Q2 2024 Royal Caribbean Group Earnings Call
Speaker Change: It's when all your senses become aware, you are present, in focus.
Operator: It's when all your senses become aware; you are present; it's focus.
Unknown Speaker: You are present and focused. Get ready for the best family vacation in the world, I Come of the Seas. It's the first of a whole new class of ships, where everyone in your crew will have a great time. Good morning.
Operator: Get ready for the best family vacation in the world. I come of this ease. It's the first of a whole new classic ship where everyone in your crew will have.
Speaker Change: Get ready for the best family vacation in the world, I Come of the Seas. It's the first of a whole new class of ships, where everyone in your crew will have a great time.
Regina: 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 second quarter 2024 earnings call. All participants are in a listen-only mode.
Regina: Good morning, my name is Regina, and I will be your conference operator today.
Michael Mccarthy: At the time, I would like to welcome everyone to the Royal Caribbean Group, second quarter 2024 earnings call. All participants are in a listen-only mode.
Regina: 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 second quarter 2024 earnings call. All participants are in a listen-only mode.
Regina: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one on your telephone keypad. I would now like to introduce Michael McCarthy, Vice President of Investor Relations. Mr. McCarthy, the floor is yours. Good morning, everyone, and thank you for joining us today for our second... 2024. Joining me here in Miami are Jason, our Chief Financial Officer, and Michael Bayley, President and CEO of World. Before we get started, I'd like to note that we will be making forward-looking, Statements are based on management's current expectations, but a number of factors could cause actual results to differ.
Michael Mccarthy: After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press Star 1 on your telephone keypad.
After the speaker presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1 on your telephone keypad. I would now like to introduce Michael McCarthy, Vice President of Investor Relations. Mr. McCarthy, the floor is yours.
Michael Mccarthy: I would now like to introduce Michael McCarthy, Vice President of Investor Relations. Mr. McCarthy, the floor's yours. Good morning, everyone, and thank you for joining us today for our second quarter 2024 earnings call. Joining me here in Miami are Jason Liberty, our Chief Executive Officer, Theftali Holtz, our Chief Financial Officer, and Michael Bailey, President and CEO of World Caribbean International. Before we get started, I'd like to note that we will be making forward-looking statements during this call. These statements are based on management's current expectations and are subject to risks and uncertainties. A number of factors could cause actual results to differ materially from our current expectations.
Michael McCarthy: Good morning, everyone. And thank you for joining us today for our second quarter 2024 earnings call. Joining me here in Miami are Jason Liberty, our Chief Executive Officer, Naftali Holtz, our Chief Financial Officer, and Michael Bayley, President and CEO of Royal Caribbean International.
Regina: Please refer to our early, As well as our filings with the SBA, we do not undertake to update any forward-looking statements. Also, we will be discussing certain non-GAAP financial measures, which are... As defined, Association of all non-GAAP items can be found on our investor website.
Michael Mccarthy: Please refer to our earnings release issued this morning as well as our filings with the SEC for description of these factors. We do not undertake to update any forward-looking statements as circumstances change. Also, we will be discussing certain non-GAAP financial measures, which are adjusted as defined in a reconciliation of all non-GAAP items that can be found on our investor website and our earnings release. Unless we state otherwise, all metrics are on a constant currency adjusted basis. Jason will begin the call by providing a strategic overview and update on the business. Now, Iftali will follow with a recap of our second quarter, the current booking environment, and our updated outlook for 2024.
Michael McCarthy: Unless we state otherwise, all metrics are on a. Jason will begin the call by providing a strategic overview, and Naftali will follow with a recap of our second, Current Booking Environment, and our Updated Outlook. We will then open the call for your questions. With that, I'm pleased to turn the call over to you. Thank you, Michael, and good morning.
Speaker Change: Unless we state otherwise, all metrics are on a constant currency adjusted basis.
Michael Mccarthy: We will then open the call for your questions.
Jason Liberty: With that, I'm pleased to turn the call over to Jason. Thank you, Michael, and good morning, everyone. I am proud to share our outstanding second quarter results in the continued upward trajectory of our business. As you saw on the press release this morning, our momentum continues. The man for the incredible experiences our leading brands deliver continue to be robust. As a result, we achieved trifecta 18 months early. We are reinstating a dividend, and we are raising our four-year guidance. Less than two years ago, we announced Trifecta, a three-year financial performance program that created the pathway back to what we internally call Basecamp.
Speaker Change: We will then open the call for your questions.
Speaker Change: With that, I'm pleased to turn the call over to Jason.
Unknown Speaker: I am proud to share our outstanding second quarter, Upward Trajectory. [inaudible] Man for the Incredible Experiences, our leading brands. As a result, we achieved a trifecta, reinstating.
Jason T. Liberty: Thank you Michael and good morning everyone. I am proud to share our outstanding second quarter results and the continued upward trajectory of our business.
Jason: As you saw in the press release this morning, our momentum continues. Demand for the incredible experiences our leading brands deliver continue to be robust.
Unknown Speaker: Less than two years ago, we announced Triforce. University created a pathway back to what we internally call said we would deliver triple-digit adjusted EBITDA. Double-digit Adjusted Earnings Per Share, [inaudible] Today I am delighted to share that we have all three trifectas. Trailing 12-Month Basis, 18-Month Ahead Edition, our leverage is now below three and a half. The Impact of New Shifts, Trifecta accomplished and is a balance sheet in the, I'm excited to broaden our capital allocation, stating a quarterly Capital returns that include a competitive dividend have always been a Pillar of our strategy to supplement our thank the entire Royal Caribbean group team for their passion, efforts helped accelerate our path to reaching Tri- Liver, The Best Vacation, Driving Accepted. Trifecta is an important milestone, but we are just getting started as our ambitions go well beyond.
Jason: Less than two years ago, we announced Trifecta, a three-year financial performance program that created the pathway back to what we internally call Basecamp.
Jason Liberty: We said we would deliver triple-digit adjusted EBITDA for APCD, double-digit adjusted earnings per share, and return on invested capital in the teams. Today, I'm delighted to share that we have achieved all three trifecta goals on a trailing 12-month basis, 18 months ahead of schedule. In addition, our leverage is now below three and a half times when excluding the impact of new ships that were delivered mid-year. With trifecta accomplished and our balance sheet in the... Strong position. We are excited to broaden our capital allocation by reinstating a quarterly dividend of 40 cents per share. Capital returns that included competitive dividend have always been and will continue to be a key pillar of our strategy to supplement our growth as we focus on delivering long-term shareholder value.
Jason: We said we would deliver triple-digit adjusted EBITDA per APCD, double-digit adjusted earnings per share, and return on invested capital in the team.
Jason T. Liberty: Today I'm delighted to share that we have achieved all three trifecta goals on a trailing 12-month basis.
Jason T. Liberty: In addition, our leverage is now below three and a half times when excluding the impact of new ships that were delivered mid-year.
Jason T. Liberty: Capital returns that include a competitive dividend have always been and will continue to be a key pillar of our strategy to supplement our growth as we focus on delivering long-term shareholder value.
Jason Liberty: I want to thank the entire Royal Caribbean Group team for their passion, dedication, and commitment. Their efforts helped accelerate our path to reaching Tri-Factor and will continue to ensure us to deliver the best vacation experiences responsibly, while driving exceptional financial results. Tri-Factor is an important milestone where we are just getting started, as our ambitions go well beyond it. We are excited by the large opportunity in front of us as we seek to take a greater share from the rapidly growing $1.9 trillion vacation market. Our plan to capitalize on this opportunity is well-grounded and a set of underlying strategies, the powerful foundation of our leading global brand, and a proven formula for success.
Jason T. Liberty: I want to thank the entire Royal Caribbean group team for their passion, dedication and commitment.
Jason T. Liberty: Trifecta is an important milestone but we are just getting started as our ambitions go well beyond it. We are excited by the large opportunity in front of us as we seek to take a greater share from the rapidly growing 1.9 trillion dollar vacation market.
Unknown Speaker: We are excited by the large opportunity in front of us to take a greater share of the rapidly growing $1.9 trillion. [Inaudible] Well-grounded in a set of underlying strategies. Powerful foundation of our leading global brand. University.
Jason T. Liberty: Our plan to capitalize on this opportunity is well-grounded in a set of underlying strategies
Jason T. Liberty: The powerful foundation of our leading global brand and a proven formula for success. Moderate capacity growth, moderate yield growth, and strong cost discipline.
Unknown Speaker: Moderate Capacity Growth, Moderate Yield Growth, and Strong Cost. The Best People in the World. Now I'm moving on to our, The second quarter exceeded our already elevated expectations. We have seen an incredibly robust booking and pricing environment across all our key items, which is not only setting us up for success in the future but also contributed to the outperformance in the Continued strength and on-board, heavily influenced by our pre-cruise commercial, drove revenue and earnings.
Jason Liberty: Moderate capacity growth, moderate yield growth, and strong cost discipline, and the best people in the world to execute on it all.
Jason Liberty: Now I'm moving on to our results. The second quarter exceeded our already elevated expectations. We have seen an incredibly robust booking and pricing environment across all our key itineraries, which is not only setting us up for success in the future periods, but also contributed to the outperformance in the second quarter. This coupled with continued strength and onboard spend, which is heavily influenced by our pre-cruised commercial engine, drove the revenue and earning outperformance for the quarter. In the second quarter, we delivered approximately 2 million vacations at exceptional guest satisfaction scores. Yields grew 13.3% compared to the second quarter of last year, which was almost 300 basis points above our guidance.
Jason T. Liberty: and the best people in the world to execute on it all.
Jason T. Liberty: The second quarter exceeded our already elevated expectations.
Jason T. Liberty: We have seen an incredibly robust booking and pricing environment across all our key itineraries, which is not only setting us up for success in the future periods, but also contributed to the outperformance in the second quarter.
Jason T. Liberty: This, coupled with continued strength and onboard spend, which is heavily influenced by our pre-cruise commercial engine, drove the revenue and earning outperformance for the quarter.
Unknown Speaker: The second quarter, we delivered approximately 2 million vacations with exceptional guest satisfaction, yields grew 13.3% compared to the second quarter of last year, and was almost 300 basis points above our forecast. The revenue outperformance, combined with approximately $0.15 in favorable timing, resulted in an adjusted EPS that was considerably higher than expected. Naftali will elaborate more on second quarter details and. The strong demand environment is also translating into higher revenue and earnings expectations. We are increasing our full-year yield growth expectations by 115 basis points.
Jason T. Liberty: In the second quarter, we delivered approximately two million vacations at exceptional guest satisfaction scores.
Jason T. Liberty: Yields grew 13.3% compared to the second quarter of last year, which was almost 300 basis points above our guidance.
Jason Liberty: The revenue outperformance combined with approximately 15 cents in favorable timing of cost, resulted in an adjusted EPS that was considerably higher than our guidance. Now, probably we'll elaborate more about second quarter details and results in a few minutes. The strong demand environment is also translating into higher revenue and earnings expectations for the balance of the year. We are increasing full-year yield growth expectations by 115 basis points, compared to our prior guidance. Now we now expect adjusted earnings per share to grow 68% year over year. 2024 bookings have consistently outpaced last year throughout the entire second quarter and into July, despite the fact that we have significantly fewer statements left to sell, leading to higher pricing for all key products.
Jason T. Liberty: The revenue outperformance, combined with approximately 15 cents and favorable timing of costs, resulted in an adjusted EPS that was considerably higher than our guidance.
Jason T. Liberty: Naftali will elaborate more about second quarter details and results in a few minutes.
Naftali: The strong demand environment is also translating into higher revenue and earnings expectations for the balance of the year.
Naftali: We are increasing full-year yield growth expectations by 115 basis points compared to our prior guidance. And we now expect adjusted earnings per share to grow 68% year-over-year.
Unknown Speaker: Unknown Attendee, We now expect Adjusted Earnings Per Share to grow 68% because 2024 bookings have consistently outpaced last year throughout the entire second quarter. Despite the fact that we have significantly fewer staterooms, leading to higher pricing for all, the North American Consumer, who represents approximately 80% of our business, is expected to be robust, driving strong yield growth across all, in addition to Strengthening the Caribbean. European and Alaskan summer itineraries are performing exceptionally well, and they have experienced greater pricing power than expected since our last earnings call, leading to increased... Our nimble sourcing model coupled with our brand's global appeal and leading position in their respective segments allows us to successfully capture quality demand across, Source from New and Younger Consumer With such strong momentum, 2024 is on track to be another exceptional year.
Naftali: 2024 bookings have consistently outpaced last year throughout the entire second quarter and into July , despite the fact that we have significantly fewer staterooms left to sell, leading to higher pricing for all key products.
Jason Liberty: The North American consumer who represents approximately 80% of our sourcing this year continues to be robust, driving strong yield growth across all key products. In addition to strengthening the Caribbean, European, and Alaska summer itineraries are performing exceptionally well, and we have experienced greater pricing power than expected since our last earnings call, leading to increased expectations for yield growth. Our nimble sourcing model coupled with our brand's global appeal and leading position in their respective segment. Alazza successfully captured quality demand across those segments, sourced from new and younger consumer bases and attract the highest yielding guests. With such strong momentum, 20-24 is on track to be another exceptional year with double-digit yield growth and significant earnings growth.
Naftali: The North American consumer, who represents approximately 80% of our sourcing this year, continues to be robust, driving strong yield growth across all key products.
Naftali: In addition to strength in the Caribbean, European and Alaska summer itineraries are performing exceptionally well, and we have experienced greater pricing power than expected since our last earnings call, leading to increased expectations for yield growth.
Naftali: Our nimble sourcing model coupled with our brand's global appeal and leading position in their respective segments allows us to successfully capture quality demand across those segments.
Naftali: With such strong momentum, 2024 is on track to be another exceptional year with double-digit yield growth and significant earnings growth.
Unknown Speaker: Double-Digit Yield; We now expect full-year net yield growth of 10.4% to 10.7%. The Yield Outlook is driven by the performance of new and existing ships, combined with our leading private destination.
Jason Liberty: We now expect full-year net yield growth of 10.4% to 10.9%. Our yield outlook is driven by the performance of new and existing ships, combined with our leading private destinations, a strong pricing environment, continued growth from onboard revenue, and our accelerating commercial apparatus. We increased our revenue expectations for the second half of 2024 and now expected deliver mid-single-digit yield growth in the back half of the year, which continues to be above our typical moderate yield growth expectations. Just as a reminder that this is on top of approximately 17% yield increase versus 2019 in the back half of 2023.
Naftali: Our yield outlook is driven by the performance of new and existing ships, combined with our leading private destinations, a strong pricing environment, continued growth from onboard revenue, and our accelerating commercial apparatus.
Unknown Speaker: Strong Pricing Environment. Increase our revenue expectations for the second half of 2020, and now expect to deliver mid-single-digit yield growth in the back. Continues to be above our typical moderate yield.
Naftali: We increased our revenue expectations for the second half of 2024 and now expect to deliver mid-single-digit yield growth in the back half of the year.
Naftali: which continues to be above our typical moderate yield growth expectations.
Unknown Speaker: Just as a reminder that this is on top of approximately 17% yield increase versus 2019 in the back. We also continue to expect higher margins and higher earnings. $11.35 and $11.45, the margins are over 300 basis points higher.
Naftali: Just as a reminder that this is on top of approximately 17% yield increase versus 2019 in the back half of 2023.
Jason Liberty: We also continue to expect higher margin and higher earnings, with adjusted EPS expected to be between $11.35 and $11.45. And even a margin that is over 300 basis points higher than last year. As we look ahead, we remain focused on executing our proven formula for success: moderate capacity growth, moderate yield growth, and strong cost controls, which lead to enhanced margins, profitability, and superior financial return. We continue to see a very positive sentiment from our customers, bolstered by a resilient economy, low unemployment, stabilizing inflation, and record high household net worth. Consumer preference continues to shift towards spend on experiences, with particularly prioritizing towards travel.
Naftali: We also continue to expect higher margins and higher earnings, with adjusted EPS expected to be between $11.35 and $11.45, and EBITDA margins that is over 300 basis points higher than last year.
Unknown Speaker: As we look ahead, we remain focused on executing our proven formula for success, moderate capacity growth, moderate yield growth, and strong cost control to enhance margins, profitability, and superior financial performance. We continue to see a very positive sentiment from our customers bolstered by a resilient economy, low unemployment, stabilizing inflation, and Record High House Inflation.
Naftali: As we look ahead, we remain focused on executing our proven formula for success, moderate capacity growth, moderate yield growth, and strong cost controls, which lead to enhanced margins, profitability, and superior financial return.
Naftali: We continue to see a very positive sentiment from our customers bolstered by a resilient economy, low unemployment, stabilizing inflation, and record-high household net worth.
Unknown Speaker: Consumer preference continues to shift towards spending on travel. Consumers have 10% more vacation days compared to last year, and they are using half of that. In fact, our research suggests that consumers are spending more on travel than any other category, and they intend to increase their travel. Cruise Remains an Attractive Value Proposition, whose purchase intent is high. Consumer Financials remain healthy across, Number of Baby Boomers Reaching Retirement Age, Growth 30% to $73 million. Based on our research, retirees take 50% more vacation time than non-retirees. The Baby Boomer Generation also holds 50% of the $156 trillion of U.S. wealth. Unknown Attendee, Michael Bayley, Daniel Politzer, Robin Farley, Conor Cunningham, Benjamin Chaiken, including travel.
Naftali: Consumer preference continues to shift towards spend on experiences.
Jason Liberty: Consumers have 10% more vacation days compared to 2019, and they are using half of that increase to travel. In fact, our research suggests that consumers are spending more on travel than any other leisure category, and that they intend to increase their travel spend in the next 12 months. Cruise remains in attractive value proposition, and cruise purchase intent is high and continues to strengthen. Consumer financials remain healthy across demographics. The number of baby boomers reaching retirement age is expected to grow 30% to 73 million by 2030. Based on our research, retirees take 50% more vacation time than non-retirees.
Naftali: with particularly prioritizing towards travel.
Speaker Change: Consumers have 10% more vacation days compared to 2019 and they are using half of that increase to travel. In fact, our research suggests that consumers are spending more on travel than any other leisure category.
Speaker Change: and that they intend to increase their travel spend in the next 12 months.
Speaker Change: Cruise remains an attractive value proposition.
Speaker Change: and Cruz Purchase Intent is high and continues to strengthen.
Speaker Change: Consumer financials remain healthy across demographics. The number of baby boomers reaching retirement age is expected to grow 30% to 73 million by 2030.
Speaker Change: Based on our research, retirees take 50% more vacation time than non-retirees.
Jason Liberty: The baby boomer generation also holds 50% of the $156 trillion of US wealth, and they are expected not only to spend more on travel, but also to transfer $72 trillion of their wealth to other generations over the next two decades, including traveling together. We are already benefiting from that active and real-time wealth transfer through multi-generational travel across our brands. Our research shows that younger generations, millennials and younger, are also benefiting from the 10% increase in leisure time compared to 2019, and that they intend to allocate more of this time on travel than any other leisure category.
Speaker Change: The Baby Boomer generation also holds 50% of the $156 trillion of U.S. wealth, and they are expected not only to spend more on travel, but also to transfer $72 trillion of their wealth to other generations over the next two decades, including traveling together.
Unknown Speaker: We're already benefiting from that active and real-time wealth for multi-generational travel across borders. Our research shows that younger generations. Millennials, and the younger generation, are also benefiting from the 10% increase. Unknown Speaker, 29, and that they intend to allocate more of this time to travel than any other. This Attractive Traveler continues to gain share within our community. Faster Pace, and then the other generations. Today, one in every two customers. Their travel needs and behaviors vary across trip lengths.
Speaker Change: We're already benefiting from that active and real-time wealth transfer through multi-generational travel across our brands.
Speaker Change: Our research shows that younger generations, millennials and younger, are also benefiting from the 10% increase in leisure time compared to 2019.
Speaker Change: and that they intend to allocate more of this time on travel than any other leisure category.
Jason Liberty: This attractive traveler continues to gain share with our customer base at a faster pace than any other generation, and today one of every two customers is a millennia. Neil, or younger. Their travel need and behaviors vary across trip length and type, so the differentiated experiences offered by our incredible brands resonate extremely well with these next generations of cruisers. Our addressable market is growing, and we are attracting more customers into our vacation ecosystem. New to cruise customers are up double digits for us last year, and at the same time we are seeing stronger repeat rates. Once booked, guests are quickly engaging with us and buying significantly more onboard experiences per booking than in the second quarter of last year.
Speaker Change: This attractive traveler continues to gain share within our customer base at a faster pace than any other generation, and today, one of every two customers is a millennial or younger.
Speaker Change: Their travel needs and behaviors vary across trip length and type, so the differentiated experiences offered by our incredible brands resonate extremely well with these next generations of cruisers.
Unknown Speaker: The differentiated experiences offered by our incredible brands resonate extremely well with these next generations. Our addressable market is growing. Attracting more customers into our vaca New-to-Cruise Customers are up double-digits, first and last. At the same time, we are seeing stronger... Once booked, guests are quickly engaging with us and buying significantly more on-board experiences per second quarter, both earlier and at meaningfully higher rates. This translated into higher satisfaction rates and higher honors, putting customers at the center of our orbit, critical to our success and allows us to meet guests for all of life's moments. Making the vacation of a lifetime into a lifetime.
Speaker Change: Our addressable market is growing, and we are attracting more customers into our vacation ecosystem.
Speaker Change: New-to-Cruise customers are up double digits versus last year and at the same time we are seeing stronger repeat rates.
Speaker Change: Once booked, guests are quickly engaging with us and buying significantly more onboard experiences per booking than in the second quarter of last year.
Jason Liberty: Both earlier and at meaningfully higher APDs, translating into higher status faction rates and higher onboard spend. Putting customers at the center of our orbit has been critical to our success and allows us to meet guests for all of life's moments, transforming a vacation of a lifetime into a lifetime of vacations.
Speaker Change: Both earlier and at meaningfully higher APDs, translating into higher satisfaction rates and higher onboard spend.
Speaker Change: Putting customers at the center of our orbit has been critical to our success and allows us to meet guests for all of life's moments, transforming the vacation of a lifetime into a lifetime of vacations.
Jason Liberty: A key differentiator for us on this journey is our hardware, where we are constantly innovating. This quarter we took delivery of Utopia of the Seas, the ultimate we can get away, a shift positioned to be another game changer for our short Caribbean product. Our short Caribbean cruise product is an important entry point for new to cruise and new to brand, with nearly seven and ten guests falling in these categories and always doing more towards younger customers. Younger consumers find this product particularly appealing, and fact approximately 40% of guests who fall in this demographic have indicated that they intend to book a short vacation in the next 12 months.
Unknown Speaker: The differentiator for us on this is our hardware, where we are constantly. This quarter, we took delivery of Utopia of the Seas, the ultimate weekend getaway, a shift positioned to be another game changer for our short Caribbean cruise product. The short Caribbean cruise product is an important entry point. Nudibrand, with nearly 7 in 10 guests falling in these categories, are always skewing more towards younger consumers find this product particularly appealing. In fact, approximately 40% of guests who follow in this demographic attend a book, a short, Moreover, 90% of guests who shop on our short products, again with roughly half planning to return for a while. We also launched Silver Ray.
Speaker Change: A key differentiator for us on this journey is our hardware, where we are constantly innovating. This quarter we took delivery of Utopia of the Seas, the ultimate weekend getaway, a shift positioned to be another game changer for our short Caribbean product.
Speaker Change: Our short Caribbean cruise product is an important entry point for new to cruise and new to brand with nearly seven and ten guests Falling in these categories and always skewing more towards younger customers
Speaker Change: Younger consumers find this product particularly appealing. In fact, approximately 40% of guests who follow in this demographic have indicated that they intend to book a short vacation in the next 12 months.
Jason Liberty: Moreover, 90% of guests who sail on our short product intend to cruise again, with roughly half planning to return for a longer cruise. We also launched Silver Ray, which continues to redefine the ultra luxury segment. To introduce in the Nova class last year, Silver Nova and Silver Ray have attracted a higher mix of younger guests than the rest of the fleet. We have an exciting lineup of new shifts on order, including Celebrity Cruises, Celebrity XL, which launches in late 2025, and Royal Caribbean Star of the Seas debuting in mid 2025. The third icon, class shift in 2026, and the seventh awaits this class shift in 2028.
Speaker Change: Moreover, 90% of guests who sail on our short products intend to cruise again, with roughly half planning to return for a longer cruise.
Speaker Change: We also launched Sovereign, which continues to redefine the ultra-luxury segment.
Unknown Speaker: Introducing the NOVA class last year, Silver NOVA and Silver Ray have attracted higher-yielding guests than the rest of us. We have an exciting line-up of new ships on order. Celebrity Cruises, Celebrity XL, which launches in late 2025. Star of, the third icon class ship in 2026 and the seventh away.
Speaker Change: Since introducing the Nova class last year, Silver Nova and Silver Ray have attracted a higher mix of younger guests than the rest of the fleet.
Speaker Change: We have an exciting lineup of new ships on order, including Celebrity Cruises' Celebrity XL, which launches in late 2025, and Royal Caribbean's Star of the Seas, debuting in mid-2025, the third ICON class ship in 2026, and the seventh OASIS class ship in 2028.
Unknown Speaker: We also continue to lead the vacation industry with exciting new experiences on our show and our portfolio private desk. Perfect day at CoCoK continues to perform exceptionally well, and we are reaching important milestones. Royal Beach Club Paradise Island opening in 2025. Royal Beach Club in Cozumel, Mexico.
Jason Liberty: We also continued to lead the vacation industry with exciting new experiences on our ships and our portfolio private destinations. Perfect Day of Cocoa K continues to perform exceptionally well, and we are reaching important milestones on Royal Beach Club Paradise Island, opening in 2025, and Royal Beach Club and Cosmo Mexico opening in 2026. These new experiences uniquely positioned us to continue taking a share from land-based alternatives. As we deepen our relationship with our guests, this quarter's launch of our enterprise loyalty status match program is an important step in integrating our brands, rewarding our guests for staying within our family and making travel planning even more seamless.
Speaker Change: We also continue to lead the vacation industry with exciting new experiences on our ships and our portfolio private destinations.
Speaker Change: Perfect Day at Coco Cay continues to perform exceptionally well and we are reaching important milestones on Royal Beach Club Paradise Island opening in 2025 and Royal Beach Club in Cozumel, Mexico opening in 2026.
Unknown Speaker: These new experiences uniquely position us to continue taking a share from when we deepen our relationship with our guests with this quarter's launch of our Enterprise Loyalty Status Match program, awarding our guests for staying within our family of Travel Planning, even. Just two months since the program launched, we have seen a significant increase in enrollment across all of our brands and positive feedback from our loyal customers. Once customers book their dream vacation, over 90% utilize the new features. Notably, more than 70% of guests are making pre-cruise purchases before they spend more than double compared to those. Finally!
Speaker Change: These new experiences uniquely position us to continue taking a share from land-based alternatives.
Speaker Change: As we deepen our relationship with our guests, this quarter's launch of our Enterprise Loyalty Status Match program is an important step in integrating our brands, rewarding our guests for staying within our family of brands, and making travel planning even more seamless.
Jason Liberty: In just two months since the program launched, we have seen a significant increase in enrollment across all of our brands and positive feedback from our Royal fan base. Once customers booked their dream vacation, over 90% utilize new features and enhancement on our apps. Notably, more than 70% of guests are making precarious purchases before Bay Sale, and they spend more than double compared to those who only make purchases on board.
Speaker Change: In just two months since the program launched, we have seen a significant increase in enrollment across all of our brands and positive feedback from our loyal fan base.
Speaker Change: Once customers book their dream vacation, over 90% utilize new features and enhancement on our apps.
Speaker Change: Notably, more than 70% of guests are making pre-cruise purchases before they sail, and they spend more than double compared to those who only make purchases on board.
Jason Liberty: Finally, our sustainability ambition to help inform our strategic and financial decisions daily. Supporting our mission to deliver the best vacation experiences responsibly. We remain committed to our see the future vision, sustaining the planet, energizing communities, and accelerating innovation. Our recent maritime decarbonization summit on board Utopia of the Seas underscores our commitment to reaching net zero emissions by 2050 through industry-wide collaboration. More than 30 ship owners, ship builders, and technology and energy providers convened to catalyze advancements in necessary technological solutions and alternative fuels. We are optimistic about this important step in unifying our industry and fostering an environment for advancing quality and scalable solutions.
Unknown Speaker: Sustainability Ambitions help inform our strategic and financial planning, reporting on our mission to deliver the best vacation experience, and remain committed to our See the Future vision. Standing the Planet, Energizing Communities, and Accelerating. Our recent maritime decarbonization summit on board Utopia underscores our commitment to reaching net zero emissions by 20, History Wide Collaborative. More than 30 ship owners, shipbuilders, and technology and energy providers. University.
Speaker Change: Finally, our sustainability ambitions help inform our strategic and financial decisions daily, supporting our mission to deliver the best vacation experiences responsibly.
Speaker Change: We remain committed to our See the Future vision.
Speaker Change: Sustaining the Planet, Energizing Communities, and Accelerating Innovation.
Speaker Change: Our recent Maritime Decarbonization Summit onboard Utopia of the Seas underscores our commitment to reaching net-zero emissions by 2050 through industry-wide collaboration.
Speaker Change: More than 30 shipowners, shipbuilders, and technology and energy providers convened to catalyze advancements in necessary technological solutions and alternative fuels.
Unknown Speaker: We are optimistic about this important step in unifying our industry and fostering an environment of quality and scalability. In summary, our business continues to perform exceptionally well, and we are very pleased with our Achieving Trifecta Early. This sets us up well to take share from the rapidly growing $1.9 trillion market with our strong platform and our proven strategy, creating a lifetime of vacation experiences for our customers while delivering long-term shareholder value. With that, I will turn the call over to Naftali.
Speaker Change: We are optimistic about this important step in unifying our industry and fostering an environment for advancing quality and scalable, sustainable solutions.
Jason Liberty: In summary, our business continues to perform exceptionally well, and we are very pleased with our performance, achieving trifecta early and reinstating the dividend. This sets us up well as we seek to take share from the rapidly growing $1.9 trillion vacation market. With our strong platform, our proven strategies, we are creating a lifetime of vacation experiences for our customers while delivering long-term shareholder value and strong financial results.
Speaker Change: In summary, our business continues to perform exceptionally well, and we are very pleased with our performance, achieving trifecta early and reinstating the dividend.
Speaker Change: This sets us up well as we seek to take share from the rapidly growing 1.9 trillion dollar vacation market.
Speaker Change: With our strong platform, our proven strategies, we are creating a lifetime of vacation experiences for our customers while delivering long-term shareholder value and strong financial results.
Naftali Holtz: And with that, I will turn the call over to Naftali. Thank you, Jason, and good morning, everyone. I will start by reviewing second quarter results. Our teams delivered another strong performance that exceeded our expectations, resulting in an adjusted earnings per share of $3.21. The 51 cent per share outperformance compared to the midpoint of our guidance is driven by better revenue across our leading brands and across key itineraries, as well as approximately 15 cents per share favorable timing of expenses. We finished the second quarter with a net yield growth of 13.3%. Low factors were 108.2 and contributed approximately 300 basis points to yield growth.
Speaker Change: Alliance. And with that, I will turn the call over to Naftali. Naftali.
Unknown Speaker: Jason, and good morning, start by reviewing Delivered another strong performance that exceeded our expectations. Resultant an adjusted earnings per share of $3.00. 51 cents per share of performance compared to the midpoint of our guidance. [inaudible] as well as a proxy. $0.15 per share, favorable timing, finished the second quarter with a net yield growth. Load Factors were 108.2.
Naftali: Thank you, Jason, and good morning, everyone. I will start by reviewing second quarter results. Our teams delivered another strong performance that exceeded our expectations, resulting in adjusted earnings per share of $3.21.
Naftali: The $0.51 per share outperformance compared to the midpoint of our guidance is driven by better revenue across our leading brands and across key itineraries, as well as approximately $0.15 per share favorable timing of expenses.
Naftali: We finished the second quarter with a net yield growth of 13.3%.
Naftali: Load factors were 108.2
Speaker Change: and contributed approximately 300 basis points to yield growth.
Naftali Holtz: With the remaining increase driven by rates that were up by 10% from both new and existing hardware. Okey products had double-digit yield growth, which strengthened in close and demand for the Caribbean and Europe to drove the out performance in the quarter. And CC excluding fuel increased 5.7% in constant currency. The favorable cost performance compared to our guidance is driven by favorable timing of expenses that more than offset the negative impact of stock compensation, given the significant appreciation of our stock price during the second quarter. Adjusted EBITDA was $1.6 billion, and growth EBITDA margin was 38%.
Naftali Holtz: Driven by rates that were up by 10% from both, all key products had double-digit yield growth, with strength in close-in-demand for the Caribbean and Europe driving output. The CDC, excluding fuel, increased 5.7 percent, adjusted EBITDA. dollars and Gross EBITDA Margin. As Jason mentioned, we also achieved our trifecta targets on a trailing 12-month basis as of the end of the year. Riverd, $113, adjusted EBIT up 13% above our triple-digit target. Most mid-teens are white.
Speaker Change: With a remaining increase driven by rates that were up by 10% from both new and existing hardware.
Speaker Change: All key products had double-digit yield growth, with strength in close in demand for the Caribbean and Europe that drove the outperformance in the quarter.
Speaker Change: NCC, excluding fuel, increased 5.7% in constant currency.
Speaker Change: A favorable cost performance compared to our guidance is driven by favorable timing of expenses that more than offset the negative impact of stock compensation given the significant appreciation of our stock price during the second quarter.
Speaker Change: Adjusted EBITDA was 1.6 billion dollars and growth EBITDA margin was 38%.
Naftali Holtz: As Jason mentioned, we also achieved our traffected targets on a trailing 12-month basis as of the end of the second quarter. With delivered $113 adjusted EBITDA for APCD, 13% above our triple digit target, mid-teens our YC consistent with our target in distincts, and $10 and eight cents adjusted EPS slightly above our double. Digital Target. Leverage was below three and a half times when excluding the impact of new ships that were delivered mid-year, and we are on track to get very close to our double-digit carbon intensity reduction targets by year-end. Our 2024 book position remains very strong across all products and markets and continues to outpace last year in both rate and volume.
Speaker Change: We delivered $113 adjusted EBITDA per APCD, 13% above our triple-digit target. Mid-teens RYC, consistent with our target in the teens.
Unknown Speaker: $10.08 adjusted EPS, slightly above our double, Leverage was below three and a half times. [inaudible] 2024 booked position remains very strong. All product, outpaced last year in both rate and volume, makes up approximately... 25% of our capacity. Product, Hardware, and Higher Price, Unknown Speaker
Speaker Change: and $10.08 adjusted EPS slightly above our double-digit target.
Speaker Change: Leverage was below three and a half times when excluding the impact of new ships that were delivered mid-year and we are on track to get very close to our double-digit carbon intensity reduction target by year-end.
Speaker Change: Our 2024 booked position remains very strong across all products and markets and continues to outpace last year in both rate and volume.
Naftali Holtz: The Caribbean makes up approximately 55 percent of our capacity for the year and 42 percent for the third quarter. This product is booked ahead in both rate and volume, and the strong yield growth is driven by new hardware and higher pricing on existing ships, supported by our private destinations. Europe accounts for 15 percent of our capacity for the full year and 28 percent during the third quarter. Europe is in a record book position in both rate and volume and continuous strength in pricing. It resulted in an increase in our revenue expectations for Europe's salings. Our summer Alaska season represents 6 percent of full year capacity and 14 percent in the third quarter.
Speaker Change: The Caribbean makes up approximately 55% of our capacity for the year and 42% for the third quarter.
Speaker Change: This product is booked ahead in both rate and volume and the strong yield growth is driven by new hardware and higher pricing on existing ships supported by our private destinations.
Unknown Speaker: Europe, I count, Europe is in a record book position, [inaudible] Our Revenue Expectations: Summer Alaska season represents 6% of full-year capacity as a result of upgrading the hardware in the market, like Europe. Now, let me talk about our increased guidance. Net yield, I expect it to be up from 4 to 10.9.
Speaker Change: Europe accounts for 15% of our capacity for the full year and 28% during the third quarter.
Speaker Change: Europe is in a record book position in both rate and volume and continued strength in pricing it resulted in an increase in our revenue expectations for Europe sailings.
Speaker Change: Our summer Alaska season represents 6% of full year capacity and 14% in the third quarter.
Naftali Holtz: We have increased our capacity this year as a result of upgrading the hardware in the market. Like Europe, we have seen strong demand since our last earnings goal, leading to increase expectations for yield growth for this product.
Speaker Change: We have increased our capacity this year as a result of upgrading the hardware in the market. Like Europe , we have seen strong demand since our last earnings call, leading to increased expectations for yield growth for this product.
Naftali Holtz: Now let me talk about our increased guidance expectations for 2024. Net yields are expected to be up 10.4 to 10.9 percent for the full year. The increasing guidance is driven by higher pricing for both new hardware and light for light, as well as on board revenue. The yield cadence for the year is influenced by the low factor and pricing power catch up in the first half. The timing of cocoa case opening makes the comp easier for the first half of 2024, and when adjusting for such structural changes, yield growth is just about the same amount in each quarter compared to 2019.
Speaker Change: Now, let me talk about our increased guidance expectations for 2024.
Speaker Change: Net yield I expect it to be up 10.4 to 10.9 percent for the full year.
Unknown Speaker: The guidance is driven by higher prices for hardware and Like for Like, as well as on. The Yield Cadence for the Year, by The Low Factor and Pricing Power Catch-Up. Timing of Coco Caves, Yield growth is just about the same amount in each quarter compared to 2019. Full Year, Nat Kruskoff, are expected to be up approximately or prior. Very few dry dock days in the third quarter. More, together with Timing of Stockholm, on our call, paid a fuel expense of $1.17 billion. Raising Our Adjusted EPS Guideline. $11.35 to $11.35.
Speaker Change: The increase in the guidance is driven by higher pricing for both new hardware and like-for-like, as well as onboard revenue.
Speaker Change: The yield cadence for the year is influenced by the load factor and pricing power catch-up in the first half.
Speaker Change: The timing of COCO-K's opening makes the comp easier for the first half of 2024, and when adjusting for such structural changes, yield growth is just about the same amount in each quarter compared to 2019.
Naftali Holtz: Now moving to costs. Full year net cruise costs excluding fuel are expected to be up approximately 6 percent. Our cost metric is up 50 basis points compared to our prior guidance and is driven entirely by higher non-cash stock-based compensation given the significant increase in the stock price since the last earnings goal. We have very few dry dock days in the third quarter but significantly more in the fourth quarter, which together with timing of stock compensation expense will weigh on our cost metrics for the fourth quarter. We anticipate a fuel expense of 1.17 billion for the year and where 61 percent hedged at below market rates.
Speaker Change: Now moving to costs.
Speaker Change: Full-year net cruise costs, excluding fuel, are expected to be up approximately 6%.
Speaker Change: Our cost metric is up 50 basis points compared to our prior guidance and is driven entirely by higher non-cash stock-based compensation given the significant increase in the stock price since the last earnings call.
Speaker Change: We have very few dry dock days in the third quarter, but significantly more in the fourth quarter, which together with timing of stock compensation expense will weigh on our cost metrics for the fourth quarter.
Speaker Change: We anticipate a fuel expense of $1.17 billion for the year and we're 61% hedged at below market rates.
Naftali Holtz: We are raising our adjusted EPS guidance to $11.35 to $11.45. I want to provide a little more color on the progress of our earnings guidance. We are increasing our guidance by 60 cents for the year. About half of the increase is driven by second quarter close in demand, and the other half is driven by better pricing and business outlook for the rest of the year. As I mentioned, we had about 15 cents of cost timing in the second quarter, with the shifting into the back.
Speaker Change: We are raising our adjusted EPS guidance to $11.35 to $11.45.
Unknown Speaker: Provide a little more color on the progress of our guidance by $0.60 for the year about half the second quarter close, The Other Half, by Better Pricing and Business Outlook. As mentioned, we had about 15 cents of cost timing in the second quarter, which is shifting into the back. Now I will discuss our third quarter, plan to operate 13.4 million, and net yields are expected to be up six and a half. Daddy's on Top.
Speaker Change: I want to provide a little more color on the progress of our earnings guidance.
Speaker Change: We are increasing our guidance by 60 cents for the year. About half of the increase is driven by second quarter close in demand, and the other half is driven by better pricing and business outlook for the rest of the year.
Speaker Change: As I mentioned, we had about 15 cents of cost timing in the second quarter, which is shifting into the back half of the year.
Naftali Holtz: Coffee Lea. Now I will discuss our third quarter guidance. We plan to operate 13.4 million APCBs during the third quarter. Net yields are expected to be up 6.5% to 7% compared to 2023, and that is on top of a 16.7% yield growth last year. Net cruise costs, excluding fuel, are expected to be up 4.7% to 5.2%. Taking all of this into account, we expect the adjusted earnings per share for the quarter to be $4.90 to $5.
Speaker Change: Now I will discuss our third quarter guidance.
Speaker Change: We plan to operate 13.4 million APCDs during the third quarter. Net yields are expected to be up 6.5% to 7% compared to 2023, and that is on top of a 16.7% yield growth last year.
Unknown Speaker: 7% Yield Growth. Net cruise costs, excluding fuel, are expected to be up 4.7%. All of this into account. Adjusted Earnings Per Share for the quarter is expected to be $4.00. Turning to our balance, we ended the quarter with $3.8 billion in cash, making significant progress in strengthening the balance. Better performance and disciplined capital allocation allowed us to reduce leverage below three and a half times at the end of the second quarter.
Speaker Change: Net cruise costs, excluding fuel, are expected to be up 4.7 to 5.2 percent.
Speaker Change: Taking all of this into account, we expect the adjusted earnings per share for the quarter to be $4.90 to $5.00.
Naftali Holtz: Turning to our balance sheet, we ended the quarter with $3.8 billion in liquidity. We have been making significant progress in strengthening the balance sheet towards our goal of investment grid metrics. Better performance and discipline capital allocation allowed us to reduce leverage below 3.5 times as at the end of the second quarter when excluding the impact of new ships that were delivered mid-year. This level is within our target leverage range. We plan to continue to proactively pay down debt and pursue opportunistic refinancing to manage maturities, reduce interest expense, and achieve an unsecured balance sheet. During the second quarter, we paid down the remaining balance of our debt holiday that allowed us to remove any restrictions around capital return.
Speaker Change: Turning to our balance sheet.
Speaker Change: We ended the quarter with $3.8 billion in liquidity.
Speaker Change: We have been making significant progress in strengthening the balance sheet towards our goal of investment grade metrics.
Speaker Change: Better performance and disciplined capital allocation allowed us to reduce leverage below three and a half times as of the end of the second quarter, when excluding the impact of new ships that were delivered mid-year. This level is within our target leverage range.
Unknown Speaker: [inaudible] Target Leverage Range. Proactively Pay Down Debt and Pursue Opportunistic Refinancings to Manage Maturity. During the second quarter, we paid down the remaining balance of our debt holiday that allowed us... As we saw in the press release today, we also initiated a quarterly dividend of $0.40 per share. Committed and focused on executing our strategy and delivering on. With that, I will ask the operator to open the call. At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad.
Speaker Change: We plan to continue to proactively pay down debt and pursue opportunistic refinancings to manage maturities, reduce interest expense, and achieve an unsecured balance sheet.
Speaker Change: During the second quarter, we paid down the remaining balance of our debt holiday that allowed us to remove any restrictions around capital return.
Naftali Holtz: As you saw in the press released today, we also initiated a quarterly dividend of 40 cents per share. In closing, we remain committed and focused on executing in our strategy and delivering on our mission.
Speaker Change: As you saw in the press release today, we also initiated a quarterly dividend of $0.40 per share.
Operator: With that, I will ask the operator to open the call for a question-and-answer session.
Speaker Change: With that, I will ask the operator to open the call for a question and answer session.
Operator: At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. We ask that you limit yourself to one question and one follow-up, then re-enter the queue for any additional questions you may have.
Speaker Change: At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. We ask that you limit yourself to one question and one follow-up, then re-enter the queue for any additional questions you may have. Our first question comes from the line of Steven Wieczynski with Staple. Please go ahead.
Unknown Speaker: We ask that you limit yourself to one question and one follow-up, then re-enter the queue for any additional questions you may have. Our first question comes from the line of Steven Wieczynski with Staple. Please go ahead. Yeah, hey, guys. Good morning.
Stephen Wieczynski: Our first question comes from the line of Stephen. Was in ski with staple.
Stephen Wieczynski: Please go ahead. Yeah, hey, guys. Good morning.
Unknown Speaker: Congratulations. Another pretty solid beat here. So Jason and or not, if we think about the guidance for the rest of the year, not to kind of touched on this very briefly, but, you know, the feedback we're getting, you know, I would say from investors this morning that the the embedded fourth quarter yield guide of I think it's just about 5% is showing a, you know, immaterial, sequential decline and could possibly indicate bookings are, you know, slowing, I, Unknown Speaker I'm guessing the lower yield is more a function of you guys being at, you know, essentially full load factors last year in the fourth quarter of 23.
Jason Liberty: Congratulations. Another pretty solid behavior. So Jason and or not. Yeah, if we think about the guidance for the rest of the year, not to kind of test on this very briefly, but you know, the feedback we're getting. I would say from investors this morning that the embedded fourth quarter yield guide of, I think it's just about 5%, is showing a, you know, a material sequential decline and could possibly indicate bookings are. You know, slowing, I guess.
Steven Moyer Wieczynski: Hey guys, good morning, congratulations, another pretty solid beat here.
Steven Moyer Wieczynski: So Jason and or Naftali, if we think about the guidance for the rest of the year, Naftali kind of touched on this very briefly. But, you know, the feedback we're getting, you know, I would say from investors this morning is that the the embedded fourth quarter yield guide of I think it's just about 5% is showing a
Steven Moyer Wieczynski: immaterial sequential decline and could possibly indicate bookings are
Jason Liberty: Yeah, I'm guessing the lower yield is more a function of you guys being at essentially full load factors last year in the fourth quarter of 23, but it's anything you would add on there. And then maybe, you know, also a little bit more color on. You know, you know, 2525 bookings, and if there's any been any, you know, changes from in booking patterns for next year as well.
Speaker Change: Blowing I guess
Speaker Change: I'm guessing the lower yield is more a function of you guys being at, you know, essentially full load factors last year in the fourth quarter of 23. But is there anything you would add on there? And then maybe, you know, also a little bit more color on 2025 bookings, and if there's any been any, you know, changes from in booking patterns for next year as well?
Unknown Speaker: But is there anything you would add on there? And then maybe, you know, also a little bit more color on 2025 bookings and if there's been any changes in booking patterns for next year as well. Good morning, Steve. Hope all is well.
Jason Liberty: Yeah, we're good morning, Steve. Hope all is well. So I think maybe just first starting off on the back half of the year. You know, it obviously, you are yield. Our yields have grown significantly since 2019, so the back half of the year, your yields are up, you know, 25% versus 2019. And so I think our commentary of the strength and how we feel about the back half of the year. I think it's still very bullish. But, as you mentioned, you know, we have been ahead of the curve in terms of our bringing our business back up into our load factors relative to last year.
Unknown Speaker: So I think maybe just first starting off on the back half of the year, you know, obviously your yield, our yields have grown significantly since 2019. So in the back half of the year, our yields are up, you know, 25% versus versus 2019. And so I think our commentary of strength and how we feel about the back half of the year is still very bullish. But as you mentioned, we have been ahead of the curve in terms of bringing our business back up. And so, relative to last year, our load factors were pretty normalized in the back half of last year.
Speaker Change: Yeah.
Speaker Change: Well, good morning, Steve. Hope all is well. So I think maybe just first starting off on the back half of the year, you know, it obviously, our yield.
Speaker Change: Our yields have grown significantly since 2019, so the back half of the year our yields are up 25% versus 2019. And so I think our commentary of strength and how we feel about the back half of the year I think is still very bullish.
Speaker Change: But as you mentioned, you know, we have been ahead of the curve in terms of our bringing our business back up and so our load factors relative to last year, our load factors were pretty normalized.
Jason Liberty: Our load factors were pretty normalized in the back half of last year. So really all the yield improvement that you're seeing in Q3 and Q4 is really being driven by price. And so I think it's a really strong indication that not only the willingness to pay more, but these prices continue to increase as we, you know, build and manage demand.
Unknown Speaker: So really, all the yield improvement that you're seeing in Q3 and Q4 is really being driven by price. And so I think it's a really strong indication that not only the willingness to pay more, but these prices continue to increase as we build and manage demand. When we think about 2025, first, you know, the reason why. You know, it's July, so we typically don't talk a lot about 2025. So it is early.
Speaker Change: In the back half of last year, so really all the yield improvement that you're seeing In q3 and q4 is really being driven by by price
Speaker Change: and so I think it's a really strong indication that not only
Speaker Change: The Willingness to Pay More, but these prices continue to...
Speaker Change: -...to increase as we...
Jason Liberty: When we think about 2025, first, you know, the reason why, you know, it's July, so we typically don't talk a lot about 2025. So it is it is early. We mentioned in the release that we are, we're now in a place where we're taking more bookings for 2025 than we are for 2024. So the strength and the commentary that we talk about on pricing and pricing increasing very much applies to 2025. And, and, and, and beyond. So we feel very good. We're in a very strong book position for 2025; pricing is up and increasing. Or the trends that we continue to see.
Speaker Change: You know, build and manage demand. When we think about 2025, first, you know, the reason why, you know, it's July , so we typically don't talk a lot about about 2025. So it is it is it is early.
Unknown Speaker: We mentioned in the release that we are now in a place where we're taking more bookings for 2025 than we are for 2024. So the strength and the commentary that we talk about on pricing and pricing increases very much applies to 2025 and beyond. So we feel very good.
Speaker Change: We mentioned in the release that we are...
Speaker Change: We're now in a place where we're taking more bookings for 2025 than we are for 2024.
Speaker Change: So, the strength in the commentary that we talk about.
Speaker Change: on pricing.
Speaker Change: Unknown Speaker And pricing increasing very much applies to 2025 and beyond. So we feel very good we're in a very strong book position for 2025. Pricing is up and increasing.
Unknown Speaker: We're in a very strong book position for 2025. Pricing is up, and increasing are the trends that we continue to see. But I think it's important to just note, again, that the load factor recovery is done.
Jason Liberty: But I think it's important to just note again that the load factor recovery is done. We are operating at full load factors. I think it needs to also take into account that, you know, the yields have improved by over 25% versus 19. And so it's not necessarily a likeful like story in the industry. I think to point to. So I think we feel really good about 2025. The pattern show pricing continues to accelerate. And I think that, you know, what you're starting to see in the back half of the year. And still elevated compared to like what we described as our formula on success of that, you know, the file that is at the very top end of that in Q4 and above.
Speaker Change: Are the trends that we continue to see. But I think it's important to just note again that the load factor
Unknown Speaker: We are operating at full load factors. I think it needs to also be taken into account that, you know, yields have improved by over 25% versus 19. So it's not necessarily a like-for-like story in the industry, I think.
Speaker Change: Recovery is done. We are operating at full load factors.
Speaker Change: I think it needs to also take into account that, you know, the yields have improved by over 25%.
Speaker Change: Unknown Speaker So it's not necessarily a like-for-like story in the industry, I think to point to. So I think we feel really good about 2025. The patterns show pricing continues to accelerate.
Unknown Speaker: So I think we feel really good about 2025. The patterns show that pricing continues to accelerate. And I think that, you know, what you're starting to see in the back half of the year is still elevated compared to what we described as our formula of success of that moderate yield growth, which is typically around 3% to 5%. And we're pointing to a yield profile that is at the very top end of that in Q4 and above.
Unknown Speaker: And I think that what you're starting to see in the back half of the year is still
Unknown Speaker: Elevated compared to like what we described as our formula of success of that you know moderate yield growth which is typically around three to five percent and we're pointing to
Unknown Speaker: to be a yield profile that is at the very top end of that in Q4 and above. And so I think we feel that, you know, for us, if we're growing our yields moderately, controlling our cost, growing our business.
Jason Liberty: And so I think we feel that, you know, for us, we're growing our yields moderately, controlling our cost, growing our business in a disciplined way. What you see is significant margin, accretion, significant return profile and continue to step change, significant step change in our earnings profile.
Unknown Speaker: And so I think we feel that, you know, for us, if we're growing our yields moderately, controlling our cost, growing our business in a disciplined way, what you see is significant margin accretion, a significant return profile, and continued step change, a significant step change in our earnings profile. And Steve, I'll just add one, just add one more thing about 2019. I said it in my prepared remarks, but also remember in 2019, the first half had an easier competition, right? Because we didn't have CoCoK open; it opened in the second half of the year.
Unknown Speaker: In a disciplined way, what you see is significant margin accretion, significant return profile, and continued step change, significant step change in our earnings profile.
Jason Liberty: and Steve Elders at one more thing about 2019, I said it in my prepared remarks, but also remember in 2019, the first half had easier comp because we didn't have Coca-Cola open, it opened in the second half of the year and that, with a lot of other structural chances, was five years ago, it's pretty consistent through that period in terms of your growth.
Unknown Speaker: and Steve Elders at 1.
Steven Moyer Wieczynski: Just add one more thing about
Steven Moyer Wieczynski: I said it in my prepared remarks, but also remember in 2019, the first half had an easier because we didn't have Coco Cay open. It opened in the second half of the year.
Unknown Speaker: And that, with a lot of other structural changes, was five years ago. It's pretty consistent through that period in terms of your growth. Thanks for that cover, guys.
Speaker Change: it was five years ago, it's pretty consistent through that period in terms of your growth.
Unknown Speaker: The second question, Jason, would be around your recent change in deployment with Ovation. You know, essentially taking that ship out of China and homeporting it on the West Coast. We've gotten a bunch of questions about this move, and I think investors are concerned it's a sign that the Chinese market might not be as strong as you would have previously thought, or maybe it's just the domestic market.
Stephen Wieczynski: Thanks for that color, guys.
Stephen Wieczynski: Second question, Jason, would be around your recent change in deployment with Ovation, essentially taking that ship, added China home porting it on the west coast. We've gotten a bunch of questions about this movement; now the investors are concerned at the time that the China market might not be as strong as what you would have previously thought, or maybe it's just the domestic market is just way more profitable right now. But any thoughts there is to any color around the move that would be helpful. Thanks.
Speaker Change: Thanks for that cover, guys.
Speaker Change: Second question, Jason, would be around your recent change in deployment with Ovation.
Speaker Change: You know essentially taking that ship
Speaker Change: Unknown Speaker Out of China, home porting it on the West Coast. We've gotten a bunch of questions about this movement.
Speaker Change: I think investors are concerned at this time that the China market might not be as strong as what you would have previously thought, or maybe it's just the domestic market is just way more profitable right now. But any thoughts there as to, or any color around the move there would be helpful. Thanks.
Michael W. Bayley: Way more profitable right now. But, you know, any thoughts there as to, you know, or any color on the move there would be helpful. Thanks. Hey, Steve, it's Michael. You know, we're kind of in this great position of having very good market choices to make. I believe in the long-term potential for China has not changed at all.
Michael Bayley: Hey, Steve, it's Michael. You know, we're kind of in this great position of having very good market choices to make. We are belief in the long term potential for China is not changed at all. Spectrum, as you know, we started operating it out of Shanghai a few months ago. It's performing very well in the market, and we feel good about the China market. It still hasn't reached the levels we're seeing in the American market, and of course this is where we've got these good choices. And we have strong ambitions to grow the West Coast in the US.
Speaker Change: Hey Steve, it's Michael. You know, we're kind of in this great position of having very good market choices to make.
Michael W. Bayley: Spectrum, as you know, we started operating it out of Shanghai a few months ago. It's performing very well in the market, and we feel good about the Chinese market. It still hasn't reached the levels we're seeing in the American market.
Steven Moyer Wieczynski: We, I believe in the long-term potential for China has not changed at all. Spectrum, as you know, we started operating it out of Shanghai a few months ago.
Speaker Change: It's performing very well in the market, and we feel good about the China market. It still hasn't reached the levels we're seeing in the American market, and of course, this is where we've got these good choices, and we have.
Unknown Speaker: And of course, this is where we've got these good choices and we have strong ambitions to grow the West Coast of the US. If you think about California, it's the sixth largest economy in the world; a navigator, which is the ship we put on the west coast about a year or so ago has been performing exceptionally well. So we're kind of faced with this choice. Should we deploy Ovation in Tianjin, or should we deploy it in California?
Michael Bayley: If you think about California, it's the sixth largest economy in the world. And navigator, which is the ship we put in the west coast about a year or so ago, has been performing exceptionally well. So, kind of face with this choice should we deploy. I think we have a great innovation into. Jan Jen or should we deploy into California, and we made the decision really based upon maximizing performance, but it doesn't in any way indicate that we're moving away from the China market. We're quite committed to the opportunity there, and I think you'll see that we'll be announcing in the future more deployment into China.
Speaker Change: Strong ambitions to grow the West Coast in the U.S. If you think about California, it's the sixth largest economy in the world.
Speaker Change: A navigator, which is the ship we put in the west coast about a year or so ago, has been performing exceptionally well.
Speaker Change: We're kind of faced with this choice should we should we deploy Ovation into
Speaker Change: Tianjin or should we deploy into California and we made the decision really based upon maximizing performance But it doesn't in any way indicate that we're moving away from the China market We're quite committed to the opportunity there And I think you'll see that we'll we'll be announcing in the future more deployment into into China
Unknown Speaker: And we made the decision really based upon maximizing performance, but it doesn't, in any way, indicate that we're moving away from the Chinese market. We're quite committed to the opportunity there. And I think you'll see that we'll be announcing more deployments into China in the future. Thanks guys, thanks for the call; I appreciate it. Our next question comes from the line of Brandt Montour with Barclays. Please go ahead. Hey, good morning everybody.
Stephen Wieczynski: Great. Thanks, guys. Thanks for the color. I appreciate it.
Brandt Montour: Our next question comes from the line of branch monitor with Oracle. Please go ahead.
Speaker Change: Great. Thanks, guys. Thanks for the color. Appreciate it.
Speaker Change: Our next question comes from the line of Brandt Montour with Borclays. Please go ahead.
Unknown Speaker: Thanks for taking my question and congratulations on the dividend announcement this morning. So my first question is on the fourth quarter, just following up on Steven's question, you know, the 5% implied yield guidance, which, you know, I know you have tougher comps, and that's all price. Can you help us understand what the sort of way to think about the like, the embedded like for like, is within that? And maybe, maybe it's easier to answer, how does that compare versus the like for like that you do generally embed in your longer-term algorithm? Yeah, well, you know, so I would comment on Brandt first, and I hope Paul as well.
Brandt Montour: Good morning, everybody. Thanks for taking my question, and congratulations on the dividend announcement this morning. So first question is on the fourth quarter, just following up on a speed and question. The five percent implied yield guidance, which, you know, I know you have tougher comps and that's all price. Can you help us understand what the sort of, how to think about the likes of the embedded likes of the like is within that and maybe it's easier to answer. How does that compare versus the like for like that you generally embed in your longer term. Yeah.
Brandt Antoine Montour: Hey, good morning everybody. Thanks for taking my question and congratulations on the dividend announcement this morning.
Unknown Speaker: Unknown Speaker So first question is on the fourth quarter just following up on Steven's question, you know, the 5% implied yield guidance, which you know, I know you have tougher comps, and that's all price.
Speaker Change: Can you help us understand how to think about the embedded like-for-like is within that, and maybe it's easier to answer. How does that compare versus the like-for-like that you generally embed in your longer-term algo?
Unknown Speaker: It's very, actually, if anything, the like for like is growing faster than what would be in our typical algorithm. And as new ships come on, they're meaningful, but you know, the overall denominator is much larger. So the impact on it on the yield profile, you know, I mean, ICON is obviously just unbelievably successful. Utopia is crushing it.
Naftali Holtz: Well, you know, I'm so I would comment, Brad. First, I hope all is well. It's very actually; if anything, the like for like is growing faster than what would be in our typical algorithm. And new ships come on; they're meaningful, but you know, the overall denominator is much larger. So the impact on it on the yoke profile, you know, I mean, Icon is obviously just unbelievably successful. Utopia is crushing it. But it's a small percentage of our overall denominator. So really what you're reading into that five percent is that the like is growing. And as part of that story, it is not just the ticket, but it's also what's happening on board.
Speaker Change: Yeah, well, you know, so I would comment, Brandt, first. Hope all as well. Um, it's very, actually, if anything, the like for like is growing faster.
Speaker Change: Unknown Speaker Then what would be in our typical algorithm and as new ships come on.
Speaker Change: they're meaningful but the overall denominator is much larger. So the impact on the yield profile, Icon is obviously just unbelievably successful, Utopia is crushing it.
Unknown Speaker: But it's a smaller percentage of our overall denominator. So really, what you're reading into that 5% is that the like for like is growing. And as part of that story is not just the ticket, but it's also what's happening on board. And I think the power of our pre-cruise commerce engine is shifting more and more of that booking activity for onboard spending forward, which is also resulting in us getting our guests to have a fuller breadth of experiences, which increases our share of wallet. Great! That's super helpful.
Speaker Change: Unknown Speaker But it's a smaller percentage of our overall denominator. So really what you're reading into that 5% is that the like for like is growing. And as part of that story is not just the ticket, but it's also what's happening
Naftali Holtz: And I think the power of our pre crews, commerce engine is shifting more and more on that booking activity for onboard spend forward, which is also resulting in us. You're getting our guests to have a full of breath of experiences, which increases our share of wall.
Speaker Change: Unknown Speaker on board and I think the power of our.
Speaker Change: of our PreCruise Commerce Engine is shifting more and more of that booking activity for onboard spend forward, which is also.
Speaker Change: Resulting in us getting our guests to have a fuller breadth of experiences, which increases our share of wallet.
Brandt Montour: Great, that's super helpful.
Unknown Speaker: And then just as a follow-up, and I apologize for sort of a shorter-term question, but this earnings season, we have heard from land-based hotel operators that made some softer comments on pricing sensitivity. I'm curious, when you look at your 25 booking data, what you're seeing coming in, are you starting to see any pricing sensitivity at all in the lower end itineraries, the older ships, your base, your Royal Caribbean brand versus your upper brands, anything that you're seeing?
Jason Liberty: And then just as a follow-up, and I apologize for sort of a shorter term question, but it's not even season. We have heard from land-based, some land-based hotel operators made some softer comments on pricing sensitivity. I'm curious, when you look at your 25 bookings data, what you're seeing coming in, are you starting to see any pricing sensitivity at all forming at the lower end, itineraries, the older ships, your base, your Royal Caribbean brand versus your upper brand, anything that you're seeing? Yeah, we obviously have the opportunity of taking on 25, 30, 35,000 bookings today. We get to see the cash register ring pretty much every second somewhere in the world on our ships.
Speaker Change: Great. That's super helpful. And then just as a follow-up, and I apologize for sort of a shorter-term question, but this earnings season, we have heard from land-based
Speaker Change: Some land-based hotel operators made some softer comments on pricing sensitivity. I'm curious, when you look at your 25 bookings data, what you're seeing coming in, are you starting to see any
Speaker Change: Pricing sensitivity at all, forming at the lower end itineraries, the older ships, your base, your Royal Caribbean brand versus your upper brands, anything that you're seeing?
Unknown Speaker: Yeah, obviously, you know, we have the opportunity of taking on 25, 30, 35,000 bookings a day; we get to see the cash register ring every pretty much every second, somewhere in the world on our ships. And I know, I know, there might be a group seeking to hear that there's some type of break in the pattern, but there just isn't, you know; we're seeing our guests; the booking window continues to extend. So they're planning further out, and their willingness to pay more for these incredible vacation experiences continues to increase. So our pricing will continue to increase into 2025. And, and into 2026.
Speaker Change: Yeah, we obviously, you know, we, we, we have the opportunity of
Speaker Change: You know taking on 25, 30, 35 thousand bookings a day. You get to see the cash register ring every, pretty much every second somewhere in the world on our ships. And I know there might be a group seeking to hear that there's some type of break.
Jason Liberty: And I know there might be a group seeking to hear that there's some type of break in the pattern, but there just isn't. You know, we're seeing our guests; the booking window continues to extend, so they're planning further out. They're willing this to pay more for these incredible vacation experiences. Continues to increase, so our pricing continues to increase into 2025 and into 2026. And that's not just happening at the short product; that's happening in the ultra-luxury space as well. And I think, people say, well, how can that be? I think it's still just the reality that there's still a 20% value gap to land-based vacation.
Speaker Change: and the pattern, but there just isn't. We're seeing our guests, the booking window continues to extend.
Unknown Speaker: And that's not just happening at the, you know, the short product; that's happening in the ultra luxury space, as well. And I think brand, it's, it's, people say, well, how can that be? I think, I think it's still just the reality that, you know, there's still a 20% value gap between land-based vacations. And you get a lot of bang for the buck when you're traveling with our brands. And I think that value gap is, is, is potentially shielding us from some of that noise that you're hearing from land-based operators.
Speaker Change: So they're planning further out.
Speaker Change: Their willingness to pay more.
Speaker Change: for these incredible vacation experiences continues to increase, so our pricing continues to increase into 2025.
Speaker Change: and into 2026.
Speaker Change: Unknown Speaker And that's not just happening at the, you know, at the short, the short product that's happening in the ultra luxury space as well. And I think, Brandt, it's, you know, people say, well, how can that be? I think, I think it's still just the reality that
Unknown Speaker: But for us, you know, whether you look at it by product, whether you look at it by market, whether you look, well, whether it's a ticket or whether it's on board, the trends that we see are just continued acceleration on the pricing side. Now, there's some reality as well that we're managing to, which is, you know, you know, we're really well booked. And, you know, you're never at that optimal, are you too booked or underbooked, but, for us, we probably, because we have less inventory to sell in the back half of this year, a lot of that, that pricing opportunity is also going to fall into 2025. Thanks a lot.
Brandt Antoine Montour: There's still a 20% value gap to land-based vacation.
Jason Liberty: And you get a lot of bang for the buck when you're traveling with our brand. And I think that value gap is potentially shielding us from some of that noise that you're hearing from land-based operators. But for us, whether you look at it by product, whether you look at it by market, whether it's ticket or whether it's on board, the trends that we see are just continued acceleration on the pricing side. Now, there's some reality as well that we're managing to, which is, you know, we're really well booked. And you know, you're never at that optimal, or you two booked or under booked. But for us, we probably, because we have less inventory to sell in the back half of this year, a lot of that pricing opportunity is also going to fall into 2025.
Brandt Antoine Montour: And you get a lot of bang for the buck when you're when you're traveling with our
Brandt Antoine Montour: with our brands, and I think that value gap is potentially shielding us from some of that noise that you're hearing.
Speaker Change: from land based operators. But for us, whether you look at it by product, whether you look at it by market, whether you look while, whether it's ticket or whether it's onboard.
Brandt Antoine Montour: The trends that we see is just continued acceleration on the pricing side. Now, there's some reality as well that we're managing to, which is...
Speaker Change: We're really well booked, and you're never at that optimal, are you too booked or underbooked, but for us, because we have less inventory to sell in the back half of this year, a lot of that pricing opportunity is also going to fall into 2025.
Jason Liberty: Okay, thanks a lot.
Unknown Speaker: Great quarter. You got it. Thanks. Our next question comes from the line of Vince Ciepiel with Cleveland Research. Please go ahead.
Jason Liberty: Great quarter. You got it.
Operator: Thanks.
Conor Cunningham: Our next question comes from the line, Advanced CPU with Cleveland Research. Please go ahead. Thanks. So I guess it's kind of a question on strategy on a go-forward basis. And you touched on this in your opening comments. Just getting back from this Utopia inaugural, and from the moment you're boarding the ship to the naming ceremony, I mean, it's very clear that you're targeting this kind of getaway, biggest party at sea type of focus. So can you talk a little bit about how you make decisions with allocating new hardware towards this shorter sailing getaway as opposed to something more like a week-long vacation, family-oriented icon type experience.
Speaker Change: Okay, thanks a lot. Great quarter. You got it. Thanks, Brent.
Speaker Change: Our next question comes from the line of Vince Ciepiel of Cleveland Research. Please go ahead.
Unknown Speaker: Thanks. So I guess it's kind of a question of strategy on a go forward basis. And you touched on this in your opening comments. I was getting back from this Utopia Inaugural and from the moment you board the ship to the naming ceremony. I mean, it's very clear that you're targeting this kind of getaway, the biggest party at sea type of focus. So can you talk a little bit about how you make decisions with allocating new hardware towards this shorter sailing that's a getaway as opposed to something more like a week-long vacation, family-oriented icon type experience?
Vince Charles Ciepiel: Thanks so I guess it's kind of a question on strategy on a go-forward basis and you touched on this in your opening comments
She's getting back from this utopia inaugural and from the moment you're boarding the ship.
Vince Charles Ciepiel: at the naming ceremony. I mean, it's very clear that you're targeting this kind of.
Speaker Change: Getaway, Biggest Party at Sea type of focus so
Speaker Change: Can you talk a little bit about how you make decisions with allocating new hardware?
Speaker Change: towards this
Speaker Change: Shorter Sailing that's a getaway as opposed to something more like a week-long vacation, family-oriented, icon-type experience. And I imagine that the development of your private islands close to South Florida probably unlocks some of this, but what do you see as being a bigger driver in the years ahead?
Jason Liberty: And I imagine that the development of your private islands close to South Florida probably unlocks some of this. But what do you see as being a bigger driver in the years?
Unknown Speaker: And I imagine that the development of your private islands close to South Florida probably unlocks some of this, but what do you see as being a bigger driver in the years ahead? Well, it's a great question, and you kind of answered a lot of the questions in your question.
Jason Liberty: Well, it's a great question, and you kind of answer a lot of the question in your question. You know, for the Royal brand, we're very much a multi-generational family brand. We're fortunate that we've got the scale and the size we've seen over the past couple of years, that we've got growth in every single segment. And we know that the on-ramp for Cruise is the short product. We've known that for quite some time. We changed our strategy some years ago with the development of Perfect Air Coco K and significant investment in many of our ships that we move to the short cruise market.
Speaker Change: Well, it's a great question and you kind of answered a lot of the questions in your question.
Michael W. Bayley: You know, for the Royal brand, we're very much a, you know, multi-generational family brand. We were fortunate that we've got the scale and the size we've seen over the past couple of years, and we have growth in every single segment. And we know that the on ramp for cruise is the short product. We've known that for quite some time. We changed our strategy some years ago with the development of Perfect Day at Coco Cay and significant investment in many of our ships, so we moved to the short cruise market, and we started to really aggregate that segment of our business, and the volume of new-to-cruise is significantly higher on the short product than it is on the longer product for very logical reasons, which I think you touched on. It's just a much easier product to purchase. It takes only a few days.
Speaker Change: You know, for the Royal brand, we're very much a, you know, multi-generational family brand. We're fortunate that we've got the scale and the size we've seen.
Speaker Change: Over the past couple of years that we've got growth in every single segment and we know that the on-ramp for crews is the short product. We've known that for quite some time.
Speaker Change: We changed up our strategy some years ago with the development of Perfect Air, Coco Cay, and significant investment in many of our ships that we moved to the short cruise market.
Jason Liberty: And we started to really aggregate that segment of our business, and the volume of new to cruise is significantly higher on short product than it is on longer product for very logical reasons, which I think you touched on. It's just a much easier product to purchase. It's only a few days. It's less investment of time for new to cruise. And we found that when you get the product right, you can stimulate a large amount of demand. And I think what we've seen with Utopia is it was a very strategic decision to take a brand new Oasis class that we started to work on some years ago in terms of the product vibe, the energy, what we're offering the customer.
Speaker Change: And we started to really aggregate that segment of our business and the volume of New to Cruise is significantly higher on short product than it is on longer product for very logical reasons which I think you touched on. It's just a much easier product to purchase. It's only a few days. It's less investment of time for New to Cruise.
Michael W. Bayley: It's a smaller investment of time for new-to-cruise, and we found that when you get the product right, you can stimulate a large amount of demand, and I think what we've seen with Utopia is it was a very strategic decision to take a brand new Oasis class that we started to work on some years ago in terms of the product vibe, the energy, what we're offering the customer, and placing it It's a great product to put up against what we see in Orlando, and it's easy to package a trip to Utopia as well as, maybe, a trip to Orlando.
Speaker Change: And we found that when you get the product right, you can stimulate a large amount of demand. And I think what we've seen with Utopia is it was a very strategic decision to take a brand new Oasis class that we started to work on some years ago in terms of the product vibe, the energy, what we're offering the customer.
Jason Liberty: And placing it into really the Port Canaveral Orlando market drive to market, which is significant. It's a great product to put up against what we see in Orlando. And it's easy to package, you know, a trip on Utopia as well as maybe a trip to Orlando. So, certainly we've seen that demand has been outstanding for that product, and where we're only in the second week of Utopia, and it is literally knocking it out of the park, exceptionally high customer satisfaction that promoters scores, the onboard revenues being just very strong with very pleased for the onboard revenue, and guests are booking it.
Speaker Change: and placing it into really the port Canaveral Orlando market drive to market which is significant, it's a great product to put up against what we see in Orlando and it is easy to package a trip on Utopia as well as maybe a trip to Orlando.
Michael W. Bayley: But certainly, we've seen the demand for that product has been outstanding, and we're only in the second week of Utopia, and it is literally knocking it out of the park. Exceptionally high customer satisfaction, net promoter scores, the onboard revenue has been just... very strong, with guests very pleased with the onboard revenue, and guests are booking it. We know that if we get that product right and we can put our best foot forward, then we'll see a significant upswing in repeat business because of what they've experienced with Utopia, and certainly, when you think of Icon in the seven-day market and soon to be Star of the Seas, which is also going to Port Canaveral down into perfect day, we've got a really good, strong range of products that we Just as a sideline headline, Icon is now currently sailing at around 132% load factor, which we're just delighted with very high customer satisfaction.
Speaker Change: But certainly we've seen the demand has been outstanding for that product and we're only in the second week of Utopia and it is literally knocking it out of the park. Exceptionally high customer satisfaction, net promoter scores, the onboard revenue has been just phenomenal.
Jason Liberty: So, we know that if we get that product right and we can put our best foot forward, that then we'll see a significant upswing in repeat to brand because of what they've experienced with Utopia. And certainly when you think of icon in the seven day market and soon to be star of the seas, which is also going to port Canaveral down into Perfect Day, we've got a really good strong range of products that we can offer the customer and they're booking it. Just as the sideline headline icon now is currently sailing at around 132% load factor, which is we're just delighted with very high customer satisfaction.
Speaker Change: Very strong with very pleased for the on-board revenue and guests are booking it. So
Speaker Change: We know that if we get that product right, and we can put our best foot forward, that then we'll see a significant upswing in repeat-to-brand.
Douglas Goldstein: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried by National Financial Services LLC. Member NYSE & SIPC, a Fidelity Investments company. His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered at www.profile-financial.com. All information on this website is purely information and should not be used as the sole basis for making financial decisions. The opinions rendered herein are those of the guests, and not necessarily those of Douglas Goldstein, Profile Investment Services, Ltd., or Israel National News.
Speaker Change: When you think of Icon in the seven-day market and soon to be Star of the Seas, which is also going to Port Canaveral down into perfect day, we've got a really good, strong range of products that we can offer the customer, and they're booking it. Just as a sideline headline,
Speaker Change: Icon now is currently sailing at around 132% load factor, which is, we're just delighted with very high customer satisfaction.
Jason Liberty: Yeah, and I think just to add because I think Utopia is just a great example of our intentionality. I mean, each of our brands are hyper focused on understanding the different segments, the consumer of today and the consumer of tomorrow. And growing demand and our commentary around what's happening with the younger generation, and half of our guests are now kind of in that category, though I consider myself young, but I'm not in that category. But it's, you know, I was trying to address these multiple generations, these multiple experiences that people are looking to collect and trying hard to meet our guests there.
Unknown Speaker: Yeah, and, and, and I think just to add, because I think utopia is just a great example of our intentionality. I mean, you know, each of our brands is hyper focused on understanding the different segments, the consumer of today and the consumer of tomorrow, and growing demand and our commentary around what's happening, you know, with the younger generation. And, you know, half of our guests are now. I'm kind of in that category, though I consider myself young, but I'm not in that category.
Speaker Change: Yeah, and Vince, I think just to add, because I think Utopia is just a great example.
Speaker Change: of our intentionality. I mean, you know, each of our brands are hyper focused on
Vince Charles Ciepiel: Understanding the different segments, the consumer of today and the consumer of tomorrow.
Speaker Change: Unknown Speaker And growing demand and our commentary.
Speaker Change: around what's happening with the younger generation. And half of our guests are now kind of in that category.
Unknown Speaker: But, but, but, it's, you know, us trying to address these multiple, multiple generations, these multiple experiences that people are looking to collect, and try and try hard to meet our guests there. And I think, you know, you can see that whether you're looking at utopia with the short, whether you're seeing that with icon on seven, but you see that in celebrity, you see that with Silver Sea. And our goal is to really make sure we have an experience that matches the guests' different points in life. And that goes to our overarching strategy of having a lifetime of vacations. Got it. That's helpful.
Speaker Change: Unknown Speaker Though I consider myself young, but I'm not in that category, I guess. But it's us trying to address these multiple generations, these...
Speaker Change: Multiple Experiences that people are looking to collect and trying hard to meet our guests there.
Jason Liberty: And I think, you know, you can see that whether you're looking at Utopia with the short on whether you're seeing that with Icon on seven, but you see that in celebrity, you see that was Silver Sea. And our goal is to really make sure we have an experience that matches with the guests at different points in life. And that goes to our overarching strategy of having a lifetime of occasion. and Matt.
Speaker Change: You know, you can see that whether you're looking at Utopia with the short.
Speaker Change: whether you're seeing that with Icon on 7. But you see that in Celebrity, you see that with Silver Sea. And our goal is to really make sure we have an experience that matches with the guests at different points in life. And that goes to our overarching strategy of having a lifetime of vacations. Transcribed by https://otter.ai
Unknown Speaker: So the Michael Bayley's and the Millennials of the world like you, [inaudible] Question on 2025 yield setup. I think you got into this a little bit when asked for this on 4Q like for like, but when you think about next year, you have Another half year of Utopia, you have Star coming, you have Excel at the tail end, you have Royal Beach Club. There seems to be a number of drivers incremental to the like-for-like that could be supportive of yield growth.
Speaker Change: Got it, that's helpful. So the Michael Bayleys and the Millennials of the world, like Utopia it sounds like.
Speaker Change: Question on 21st
Speaker Change: Question on 2025 yield set up.
Speaker Change: I think you got into this a little bit when asked for this on 4Q, like for like, but...
Speaker Change: When you think about next year, you have, you know, another half year of Utopia, you have S.T.A.R. coming, you have Excel at the tail end, you have...
Speaker Change: Beach Club. Like, there seems to be a number of...
Speaker Change: drivers incremental to the like for like that could be supportive of yield growth.
Unknown Speaker: And then you also mentioned that the denominator is much larger now. So do you expect these other factors to be yield accretive next year and additional like-for-like, or is like-for-like still the larger driver? How should we be?
Speaker Change: And then you also mentioned that the denominator is much larger now, so do you expect these other factors to be yield of creative next year in addition to like-for-like, or like-for-like is still the larger driver? How should we be thinking about that?
Unknown Speaker: Yeah, well, I think when you certainly have a full year of utopia, a full year or half a year star will definitely be something that I would point to, that will contribute to our yield improvement next year, as well as, like for like, Excel is at the very, very end of the year and the Royal Beach Club will be towards the back half of the year, and that will ramp itself up as we typically do to make sure it's operationally And so I think those are things I think Excel and the Royal Beach Club will probably be more of a driver in 2026 than they will be in 2025.
Speaker Change: Yeah, well, I think when you certainly full year of utopia, a full year or half a year star will definitely be something that I would point to.
Speaker Change: That will contribute to our yield improvement next year as well as like for like. Excel is at the very, very end of the year and the Royal Beach Club will be towards the back half of the year and that will ramp itself up as we typically do to make sure it's operationally perfect.
Speaker Change: I think Excel and the Royal Beach Club will probably be more of a driver in 2026 than it will be in 2025.
Unknown Speaker: But certainly, that new capacity benefits us, and what we're seeing in the like for like pricing is that we expect that to be a meaningful contributor to our yields in 2025. As well as, by the way, on-board spend activity. Great. Thanks. Our next question comes from the line of Matt Boss with J.P. Morgan. Please go ahead.
Speaker Change: But certainly that new capacity benefits us, and what we're seeing in the like-for-like pricing is that we expect that to be a meaningful contributor to our yields in 2025.
As well as, by the way, on-board spend activity.
Great, thanks.
Our next question comes from the line of Matt Boss with J.P. Morgan. Please go ahead.
Unknown Speaker: Great thanks and congratulations on another great quarter. So Jason, with all your trifecta targets hit, you cited today that you're just getting, So maybe could you elaborate on what that means in terms of global market share based on new customer trends that you and then Naftali, maybe just the multi-year margin option. The Dumb Margins exit this year, $200 to $300 billion, above 29. Where do you see us going? Unknown Speaker Well, I think the comment on just getting started is just getting started, and you're all very familiar with this, but when we've talked about trifecta, and even internally, we talked about it as base camp.
Great, thanks and congrats on another great quarter. Thanks, Matt.
Matthew Robert Boss: So, Jason, with all your trifecta targets hit, you cited today that you're just getting started. So maybe could you elaborate on what that means in terms of global market share based on new customer trends that you're seeing today? And then, Naftali, maybe just the multi-year margin opportunity, EBITDA margins exit this year, 200 to 300 basis points above 2019. Where do you see us going from here?
Ciao.
Well, I think, so the comment on the just getting started, and you're all very familiar with this, but when we've talked about Trifecta...
Unknown Speaker: You know, we've hit it, we've announced we're hitting it, but you won't see anybody here doing victory laps, you know, it's getting our business, we're now back to full strength, full financial health. And, you know, if you just take what we've talked about with our formula of moderate yield growth, cost discipline, and discipline and the growth of our business, but it drives a significant margin of returns for the business, you combine that with, you know, the, the, the, plan-based things like the Royal Beach Club in the Bahamas and the Royal Beach Club in Mexico.
Speaker Change: Unknown Speaker And even internally, we've talked about it as Basecamp. You know, so we've hit it, we've announced we're hitting it, but you won't see anybody here doing victory laps. You know, it's getting our business, we're now back to full strength, full financial health.
Unknown Speaker And if you just take what we've talked about with our formula of moderate yield growth, cost discipline, discipline in the growth of our business, it drives significant margin in returns for the business. You combine that with the...
land-based things like the Royal Beach Club in the Bahamas, the Royal Beach Club.
Unknown Speaker: You see the power of the earnings and the returns that are going to come forward here in the business. I think when we look at what's next, it's now setting ourselves on how do we make sure we execute on those significant margin drivers. If you think about just in 2024, a 1% change in our yields is $120 million; 1% change in our cost is about half of that.
In Mexico.
Unknown Speaker: You see the power of the earnings and the returns that are going to come forward.
Speaker Change: I'm here in the business. I think when we look at like, like what's what's next, it's now setting ourselves on how do we make sure we execute on on those significant margin drivers. If you think about just in 2024, a 1% change in our yields is $120 million.
Unknown Speaker: If you're continuing to grow your yields faster than you're growing your costs or significantly faster than you're growing your costs, that's going to deliver a lot of margin and return. The other point that I would add is that what we are chasing are cruise competitors.
One percent change in our cost is about half of that. So if you're continuing to grow your yields faster than you're growing your cost, or significantly faster than you're growing your cost, that's going to deliver a lot of margin and return.
The other point that I would add is that when we what are we chasing like we're like we're again. We're not chasing
Unknown Speaker: What we're chasing is how do we grab more and more share from that $ 1.9 trillion and growing vacation market. And I think with things like Icon and Utopia and Nova and Excel, et cetera, and the private destinations, what we're doing is trying to further differentiate ourselves and reel in more of those land-based consumers and make sure that we are a clear consideration in that vacation choice. And if we do that really well, that's where we can further close the gap on land-based vacations.
are cruise competitors. What we're chasing is how do we grab more and more share from that 1.9 trillion and growing vacation market.
Speaker Change: And I think with things like Icon and Utopia and Nova and Excel, et cetera, and the private destinations, what we're doing is trying to further differentiate ourselves and reel in more of those land-based consumers and to make sure that we are a clear consideration in that vacation choice.
Unknown Speaker: And that will, you know, because there's so much operating leverage in this business, you know, that's going to drive significant earnings power and returns to our shareholders. And Matt, I guess the one on your question about the margin. We're very happy with the way we've obviously executed in the last two years, and you can see our margins are much higher than 2019.
And if we do that really well, that's where we can further close the gap to land-based vacation. And that will, you know, because there's so much operating leverage in this business, you know, that's going to drive significant earnings power and returns to our shareholders.
Naftali Holtz: I guess the question on the margin. So we're very happy with the way we've obviously executed in the last two years, and you can see our margins much higher than 2019. And this was because we were focused on our formula and kind of continuing to have profitable growth. That doesn't change going forward. So, as we think about new ships, new experiences, new initiatives, we want to continue to grow the revenue. That's obviously a great opportunity, Jason said, 65 billion dollar category, 1.9 trillion dollar market. We see this as an amazing opportunity to win share from the consumer and continue to grow the business and expand it.
and Matt I guess the one on your question on the margin so we're very happy with with the way we've obviously executed in the last two years and you can see our margins
Unknown Speaker: And this was because we were focused on our formula and kind of continuing to have profitable growth that doesn't change going forward. So as we think about new ships, new experiences, new initiatives, we want to continue to grow revenue. That's obviously a great opportunity, as Jason said, $65 billion category, $1.9 trillion market. We see this as an amazing opportunity to win share from the consumer and continue to grow the business and expand it. And while doing that with higher margins, and I'll go back to what Jason said, 1% of net revenue yield is $120 million; 1% of NCCX is $60 million.
Higher than 2019. This is because we were focused on our formula and continuing to have profitable growth. That doesn't change going forward. So, as we think about new ships, new experiences, new initiatives,
We want to continue to grow the revenue. That's obviously a great opportunity, as Jason said. $65 billion category, $1.9 trillion market. We see this as an amazing opportunity to win share from the consumer and continue to grow the business and expand it, and while doing that, with higher margins. And I'll go back to what Jason said. 1% of net revenue yield is $120 million. 1% of NCCX is $60 million. So you can see that if we continue on this formula and continue to grow the business, there's much more runway on the margin itself.
Naftali Holtz: And while doing that with higher margins, I'll go back to $120 million. One percent of NCCX is $16 million. So you can see that if we continue on this formula and continue to grow the business, there's much more runway on the margin itself that also creates a lot of free cash flow, right? Where a much bigger company today. So that will just expand our opportunities for capital allocation as well. Great.
Creates a lot of free cash flow, right? We're a much bigger company today So that will just expand our opportunities for capital allocation as well
Conor Cunningham: That's the luck. Our next question comes from the line of Connor Cunningham with the earliest research. Please go ahead. Hi, everyone. Thank you. Maybe just to stick on that return answer that you had.
Unknown Speaker: So you can see that if we continue with this formula and continue to grow the business, there's much more runway on the margin itself, which also creates a lot of free cash flow. Right. We're a much bigger company today. So that will just expand our opportunities for capital allocation as well. Our next question comes from the line of Conor Cunningham with Melius Research. Please go ahead. Hi, everyone.
Great. Best of luck.
Our next question comes from the line of Conor Cunningham with Melius Research. Please go ahead.
Unknown Speaker: Thank you. Maybe just to stick on that, on that, of Shareholder Returns. Just curious as to how you think about that and how that steps up. Is it just a function of time?
Hi, everyone. Thank you. Maybe just to stick on that return answer that you had, you know, obviously, it's great to see the dividends back. But as you think about additional, as the board thinks about additional avenues of shareholder returns, just
Naftali Holtz: You know, obviously it's great to use the dividends back, but as you think about additional, as the board thinks about additional avenues, and share all the returns, just curious like how you think about that and how that steps up from here. Is it just a function of time, or are you targeting additional balance sheet optimization before you start to think about maybe share of purchases and so on? Thank you. Sure. Well, thanks, Connor. And of course, you know, these things are always you board, you know, board decisions. I think I think the dividend really reflects that now we have gotten ourselves into our, our balance sheets.
Unknown Speaker: Or are you targeting an additional balance sheet? About maybe a share of purchases and so on. Thank you. Yeah, sure. Well, thanks, Conor.
I'm curious how you think about that and how that steps up from here. Is it just a function of time or are you targeting additional balance sheet optimization?
Unknown Speaker: And of course, you know, these things are always your board's decisions. I think the dividend really reflects that now we have gotten ourselves into our balance sheet zone, our credit metric zone that we have been focused on doing. And I think that, you know, historically, we've used both dividends and other forms, like share repurchasing, to return capital to shareholders.
before he's
Start to think about maybe share of purchases.
and so on. Thank you.
Yeah, sure. Well, thanks, Conor. And of course, you know, these things are always your board, you know, board decisions.
I think the dividend really reflects that now we have gotten ourselves into
Naftali Holtz: You know, our credit metric zone that we have been focused on doing, and I think that, you know, historically we've used both the dividend and other forms I share repurchasing to return capital shareholders. And I would suspect that we would kind of, you know, be focused on both of those things and growing both of those things over time. So I think the dividend and and and you know, the amount of the dividend that is a reflection of can keeping ourselves in that, you know, three and a quarter to three and a half times, you know, get to eat the zone.
Our balance sheet zone our credit metric zone that we have been focused on on doing and I think that You know historically we've used both the dividend and other forms. I share repurchasing To return capital to shareholders and I I would suspect that we would kind of you know Be focus on both of those things and growing both of those things over time
Unknown Speaker: And I would suspect that we would kind of be focused on both of those things and growing both of those things over time. So I think the dividend and and and, you know, the amount of the dividend, I think, is a reflection of whether we can keep ourselves in that, you know, three and a quarter to three and a half times, debt to EBITDA zone. We've reached out on the three and a half side.
So, I think the dividend and, you know, the amount of the dividend, I think, is a reflection of, again, keeping ourselves in that, you know, three and a quarter to three and a half times, you know, debt to EBITDA zone.
Naftali Holtz: We've reached that on the three-and-a-half side, but our ultimate goal is to make sure we have a competitive dividend and an opportunistically, you know, buy back shares over time. And I'll just add that our balance sheet is obviously in the zone where we, where we, you know, this is within the target. There's always opportunities, right? So we obviously, the first and foremost managed maturitys. We want to reduce continued to reduce the cost of capital. We still are not done with unsecured in our balance sheet. So we have some work to do, but we're definitely in a very strong balance sheet position that allows us to reinstate the dividends and just continue to grow the business.
Unknown Speaker: But our ultimate goal is to make sure we have a competitive dividend and opportunistically buy back shares over time. And I'll just add that our balance sheet is obviously in the zone where we, you know, this is within the target. There's always opportunities, right?
We've reached out on the three-and-a-half side, but our ultimate goal is to make sure we have a competitive dividend and opportunistically buy back shares over time.
Unknown Speaker: So obviously, the first and foremost managed maturities, we want to continue to reduce the cost of capital, we still are not done with unsecuring our balance sheet. So we have some work to do. But we're definitely in a very strong balance sheet position that allows us to reinstate the dividends and just continue to grow the business. Yeah, that's helpful. And then sorry to ask about 2025 again, but you know, what is your yield? It just seems like there is.
And I'll just add that our balance sheet is obviously in the zone where we...
Unknown Speaker This is within the target. There's always opportunities, right? So we obviously, the first and foremost, manage maturities. We want to reduce, continue to reduce the cost of capital.
We still are not done with unsecuring our balance sheet. So we have some work to do, but we're definitely in a very strong balance sheet position that allows us to reinstate the dividends and just continue to grow the business.
Naftali Holtz: Yeah, that's, that's awful.
Conor Cunningham: And then, sorry, they asked that the 2025. Booking commons again.
That's helpful. And then sorry to ask the 2025 booking comment again, but you know, how does your yield management strategy
Naftali Holtz: But, you know, how does your yield management strategy change next year, Holtz into this area? It just seems like there's additional opportunity to optimize that you didn't necessarily have to do. Or maybe to ask it all differently. Did you feel like you left anything on the table, giving your booking curve? This year wasn't what you were expecting to be next year as you approached that. Thank you. Yes, sure. So I think that you could see that obviously in the guide we had in the beginning of the year to where we are today, right? We're about 400, 400 plus basis points higher than we were in our expectations in the beginning of the year.
Unknown Speaker: Additional opportunity to optimize something that you didn't necessarily have to, or maybe to ask it a little differently. Did you feel like you left anything out? Curve.
It just seems like there's additional opportunity to optimize that you didn't necessarily have this year. Or maybe to ask it a little differently, did you feel like you left anything on the table given your booking curve this year wasn't what you would expect for it to be next year?
Unknown Speaker: This year wasn't what wasn't what you're expecting, as you approach that. Thank you. Yeah, sure. So I think that you could see that obviously in the guide we had at the beginning of the year to where we are today, right? We're about 400, 400 plus basis points higher than we were in our expectations at the beginning of the year. So you know that that's a reflection of an acceleration in demand and really an acceleration in price. So your takeaway from that is clearly we left some money on the table, and we were too booked going into the second wave.
here.
as you approach that. Thank you.
Yeah, sure. So I think that you could see that obviously in the guide we had in the beginning of the year to where we are today, right? We're about 400 plus basis points higher than we were.
Naftali Holtz: So, you know, that's a reflection of an acceleration in the man and really acceleration in price. So, your takeaway from that is clearly we left some money on the table, and we were too booked going into Wave. Now, how we decided to take on those revenues is, you know, we have a very sophisticated revenue management system, a very sophisticated management team that is looking at historical trends. What's happening in the market to inform, you know, price and how much we take on and when. And, and so I think for us, you know, it's always a debate on, and again, this is always by plus or minus, you know, 5 percentage points.
and our expectations in the beginning of the year.
So, you know, that that's a reflection of an acceleration.
and Demand and really acceleration and price.
Unknown Speaker So, you know, your takeaway from that is clearly we left some money on the table and we were too booked going into WAVE. Now, you know, how we decided to take on those revenues is, you know, we have a very sophisticated revenue management system, a very sophisticated...
Unknown Speaker: Now that you know, how we decided to take on those revenues is, you know, we have a very sophisticated revenue management system, a very sophisticated management team that is, you know, looking at historical trends, what's happening in the market, to inform your price and how much we take on and when. And so I think for us, you know, it's always a debate on, on. And again, this is probably plus or minus, you know, five percentage points, in terms of where our book position should be as we cross different periods.
Management Team that is looking at historical trends, what's happening in the market.
to inform your price and how much we take on and when.
Unknown Speaker And so I think for us, you know, it's always a debate on.
Unknown Speaker And again, this is always probably plus or minus five percentage points.
Naftali Holtz: And some of the where our book position should be as we cross different periods. And, of course, our ultimate goal here is not to, you know, say that we're record this or record that; our ultimate goal here is to optimize our revenue. And that's what our tools do each and every day. And, you know, it could very well be that we cross a year. And the same type of book position or a little bit less or a little bit more. And that's just to make sure that we are, again, maximizing and optimizing our revenue. Appreciate it.
Unknown Speaker: And of course, our ultimate goal here is not to, you know, say that we're recording this or recording that our ultimate goal here is to optimize our revenue. And that's what our tools do each and every day.
Unknown Speaker In terms of where our book position should be as we cross different periods. And of course, our ultimate goal here is not to say that we're record this or record that our ultimate goal here is to optimize our revenue.
and that's what our tools do each and every day, and it could very well be that we cross a year in the same type of book position or a little bit less or a little bit more, and that's just to make sure that we are, again, maximizing and optimizing our revenue.
Unknown Speaker: And you know, it could very well be that we cross the year in the same type of book position, or a little bit less or a little bit more. And that's just to make sure that we are again maximizing and optimizing our revenue. I appreciate it.
Naftali Holtz: Thank you. Sure.
Robin Farley: Our next question comes from the line of Robin Barley with EBS. Please go ahead. Great. Thank you. So you will be a looks like a great new ship.
Unknown Speaker: Thank you. Our next question comes from the line of Robin Farley with EBS. Please go ahead.
Appreciate it, thank you. Sure.
Our next question comes from the line of Robin Farley with EBS. Please go ahead.
Unknown Speaker: Great, thank you. Utopia looks like a great new ship, so don't mind that I'd like to ask about your next potential ship order. It's kind of a two-part question.
Great, thank you. So, Utopia looks like a great new ship, so don't mind that I'd like to ask about your next potential ship order.
Robin Farley: But so don't mind that I'd like to ask about your next potential chip order. It's kind of a two-part question. Well, the first is some other Chris had to be an ordering sort of further out than we've seen before the pandemic, you know, some eight or nine years, some 12 years. Are you sort of having to think longer term about your order book than maybe you would have previously. That's when you feel that you will also have to do what we may see you do.
It's kind of a two-part question. First, some other cruise lines have been ordering sort of further out than we'd seen before the pandemic, you know, some eight or nine years, some 12 years. Are you sort of having to think longer term about your order book than maybe you would have previously? Is that something you feel that...
Unknown Speaker: First, some other cruise lines have been ordering sort of further out than we'd seen before the pandemic, you know, some eight or nine years, some twelve years. Are you sort of having to think longer term about your order book than maybe you would have previously? Is that something you feel that you'll also have to do, or that we may see you do? And then secondly, it seems like there's kind of unofficial talk about a new ship class for me that would be smaller than the last two ship classes that you've had and that may allow you to go to some markets that can't handle some of the sort of newer, larger ships today. And I wonder if you can help quantify things for us?
You'll also have to do what we may see you do. And then secondly,
Robin Farley: And then, secondly, it seems like there's an unofficially talk about a new ship class for me that would be smaller than the last two ship classes that you've had. And that may allow you to go to some markets that it can't handle, some of the sort of newer, larger ships today. And I wonder if you can help quantify for us. What percent of the drive and market now right because they're clearly markets like Miami, New York where you have a big drive and market. But these other potential new port cities that you're not going to with some of the new hardware that would be new drives, you know, market penetration.
It seems like there's kind of unofficially talk about a new ship class for me that would be smaller than than you know your the last few ship classes that you've had and that may allow you to go to some markets that
I can't handle some of the sort of newer larger ships today, and I wonder if you can help quantify for us.
Unknown Speaker: What percent of the drive-in market now, right, because there are clearly markets like Miami, New York, where you have a big drive-in market, but these other potential new port cities that you're not going to with some of your new hardware that would be new drive, you know, kind of new source markets that are within a drive, can you quantify kind of what percent increase that could be in your drive market penetration if, you know, thinking about what those smaller ships may reach? I realize this is a longer term question, but thanks. Hey, Robin.
What percent of the drive-in market now, right, because there are clearly markets like Miami, New York, where you have a big drive-in market, but these other...
potential new port cities that you're not going to with some of the new hardware that would be new drives, you know, all kinds of new source markets that are within a drive.
Can you quantify kind of what percent increase that could be in your drive market penetration if you're thinking about what those smaller ships may reach? I realize this is a longer term question, but thanks.
Robin Farley: If you know, thinking about what those smaller ships may reach, I realize this is a longer term question, but thanks.
Jason Liberty: Hey Robin, good things for the question.
Unknown Speaker: Thanks for the question. First, we feel we have a very good line of sight on our order book. And, you know, it's all subscribed to being disciplined in the growth of our business. And, of course, as we're adding capacity to our fleet, just always keep in mind that, you know, like, as you're seeing with Utopia and ICON, or you're seeing with Silver Ray, etc., they're going into different segments and different markets and different deployments each and every day.
Jason Liberty: So first, we feel we have a very good line of sight on our order book, and it's all subscribed to being disciplined in the growth of our business. And of course, as we're adding capacity into our fleet, just always remind that as you're seeing with Utopia and Icon, where you're seeing with Silver Ray, et cetera, they're going to different segments and different markets and different deployments each and every day. So, of course, in a cruise ship business or in the cruise business, you're always thinking longer term. You're not just thinking longer term in terms of growth and orders, but also your environmental footprint and what we can be doing to further reduce our emissions and the fuel that we burn, et cetera.
Hey Robin, thanks for the question. So first, we feel we have a very good line of sight.
Unknown Speaker on our order book. And, you know, it's all subscribed to being disciplined.
and the growth of our business. And of course, as we're adding capacity into our fleet, just always remind that like as you're seeing with utopian icon or you're seeing with the silver ray, et cetera, as you know, these they're going into different segments and different markets and different deployments.
Unknown Speaker: So, you know, of course, in the cruise ship business or in the cruise business, you're always thinking longer term. You don't just think longer term in terms of growth and orders but also your environmental footprint and what we can be doing to further reduce our emissions and the fuel that we burn, etc. So this is a longer-term business. And, you know, designs of ships like ICON, which you heard us talk about, were seven years in the making. So this just doesn't happen, you know, a couple years out.
Unknown Speaker each and every day. So, you know, of course, in the cruise ship business or in the cruise business, you're always thinking longer term, you're not just thinking longer term in terms of growth.
Unknown Attendee, but also your environmental footprint and what we can be doing.
Jason Liberty: So, this is a longer term business and designs of ships like Icon, which you heard us talk about with seven years in the making. So, this just doesn't happen a couple of years out. So, I think we feel very confident about our path of growth, and we feel very confident in our ability to take on those orders in a very disciplined way. We're always going through, and we're always designing the next classes of ships really for all of our brands. We specifically pick segments and brands in those segments and deployments and experiences that we believe have a very long runway to generate demand globally as each of our brands are a globally sourced business.
to further reduce our emissions and the fuel that we burn, etc. So this is a longer term business and, you know, designs of ships like ICON, which you heard us talk about.
Unknown Speaker: So I think we feel very confident about our path of growth. And we feel very confident in our ability to, you know, take on those orders in a very disciplined way. We're always going through and looking, you know; we're always designing the next classes of ships for all of our brands. We specifically pick segments and brands in those segments, and deployments and experiences that we believe have a very long runway to generate demand globally, as each of our brands is a globally sourced business.
It was seven years in the making, so this just doesn't happen, you know, a couple years out.
So I think we feel very confident about our path of growth.
And we feel very confident in our ability.
to take on those orders in a very disciplined way.
We're always going through and we're always designing the next classes of ships really for all of our brands. We specifically pick segments.
and Brandt in those segments and deployments and experiences that we believe have a very long runway to generate demand globally.
Unknown Speaker: And of course, the other thing I think that's important when you think about ship classes, whether they're, you know, could be smaller, they could be larger, it's also a consideration that we also have ships that are reaching 30-35 years old. And so some of this is not just about what we want to build, you know, same-sized ships, smaller ships; it's also replacing ships that will eventually kind of reach their end of life.
As each of our brands are a globally sourced business.
Jason Liberty: And of course, the other thing I think that's important when you think about ship classes, whether they're, you know, could be smaller, they could be larger. It's kind of also consideration that we also have ships that are reaching 30, 35 years. And so, some of this is not just about what we want to build; you know, same size ships, smaller ships. It's also replacing ships that will eventually kind of reach their end of life. And I think when your question comes about the drivable market, you know, the ships that you're referring to that we're looking potentially at smaller ships will probably replace some of those older ships.
And of course, the other thing I think that's important when you think about ship class is whether they're, you know, could be smaller, they could be larger.
It's kind of also consideration that we also have ships that are reaching 30, 35 years. And so some of this is not just about, oh, we want to build, you know, same size ships, smaller ships. It's also replacing ships that will eventually kind of reach their end of life.
Unknown Speaker And I think when your question comes about the drivable market, you know, the ships that you're referring to that we're looking potentially at smaller ships will probably replace.
Unknown Speaker: And I think when your question comes about the drivable market, the ships that you're referring to that we're looking potentially at smaller ships will probably replace some of those older ships. It's a little bit less about the sourcing market, it's more about where those ships can go, getting them into maybe some of the more unique and bespoke destinations and further diversifying our footprint around the world.
Jason Liberty: It's a little bit less about the sourcing market. It's more about where those ships can go. It's, you know, getting them into maybe some of the more unique and bespoke destinations. And further diversify our footprint around the world. You know, we go to about a thousand different destinations today, and we keep more and more trying to spread out where our guests go. And size of ship can sometimes matter. And I think our brands are always designing to how do we have the most flexible platform to deliver the experiences in which our guests are looking to go on.
Some of those older ships. It's a little bit less about the sourcing market. It's more about where those ships can go It's you know getting them into maybe some of the more unique and bespoke destinations
Unknown Speaker: You know, we go to about 1000 different destinations today, and we keep trying more and more to spread out where our guests go. And the size of the ship can sometimes matter.
and further diversify our footprint.
around the world. You know, we go to about a thousand different destinations today.
and we keep more and more trying to spread out where our guests go in.
And size of ship can sometimes matter, and I think our brands are always designing to how do we have the most flexible platform to deliver the experiences in which our guests are looking to go on.
Unknown Speaker: And I think our brands are always designing to find how we have the most flexible platform to deliver the experiences that our guests are looking to go on. Great, thanks very much. Great. One more question, please. Our final question will come from the line of Ben Chaiken with Mizzou Ho.
Jason Liberty: Great.
Jason Liberty: Thanks very much.
Jason Liberty: Great.
Benjamin Chaiken: One more question, please. Our final question will come from the line of Ben shaking.
Great, thanks very much.
Great. One more question, please. Our final question will come from the line of Ben Chaiken with Mizzou Ho. Please go ahead.
Michael Bayley: Let's move, Ho. Please go ahead. Hi, good morning. With Paradise Island, how are you positioning this relative to Coco K? And is this a different customer or similar, meaning are your future Paradise Island guests going to Coco K today, or is it a different itinerary?
Unknown Speaker: Please go ahead. Hey, good morning. With Paradise Island, how are you positioning this relative to CoCoK, and is this a different customer or similar, meaning are your future Paradise Island guests going to CoCoK today, or is it a different itinerary and then? Hi Ben, it's Michael.
Hey, good morning. With Paradise Island, how are you positioning this relative to CoCoK? And is this a different customer or similar? Meaning, are your future Paradise Island guests going to CoCoK today? Or is it a different itinerary and then a quick follow-up? Thanks.
Michael Bayley: And then hi, Ben.
Michael W. Bayley: Yeah, it's positioned as another incredible experience. It's a beach club experience. It's exactly what our customers are looking for when they go to the Caribbean. They are seeking an experience on the beach.
Michael Bayley: It's Michael. Yeah, it's positioned as another incredible experience. It's a beach club experience. It's exactly what our customers are looking for when they go to the Caribbean. They're seeking an experience from the beach. So it's a Royal Caribbean Beach Club. It'll fit very well into perfect day, particularly for the short product market. You can spend a day in perfect Day. And then the next day you can spend a day in the beach club. So it's kind of like really totally perfect. And we think we're going to see very strong demand for the product. We've deployed; we've got our itinerary set for the beach clubs as they come online.
Michael W. Bayley: So it's a Royal Caribbean beach club. It'll fit very well into perfect day, particularly for the short product market. You can spend a day in perfect day and then the next day you can spend a day in the beach club. So it's kind of like really totally perfect. And we think we're going to see very strong demand for the product.
Michael W. Bayley: We've deployed, we've got our itinerary set for the beach clubs as they come online. And it'll be a combination of short product, including perfect day, longer product that may call into the beach club as it goes into Nassau and often, more often than not, including perfect day as well. So it's really a very complementary product that fits extremely well with perfect day. And it also fits very well into short and long sleeves.
And we think we're going to see very strong demand for the product.
We've deployed, we've got our itinerary set for the beach clubs as they come online and it'll be a combination of short product including Perfect Day, longer product that may call into the beach club as it goes into Nassau.
Michael Bayley: And it'll be a combination of short product, including Perfect Day, longer product that may call into the beach club as it goes into NASA. And often more often, more often than not, including perfect day as well. So it's really a very complimentary product that fits extremely well with Perfect Day. And it'll be great. It also fits very well into short and long product. So it's, we think it's going to be a really a huge success. And the demographics are exactly the same as the perfect day and exactly the same for the brand. I'm very helpful.
and more often than not, including Perfect Day as well. So it's really a very complementary product that fits extremely well with Perfect Day and it also fits very well into short and long product.
Unknown Speaker: So it's, we think it's going to be a really huge success. And the demographics are exactly the same as the perfect day and exactly the same for the brand. As you think about ticketing versus ancillary spend, how do you imagine Paradise would be different than Cook OK? In terms of span, we think it's going to be very similar.
So it's we think it's going to be a really a huge success and the demographics are exactly the same as the perfect day And exactly the same for the brand
Michael Bayley: And then as you, as you think about, I think versus antlers, and you imagine how do you imagine parallelism be different than cookie or similar. In terms of span, we think it's going to be very similar. There's some differences because the Beach Club is a full purchase experience. It's where it's a perfect day. There's a huge amount of the experiences complimentary. And then there's many elements of the experience that you purchase because we, when you, when you've got a perfect day, the entire ship goes there and it's the entire day for the gas. Whereas when you have the beach club experience, it's an experience that's available to the gas, but the gas can choose other experiences as well.
Very helpful. And then as you think about tick-boxing versus ancillary spend, how do you imagine Paradise would be different than Coca-Cola or similar?
Unknown Speaker: There are some differences because the Beach Club is a for-purchase experience, whereas at Perfect Day, there's a huge amount of the experience that's complimentary, and then there's many elements of the experience that you purchase because when you go to Perfect Day, the entire ship goes there, and it's the entire day for the guest. Whereas when you have the Beach Club experience, it's an experience that's available to the guest, but the guest can choose other experiences as well. So there's literally a ticket price to enter the Beach Club.
In terms of span, we think it's going to be very similar. There are some differences because the Beach Club is a full-purchase experience, whereas Perfect Day there's
Huge amount of the experience is complimentary and then there's many elements of the experience that you purchase
because we when you when you go to perfect day the entire ship goes there and and it's it's the entire day for the gas.
Whereas when you have the Beach Club experience, it's an experience that's available to the guests, but the guests can choose other experiences as well. So there's literally a ticket price to enter into the Beach Club.
Michael Bayley: So there's literally a ticket price to enter into the beach club. Got it. Thank you. Okay. Thank you.
Unknown Speaker: Got it. Thank you. Okay, we thank everyone. Thank you. We thank everyone for their participation and interest. Michael will be available for any follow-up.
Got it. Thank you.
Okay, we thank everyone for your participation and interest. Michael will be available for any follow-up. We wish you all a great day.
Operator: We thank everyone for your participation and interest. Michael will be available for any follow-up. We wish you all a great day. Ladies and gentlemen, this concludes today's conference. Thank you all for your participation. You may now disconnect.
Unknown Speaker: We wish you all a great day. Ladies and gentlemen, this concludes today's conference. Thank you all for your participation. You may now disconnect. Get ready for the best family vacation in the world, Icon of the Seas. It's the first of a whole new class of ships where everyone in your crew will have the time of their life multiple times a day.
Ladies and gentlemen, this concludes today's conference. Thank you all for your participation. You may now disconnect. Get ready for the best family vacation in the world. I come of the seas. It's the first of a whole new class of ships where everyone in your crew will have the time of their life multiple times a day. You'll never.
Operator: Get ready for the best family vacation in the world. I come up to see you.
Operator: It's the first of a whole new class of ships where everyone in your crew will have the time of their life multiple times a day.