previously

year repositioning of are this scheduled contingency and of have monitoring a one Regarding the plans the a others the Silversea the spring. our Sea, and and constantly have priority, handful cruises crew only of situation for of ships safety in our in the the We rerouted guests in and Red situation. couple region is we already top a have

Europe more now for few for Regarding impacted weeks higher broadly, last than and a time significantly were quickly bookings demand same rebounded the for softer are relatively October, product year. but itineraries last

European our year. nicely are ahead result, booked sailings last a of As

pleased of all-important on seeing trends for both are full season. particularly North and standpoint. American other X% accounts are capacity We performing we rate very year been itineraries. volume Alaska with the Alaska also XX% a the well in and has from

capacity for have changes made this only While to Alaska our year, is deployment. our we exciting slightly up Alaska

Ascent. will And Silver Neareship, an ship, celebrity will time, sale Nova also Silversea's on Alaska. first edge-class incredible the Celebrity vacations Alaska For offer

Asia for XX% account capacity. Pacific our will of

pricing quarter. China as with second seeing China for demand are return we of the strong Asia trends We in both and to Spectrum the Seas

our you will this to goals, XXXX. our X, turn on the into Trifecta our yield see X.XX% and path yields accelerated full Net This expected year only if year second be towards Taking saw you to our progressed. track. guidance XXXX the as of are all be growth ahead Slide exceptional account, will X.XX%, that remain that's double-digit results an and up to following that for

at in comparable While higher Perfect being the higher new year our the commercial set hardware, of incredible is capabilities. Day XXXX CocoCay load expansion pricing, yield a by bar, and high advancements full our growth factors, fueled further

to moving Now costs.

excluding will Our XXX costs. basis Beach. The from docks focus of HideAway up first dry fuel, weigh late margins grow majority and to of enhance the dock expected remaining Full will on early continue to are be to half in in cruise as dry fourth are operations to quarter the business. our to X.XX% dry we first second mostly The quarter. impact remains be increased docks quarter, our net and X.XX% approximately year which costs, days the points

Based expect apply earnings. the hedged of fuel of market $X.XX significantly earnings expect will adjusted rates also we on billion for which expense, interest year, weigh currency below of year, we and to XX% current This rates. at We expense European the a not itineraries share XX% introduction per are to record we we'll see of anticipate $X.XX. do emissions, on and $X.XX and a prices, our scheme, and and exchange related this fuel EU

turning X. factors the is up time guidance first quarter, of load including at across Asia our the Book significantly XX% and itineraries, the Slide be are Cruises. Expedition Pacific, last will South summarized number in year. and quarter about other capacity spread and a in In as on record America of first levels capacity and both same are rates remaining Caribbean, XX% versus

guidance, XXXX. be the the the approximately our trends, quarter out. recovery growth you of annualization load by are the growth strong Australian driving of up first both yield and full for Net pricing for can As driven quarter which to XX% from yields the factor expect expected we quarter, began significant of see end first Caribbean the and with at itineraries first the

impact XXX from cruise to basis range Beach. fuel, to up and HideAway of include points to docks expected opening in excluding Net are and costs, costs be dry X.X%, the increased related X.X%

load of $X.XX XXX to for to quarter expect also XXXX. we compared as to as approximately We earnings quarter be all this factors in higher adjusted as have $X.XX. to Taking the into Icon account, of well per share points related start-up basis QX first the the

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

progress of During just revolving during remaining refinanced allowed the senior to the repaid total EBITDA disciplined made that settled shares. the facilities under goal We debt reduction and and leverage year-end fourth of accelerate when adjusted loan our $XXX to around $XXX term metrics. our of XXX,XXX November excluding mid-year. performance balance quarter, impact cash delivered issuing credit we investment-grade X.XXX% allocation our at XXXX, strengthening notes utilizing XX.X% notes. significant convertible We our and sheet to in ships million were million by in and Trifecta capital Better the us of Xx towards new secured

debt We down will and pursue further XXXX reduce close of the to pay and to continue stick end mid-Xx to [ proactively refinancings by to ]. leverage expect

debt remaining Our fully unchanged, and remain sheet. priorities and a on address balance towards maturities, unsecured interest managing allocation debt expense to reducing capital restriction

In a an strong year well remain combination final our change base achieving a earnings step committed it. is camp. our and and while to growth goals. closing, our of our position environment beyond back yield while pointing as ambitions focused accelerating created on in our is milestone not go of certainly and destination our The mission important and an on we And growth. executing demand to book another delivering pathway Trifecta Trifecta strategy

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

Operator

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

Steven Wieczynski

Icon. and strong a the on of launch Congratulations XXXX

for how trying this have guys figure guidance And guidance think yield guide the year, as half out a like pricing, if assume comps of that's your just might occupancy maybe this then the with yield then onboard could little break as year, wondering you're this in lack back for CocoCay make yields year for I us. Essentially, what you you've load the new bit about visibility about help included things you of well. there's the yields, of to in just cadence And year? but that for more got think ramp, thinking us tougher about of some terms just potential slowing finally your obviously, in and there, we core about maybe believe as factors. thinking a this down hardware So specifically would

Jason Liberty

Steven, thanks, everybody. good and Well, morning,

of pointed I think you to a lot there. things

acceleration. XXXX period on incredibly year board that having So we first, yield, the strong obviously, ramp-up that as is a the first see is kind driven the There strong full was starting year with the pricing or of an in in QX, load we on in factor. booking of of last spend point onboard standpoint. the a saw both of towards quarter recovery the by ticket that nothing Naf middle and the then commented, the environment

which that's business any And at be so And are slowdown spend, we those we we -- our pointing concern very our growth basis is QX the forward. all see cost environment. the when in a what any this when terms booking shouldn't of whether and seeing I see occurring there's like-for-like, of in think but positive look terms it's control in we're -- north formula that things, on things for in how new at much whether QX moderate -- point whether there And forward. is yield onboard good it's success, it's hardware,

Steven Wieczynski

you're very share what strong Okay. based those Trifecta sense. goals, Jason, now And goal on seeing Got high not our now. off getting of of in earnings probably you're that words goals on about you're year think then $XX is a you. Trifecta based right what a this makes possibility probability with as a north we X third essentially That

if partners base do is, guys So call you you that here? Trifectting Jason, camp, goal But investment something you base about to and the I think line start know as you some And what I at return thinking camp? about moves camp. you help to grade time do guess think Trifecta talked R&D are the point, introducing and go maybe beyond that well question about mean well? us then about you from I agency where your base

Jason Liberty

Naf Sure. take let investment-grade question. Well, the I'll

getting all targets. the are And on here think well in we returns so impact shareholders. minds consider delivering while of these And are lightening the day. of strong really planet an does We an and X-, really organization what also our organization. incredible also for focusing hearts experience obviously can we kind of X-year with our our when I that see and guest It on every that we each do consideration things the Trifecta, heavily

will all consider a an margin important those basis things, math -- that as as ROIC well how we base. in the not capital sure X achieving we're are investment-grade where that financial we investment important while we to. strong to have As if we we be But we're continuing think next our really so await about achieve, control disciplined growth, will performance in the get business metrics. invest Trifecta, a to will to And out as as returning Naf earnings performance forth. understands navigating I is but is yield program focused make math financial also program that to good to sure management cost on you as be we're That a looking getting basis, what's everybody in it here in we're there and what to to just set But to moderate closer we just very grade. think, talk put on consideration in capital is will moderately and the about on on on also run we you for I'll destinations we to going while we been think make shareholders grow tell

Naftali Holtz

XXXX, announced in lowered significant our flow getting debt could of last repaid progress billion that on of direction. capital. back Thanks, We We part Jason. And cost we're of Steve,so really to Trifecta and focused made as $X and you the cash on debt as capital have remarks, roughly my we've the disciplined excess metrics, with for that the said -- around formula to the in investment-grade leverage balance I to we sheet, levels -- in this down in we allocation that. than see year. be we'll And close being saw results us is our in we we'll just of targets. continue accelerate we do that the because that faster pay to performance And very our thought. allowed

come that, addition rating to pay notes had the or refinance we down. issue, In contact to credit some upgrades that will were those and want the balance we're as also sheet, secured the upgrades the to With with year. either that them close or of we to the agencies. the with unsecure rating regards agencies, that rating opportunity pleased very we had to last have very that We guaranteed,

on as but contact focused the in balance to operating then there. the close where And be focused under, really make continue are We the we on are. the that that, are the have with sheet, and making metrics on on we're agencies we comfortable we sure we'll ratings really not goals progress that's necessarily

Operator

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

Robin Farley

kind may to to I what wanted that it the have you think itineraries start do guidance guidance to -- there's Sea. includes do with I the that's that? guidance of of one. then have for into potential EPS a some would for that quantify that with in already really anything to if transiting terms there? 'XX, say ask, stay Is us you And of downside be changes can I you rerouting follow-up, your your what baked but EPS Red you if your in alluded wonder I'll help fair

Jason Liberty

our question, talk for I thanks for not Well, as how does think we we perfection. about guide, just the plan And Yes. Robin. guidance

so things we we kind things the those very much and within account. consider course And up the kind time things there of are to -- into of of Red from your Sea when take like come that time

that's is think sail we're And in of the sail so how something our generally we not sailings impact think our this point -- handful for think through to at expecting the And I that time. set Suez through going plan don't guidance to we perfection. guidance I the up just will that's

Robin Farley

don't given do then you any know and to itineraries might to tax initial on have kind mitigate Okay. incorporation that? if that you you your Perfect. that how And tax the and minimum may tax of changes potential be I global impact and saving in your able thoughts

Naftali Holtz

Robin, we it's we there believe quite tax obviously it of XXXX, And to continue do out and impact. global that -- a is us the so minimum do some really for If so course, important. if that mitigate there of yes, and time. we we majority evaluate until with mitigations doesn't impact can been we so nothing, that some --

So that's kind of on that.

Operator

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

Brandt Montour

morning. this Congrats results the on

But taking account of So great saw the the that in back. the right, the is into is for November, Icon which and to first the year seasonality thinking of back half with it the yields you the for hear or on that, one given of that's slowdown Beach guide. European came Is fair balance in that about your Europe of bookings for year strongest that that into the you will and in correlate sort sort baked are given Caribbean, HideAway the balance of the yield full this growth sailing assume sort cadence quarters there. year of have to

about will to think can that else progress. cadence how Just us anything help you

Jason Liberty

should reading really for of I Well, happy anybody higher QX key any soon all don't the after kind that around our about of of with going acceleration of our demand any last obviously, all Europe normalization rate. forward is slowdown. key think in saw one, We're seeing of be the terms we're the came first an into concern quarter this back markets our acceleration and in for call. deployments. from we volumes factor we and talked pricing And load because very

leave just it would I So that.

strong We yields our forward, to onboard, expect to and grow new like-for-like be hardware continue cetera. across QX et

we And course, I appreciate. some Of important think high Brandt, are lapping, line you an comps on commented, to that's very as year-over-year.

Brandt Montour

that Record book, for the want position. your second first I or And at revenue unless in be the at where year your different you're you you the how is in if Okay. Are to refresh become us the booked would sort remarks. you're Great. of management of just is this table release to or to give your question you year-over-year? a And the right? that willing curious on half also wouldn't book is sense don't on full to my And much booked of that, the commentary, if sort any helpful. that curve, the strategy? That's obviously much upbeat how to then and want answer you prepared that more on time optimal thinking money about philosophy point want you extent leave how

Jason Liberty

Well, always off out the answer versus the last percent XXXX. higher, the in meaningfully optimal I on we give get obviously, wrong. our that is think an I highs it -- I'll It's we're is for there booked but mean, sure in, also estimates. do curve, are always it latter. with and start not We than year

I taking through now us and which more on continue systems, and systems share very what what's we also them installed yield have just, the what causing outperformance. also why is line management the XXXX those feeding the have WAVE, in And seen those look of I and top last pre-cruise we estimates -- activities yield well here in wallet. to the allow continued -- is XXXX practices year results exceptionally and in perform seeing activities, seeing to our management they get XXXX into we're also as obviously onboard in more at think, and we're something our think We we've saw this them XXXX

Naftali Holtz

Yes.

the the also the on also on level on other are booked just pricing. comment, the Obviously, on but more versus volume one well. year last as but not volume, pricing we Just

we're So where encouraged are. very we

Operator

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

Matthew Boss

on Congrats quarter. another great

maybe market So year addressable breakdown and run And of multiyear X-part new for when cruise Naftali, you cost just things question. to level, X% you're going what think stand you see multigenerational about on customer where it right the opportunity? total best size see and for today this you talked costs that forward? a larger share just taking attracting? as the about base up the the then versus guide rate And could maybe you to the Jason, whole you

Jason Liberty

-- Yes. it's Well, our by is. I understand Matt, important off, to think I'll orientation start what

are to that keep also do trying desire, not they to willing our pay experiences. advance is but orientation they're customers experiences only Our We for.

And we're so adding experienced ships. an on mine things are to when you have that lot our obviously, focus, a there of

that pay does I the also the to Icon of luxury in travel. are and example, experiences terms delivery guests innovating is example for. to dreaming space ultra seek dreaming multigenerational Nova an for and the and But willing of the think our those, for of those see Silver ranges in and what for incredible you that deliver

are space, also extend see island You World we the And whether there. in to HideAway and about continue it's the we that had that other private destination think that into into those. opportunities we doing the what announced, we're and Beach just dream Club, about

segments us stay within in continuing ecosystem. deliver and that all That and guests customers mentioned the the each as as our grow to comes as loyalty our of our that through into well that experiences every Our are in platform to to of sure make a those experiences technology in goal believe a I ecosystem. notes, keep for And best we're is brands on basis my travel kind day. and we invest each building, what

Michael Bayley

Matthew, it's Michael.

land-based and ships Just Club really product to perfect addressable comments market, for you short Roll day. it's those in There's We consider options. the Jason. and 'XX. Day, for differentiation straight Perfect cruise with of market a land-based quite coming the coming of Utopia vacations the the Icon different like in add before some to traditional big market a HideAway when between Beach Beach, addressable believe into all that

those the land-based We cruise are lot now better with space options but where really quality kind particularly smaller a And of and that from that from and we the is attract product, moving points. price exciting of traditional beginning big, addressable based. great really the Royal land demand more market transcending products brand than feel to

pricing a the kind multi-generational relates the addressable to of becoming there's the and big new we think with example market, phenomenally that. a we're seen that a now. seen that particularly Icon acutely been as products family really with new And cost reaction and I we've product we've of such We've with great I really power done opportunity and reaching is on introduced. the introducing of So particularly think what never that feel with brand kind demand it It's we've incredible successful.

Naftali Holtz

mentioned And Matt, important, think just remarks obviously, guidance that year, he it's this dry X.XX% I it of and there's gave cost XXX in of throughout that I both the impact from points days so on the also the my your have not cost, to so just ABCD. accretive to operations question Beach on growth. we HideAway increased very while does is basis year margin, X.XX% dock

the if margins put So have our really and reason. and of we controlling relentless continue business. that's on context we cost that you years all play the into things the that of I is over the think as last -- But really done enhancing focus coming so grow into couple to

addition Icon the cadence have most of last margins latter business more in pleased and the docks the dry a half the our quarter for year. throughout have operating as with have normalizes will Also, quarter, quarter, the the first year, how from enhancing early in, year just we part the of in it half the first which from grow way will dry specifically and For benefit dock in But first part will of in create impact we the cost And durable we obviously, quarter mentioned catching to of second in I load that the lower second more we cost. and because the of Utopia, really the that leverage. factor, all starting -- help we've very of the the on year. up of really add Seas weigh and those but will APCDs the days in half to us continue that we're the also

more strong really enhanced financial growth, got For faster cost and formula the moderate yield remains growth, we earnings. to Moderate will formula grow capacity that unchanged. our more flow cash basically our is we the term, yields, cost and margins, than control enhance grow And really returns. to leads

Operator

line with Research. Melius Cunningham Your the Conor from next of question comes

Conor Cunningham

Can be keeping moderate with of bit that actually the can the the Just There little on should set a the In close FEMA XX% an we land-based back And to pre-COVID where higher gap on based. argument land. like be kind land discount to think been how that's context to make the seems given levels, sit of I you you to that cruisers then you right now? yield. you're historically. going get level just on versus

So you just talk if about could be would that, that great.

Jason Liberty

around XX% having we to talked land-based gap XX% year, vacation. last a obviously, to So

Our yields rose in XX.X%. XXXX

think, APDs XX%. up, I Our were

that. So year, that. expect to we've into further And we dent make dent this obviously made a a obviously

really travel. consumer's cruise about the We How happening in for about obsessed are what's vacation. with has much do about the it's the close compete not -- space. And average consideration that moved we cruise we how how can It's gap. see land-based do less much more we consideration in into

very incentivize the What best ecosystem. really doing the And our our sure really brands, our to how is focused best how that, is this back this I obviously think do exceptionally do create how our gap. their on customers are of house of So that land-base do really we we're land-base well, in the we vacations And is loyalty demand. we're that does what make which to focus make going another in ecosystem, through to close world. we think sure of rate the doing getting think on well. of evolves does keep customers repeat in leveraging that now focus commentary and into wave has from And one starting we lifetime about a We're return, our really shows that we're a well. delivering I that on doubled, doing a lifetime segments vacation of what vacation. the And each

to And -- an destination doing look an perfect probably you extremely Day when further that you about to further and in to and even happening you better how on on that, that as product and We that's innovate argue into at think on we're continuing dream see land. Icon, would can going product. example, the what competitive a value us by side vacation. And with it's away gap that's chip what's when to land-based deliver

Conor Cunningham

Super to mentioned direct going of talk few you And that's then increase the And increased Can how and kind investments continue booking you evolved over bookings. just years? past digital the about how the helpful. direct channel we forward?

Jason Liberty

the shift our partners. direct through or about Well, from Yes. travel less it's

want -- we possibly do of it's channel and want to And experience We out to cruise. as to whether are is want to book really we that want as on show how agnostic. take up guests can. shop our friction we What we of much

web through Sometimes that channels leads digital them like or our our the app.

And it do. helping that of partners takes very have want call Sometimes to our travel to they guests exceptional has them call experiences centers. much that and job, the an who course, do our them identify

about it. very the customer experience. also little shopping we friction their But So in very expects that recognize we're agnostic

out consume technology want in not only and of and spent the in like of we way experiences to forth with, use they curate business them. lot but to to those so and how also figuring the a time front So to to AI how be which easier put do guests

fifth that evolve I stronger a just as stronger better at better we're we're continues and it's and feel When to back technology it think I that's inning growing we're every I I journey. would consumer getting day. first -- find to to every inning, day. now the in heading or so the the fully available But do fourth is and the

Naftali Holtz

want. thing make the that also vacations one just to customer sure And add allows other it is us to gets they the Yes.

last people also as we in and remarks, to progress the and couple vacations, also booking it in of than design more of pre-cruise. of we've X.Xx the and they success Jason on your are and the some as through get just also spend meaningful the earnings vacation mentioned And calls, noted seen to ability So time great buy pre-cruise. their in have that leads they those financial ahead board

Operator

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

Vince Ciepiel

little bit Icon. I more wanted the into to dig a

does approach the what to in it do new next compares marketing? reception to community, on to XX class? about you with Curious about XX that in taking this and You XX into You coverage a kind you And Oasis a years the ago. compare months? XX saw travel level. years you've your keep the launch getting, as how talking that, move Quantum think ago, of Star new How Utopia how of the think been customer, national sustainable terms to agent that's things you

Michael Bayley

that of I've from XX been for on in question. the and for design about mean focus and family the Icon Vince, thank all, first very about I talk is Oasis-class. evolution you of to waiting the Icon. product much minutes multigenerational a terms

with working really created it we've I with working and is really what hit. is a mean game-changing our it's customer think demographic really market. I target

HideAway really kind if an Day think Beach. you're we've that you've in then we got Perfect It's Epic. feel there. are with, almost I product that And you Icon. with you -- achieve of like exceptional of people the impressed opening combine with really that And

the in in It's multigenerational family product and is a made family vacation world. have and best experience the the a We world, truly a vacation for statement. the best that that we've

that in shakedown from never Icon interest the response, when The The seen has appreciation partners, had with to and kind that Seas. we've comparison The first phenomenal. is right high. strong. It's if have seen every The We been out seen the first-in-class mark you has We've on been been this absolutely the the Icon. opened seen icon we of to employee feel from really We've been of been the crew consumer, unbelievable. foundation. destinations. with launches, from the as But at. I been look knocked bookings the unbelievable. phenomenally unbelievable has The product to and got response rate has previous our park. response that the you've So response up that we've genuinely just this has from single say metric have want would the we product would trade response cruises of that never

When compare these has we tripled class, the of or look we all and where at metrics response. have the doubled Icon metrics we

versus Icon it's better product gaming with true that We've a same been do itself. or and it's been previous terms overall with onboard percent With But x high. Icon, got performance. when first-in-class Rate with was have been to to double volume Perfect everything in with of the the shoulder Oasis. the the and be It's phenomenal that want has So we've that triple. Day kids the Las compare really great We shoulder than Xx both. our rate got except Orlando vacation. Vegas, in we've stands you first-in-class do feel Icon launches, Oasis with to And with seems got the would was.

look opening of exactly terms So of X-day the to kind I of particularly volume and Beach X- Perfect Royal, in response market lineup traditional we and feel the like first-in-class you rate we the Utopia for with when of we've and right. got think Poken the that at And the have X-day it products. same see of we X- with the utopia Day, introduction Avril 'XX, performance out in perfectly Club Royal in versus

on we're introducing Icon, a Perfect we're family started in course, multigenerational with like We it's option traditional land-based And feel new Vegas transition earlier with and a much vacation you with that feel going question. you to being that like we being of world-class stands to Orlando shoulder a we've thank It's like we -- experience with that there, to that appreciated. mention. cruise could from for my right comments, any exciting destination back shoulder We Utopia, feel very And this of asking Day. Las and year-over-year. products these journey terms

Vince Ciepiel

Absolutely.

like you when this, of a new sounds kind before. hardware haven't cylinder at that seen firing in is layer So it you

that discount multiyear reason You than more any the what at land you a supply. to Is yield have levels be industry stretch multiyear muted of then elevated seen pretty you've a historically? couldn't and of think stress there based, have kind to on growth

Michael Bayley

Well, brand guy. I'm the

got extremely optimistic excited Caribbean world, of International got see become product now that to are live performance Royal a the you, has slightly Naftali, tell plenty upside. to of yes, we're with we a and feel the of date. have very brand So they Icon very perspective, unbelievably the tell lineup we've that we with and I've can different I in excited I and you, yes, the proud coming, we but Jason,

a So see of lot yes, upside. I

Jason Liberty

I extremely Yes. just we're -- on spend high that is level very quality onboard strong to continue beyond. think very I not anybody in bookings, want to that wouldn't activity QX the optimistic optimistic thinking we mean, of is the see. QX and And overall we terms the call strong. I about leave with I demand the the exceptionally are performance. of very all But know And

of some the And can I that be that. the on should there's that -- focus only front so know But just us. I it there's talk on opportunity in about focused questions,

Operator

comes line Rollo Our Jamie with question final Stanley. of Morgan the from

Jamie Rollo

one really of you follow-up Just on I Icon, sort guess. like, wish I Michael,

Just going foot about really of given this you and sort you older on down I to as is way the are an that fleet? new were figures perhaps class the mean, also Or new changed you then, ordering see your accelerate this the press gave to how of you opportunity sort carry before? of think to ship? and has ships in the new some ships ships

Michael Bayley

in land-based class. Perfect Royal like the Club curated see of the the combination Day, We Yes. we've opportunity direction huge in that terms phenomenal destination and taken with Icon of this experiences Nassau Beach

with development we focused much customer. kind experience the of very of absolutely know is mindset our direction, on that and our think So further future product that resonates

Jason Liberty

to the obviously invest in operating we are We're where expect I the to the outpaces our level at in which But our Jamie, demand segments just And operate business. in the purposeful There's in very we yards of we in. we supply. ability current purposeful anyone think in terms We segments for pace. actions. to significantly in quality very in the continue the future inside to add, Yes. are grow a of think fast constraints

growth growth, also over destinations formula moderate We capacity said, time. of continue But expect our stick and cost fleet. in good in to to control and Michael going to invest, of that the as growth yield moderate to it's generally

Jamie Rollo

given ships seen, Icon Is much there? you sort on of of which than maybe ships? you even for or be existing not the or expectations putting some vision anything class some sounds the changing you've with anything class surprised might doing of what quantum features maybe of Radiant better there or are just some the of I'm the successful nothing

Jason Liberty

always we're Yes, modernizing.

We we took have coming up the actions on and Oasis.

talking Icon to learnings our move maybe the the a sure we're the as investing it's also But a experience stays always the law learnings. not sustainability those ships standpoint, Icon updating on of We're so relevant but always lot on of et that modernization competitive. as about and fleet not to of in ships and Or being a make It is going CapEx on exciting like relevant. of Some be potentially and standpoint number we're Seas. just today our HideAway, stay an the or doesn't cetera.

Operator

call Holtz, remarks. closing I'll for back now Naftali turn any the to CFO,

Naftali Holtz

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

Operator

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

may You disconnect. now

Royal Caribbean Cruises (RCL) 1 Feb 242023 Q4 Earnings call transcript