Q1 2025 Carnival PLC Earnings Call

Operator: Greetings, and welcome to the Carnival Corporation and PLC's conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you, Beth. You may begin.

Ladies and gentlemen, thank you for standing by. The Carnival Corporation conference call will begin momentarily. Once again we thank you for standing by. Please continue to hold. Our conference will begin momentarily.

Greetings and welcome to the Carnival Corporation and plc conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded its now my pleasure to introduce your host Beth Roberts Senior Vice President Investor Relations. Thank you Beth you may begin.

Beth Roberts: Thank you. Good morning, and welcome to our Q1 2025 Earnings Conference Call. I'm joined today by our CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein, and our Chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the forward-looking statement in today's press release. All references to ticket prices, yields, and cruise costs without fuel will be in constant currency unless otherwise stated. References to yields will be on a net basis. References to cruise costs without fuel, EBITDA, net income, and ROIC will be on an adjusted basis unless otherwise stated. All of these references are non-GAAP financial measures defined in our earnings press release.

Speaker Change: Thank you good morning, and welcome to our first quarter 2025 earnings Conference call I'm joined today by our CEO, Josh Weinstein, Our Chief Financial Officer, David Bernstein, and our Chairman Micky Arison.

Before we begin please note that some of our remarks on this call will be forward looking therefore.

Speaker Change: Therefore, I will refer you to the forward looking statement in today's press release, all references to ticket prices, yes, and cruise costs without fuel will be in constant currency unless otherwise stated references to yields will be on a net basis references cruise costs without fuel EBITDA net income and our I C.

Speaker Change: He will be on an adjusted basis unless otherwise stated.

Speaker Change: All of these references are non-GAAP financial measure as defined in our earnings press release, a reconciliation to the most directly comparable U S. GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our Investor presentation. Please visit our corporate website, where our earnings press release and Investor presentation.

Beth Roberts: A reconciliation to the most directly comparable US GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our investor presentation. Please visit our corporate website where our earnings press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Josh: It can be found with that I'd like to turn the call over to Josh.

Josh Weinstein: Thanks, Beth. Once again, we delivered a fantastic quarter, this time hitting Q1 high-water marks for revenue, EBITDA for ALBD, operating income, and customer deposits. Net income came in more than $170 million better than guidance as we outperformed across the board, led by incredibly strong demand throughout our portfolio. We achieved a robust 7.3% yield increase, smashing our yield guidance on top of last year's 17% yield improvement. Both ticket and onboard equally outperformed on very strong close-in demand, which speaks to the strength of our consumer. Unit costs also came in better than expected, mainly due to timing between the quarters. This resulted in a near doubling of operating income for the quarter and EBITDA that reached $1.2 billion, approaching a 40% year-over-year increase. Operating margins and EBITDA margins each improved over 400 basis points year-over-year, with both of these now surpassing 2019 levels.

Josh: Thanks Beth.

Josh: Once again, we delivered a fantastic quarter.

Josh: This time hitting first quarter high watermarks for revenue EBITDA EBITDA for a L. B D operating income and customer deposits netting.

Josh: Net income came in more than a $170 million better than guidance as we outperformed across the board led by incredibly strong demand throughout our portfolio.

Josh: We achieved a robust seven 3% yield increase.

Josh: Matching our yield guidance on top of last year's 17% yield improvement.

Josh: Both ticket and onboard equally outperformed them very strong close in demand, which speaks to the strength of our consumer.

Josh: Unit costs also came in better than expected, mainly due to timing between the quarters.

Josh: This resulted in a near doubling of operating income for the quarter.

Josh: And EBITDA that reached $1.2 billion approaching a 40% year over year increase.

Josh: Operating margins and EBITDA margins, each improved over 400 basis points year over year with both of these now surpassing 2019 levels.

Josh Weinstein: For the full year, and despite heightened macroeconomic and geopolitical volatility since providing our December guidance, we are taking up yields by 0.5 point to 4.7% based on our strong first quarter results, while affirming yield expectations for the remainder of the year. In addition, David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone. Combined, this successful execution has enabled us to take up our earnings guidance for the year by $185 million. 2025 remains on track to be another very strong year for our brands, with yield growth far outpacing historical growth rates and nicely exceeding unit cost growth, delivering approximately $600 million incrementally to the bottom line, more than a 30% improvement from 2024. That is essentially on flat capacity growth.

Josh: For the full year, and despite heightened macroeconomic and geopolitical volatility since providing our December guidance, we are taking up yields by half a point to 4.7% based on our strong first quarter results, while affirming yield expectations for the.

Josh: The remainder of the year.

In addition to.

Josh: David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone.

Josh: Combined this successful execution has enabled us to take up our earnings guidance for the year by $185 million.

2025 remains on track to be another very strong year for our brands with yield growth far outpacing historical growth rates and nicely exceeding unit cost growth delivering approximately $600 million incrementally to the bottom line.

Josh: More than a 30% improvement from 'twenty to 'twenty, four and that is essentially flat capacity growth.

Josh Weinstein: Achieving our March guidance will also result in reaching both of our 2026 SEA Change financial targets 1 year early, with ROIC hitting 12% and EBITDA per ALBD more than 50% higher than just 2 years ago, taking each of these 2 metrics to levels not seen in the better part of 20 years. At the same time, we're also closing in on our 2026 greenhouse gas target with an over 19% reduction in carbon intensity compared to 2019. We're generating demand well in excess of our very limited inventory remaining, which has been driving strong pricing for the remainder of the year, while also building demand for future years. In fact, we're at historical high prices across all core programs for 2025 and all quarters of the year, while booking volumes for 2026 sailings and beyond taken during the Q1 also reached an all-time high.

Josh: Achieving our March guidance will also result in reaching both of our 2026 C change financial targets, one year early with Rois see hitting 12% and EBITDA per a L. B D more than 50% higher than just two years ago.

Josh: Taking each of these two metrics to levels not seen in the better part of 20 years at.

Josh: At the same time, we're also closing in on our 'twenty 'twenty six greenhouse gas targets with an over 19% reduction in carbon intensity compared to 2019.

Josh: We're generating demand well in excess of our very limited inventory remaining.

Josh: Which has been driving strong pricing for the remainder of the year, while also building demand for future years.

Josh: In fact.

Josh: We're at historical high prices across all core programs for 2020 five in all quarters of the year well booking volumes for 'twenty 'twenty six sailings M beyond taken during the first quarter also reached an all time high.

Josh Weinstein: We were very well-positioned going into Wave this year, and we exited with over 80% of the year on the books at higher prices and with a booking curve that is still the farthest out on record. We have no plans to let up anytime soon. As we foreshadowed on the last call, we kicked off new marketing campaigns across all major brands during Wave season to fuel more broad-based consideration for cruise travel and keep the strong momentum going. Costa kicked up the volume at the Sanremo Music Festival, among Italy's most renowned music events, which was watched by over two-thirds of Italy's television audience, featuring a live performance onboard Costa Toscana. Carnival Cruise Line was also a standout at the Oscars, selected along with a few other household names for a themed promo honoring stunt performers and featuring a daring skydive into a pool onboard Carnival Celebration.

Josh: We were very well positioned going into wave this year, and we exited with over 80% of the year on the books at higher prices and with the booking curve that is still the farthest out on record.

Josh: We have no plans to let up anytime soon.

Josh: As we foreshadowed on the last call, we kicked off new marketing campaigns across all major brands during wave season to fuel more broad based consideration for cruise travel and keep the strong momentum going.

Josh: Caustic ticked up the volume at the San Raimo Music Festival, among Italy's most renowned music events, which was watched by over two thirds of Italy's TV audience, featuring a life performance onboard Costa Toscano.

Josh: Carnival cruise line was also a standout at the Oscars selected along with a few other household names for a themed promo honoring stunt performers and featuring a daring skydive into a pool onboard carnival celebration.

Josh Weinstein: Of course, Carnival Cruise Line has clearly amped up the volume around Celebration Key, which was showcased while lighting the iconic New Year's Eve ball drop in Times Square and continued through the Super Bowl in New Orleans, featuring our celebrity chef partners Emeril Lagasse and Guy Fieri, as well as brand ambassador Shaquille O'Neal. These two events alone captured over 5 billion impressions across paid, earned, and owned media. Carnival's adorable Wave campaign, Flip: Lost in Paradise, was a hit, getting huge cut-through with marketing KPIs up across the board. If our marketing team managed to get that kind of traction around what is still computer-generated animation, I look forward to four months from now when all five portals built for fun at Celebration Key are open for our guests and can be showcased.

Speaker Change: Of course Carnival cruise line has clearly amped up the volume around celebration key which was showcased while lighting the iconic new year's Eve ball drop in times square and continue through the Super Bowl in New Orleans, featuring our celebrity Chef partners, Emeril, Lagasse, and Guy fieri as well as brand.

Josh: At her Shaquille O'neal these.

Josh: These two events alone captured over 5 billion impressions across paid earned and owned media.

Josh: And carnivals Adorable wave campaign flip lost in Paradise was a hit get a huge cut through with marketing kpis up across the board.

Josh: Our marketing team managed to get that kind of traction around what is still computer generated animation.

Josh: Look forward to four months from now when all five portals built for fun at celebration key are open for our guests and can be showcased.

Josh Weinstein: We're on track for our July opening and executing our ramp-up plan into the Q4 as our team settles into these new operations and focuses on delivering the kind of phenomenal experience our guests have come to expect from our exclusive destinations. RelaxAway Half Moon Cay is also on schedule for the H2 of 2026. We've already begun to increase our marketing around this enhanced and rebranded jewel in the Caribbean, and we'll have more to come on our plans to increase awareness and consideration for our brands as we leverage our underexposed portfolio of Caribbean destinations.

Josh: We're on track for a July opening and executing our ramp up plan into the fourth quarter as our teams settles into these new operations and focuses on delivering the kind of phenomenal experience. Our guests have come to expect from our exclusive destinations.

Josh: Lacks away half Moon Cay is also on schedule for the second half of 'twenty or 'twenty six.

Josh: We've already begun to increase our marketing around this enhanced and rebranded jewel in the Caribbean.

Josh: And we'll have more to come on our plans to increase awareness and consideration for our brands as we leverage our underexposed portfolio of Caribbean destinations.

Josh Weinstein: Turning to Alaska, we just announced an expansion and renovation project to Denali Lodge, one of our nine owned and operated hotel properties, building on this unmatched strategic advantage for Holland America and Princess Cruises. Enhancements will include the addition of 120 new guest rooms and suites, room remodelings, additional food and beverage venues, and improvements to public spaces and nature trails. Our brands' land/sea packages are a huge draw for new-to-cruise guests and truly the best way to experience the greatness of Alaska. We also just completed the first of seven AIDA ships to undergo our AIDA Evolution program. AIDAdiva is now sailing from Rome, having just returned from a seven-week dry dock with many added features that our German guests have come to love on AIDA's newer vessels. This includes over half a dozen new bar and dining venues, new suites, and equipment upgrades to enhance fuel efficiency.

Josh: Turning to Alaska, We just announced an expansion and renovation project to Denali large one of our nine owned and operated hotel properties building on this unmatched strategic advantage for Holland America and Princess cruises.

Josh: Enhancements will include the addition of 120, new guest rooms and suites.

Josh: Remodeling additional food and beverage venues and improvements to public spaces and nature trails.

Josh: Our brands land sea packages are a huge draw for new to cruise guests and truly the best way to experience the greatness of Alaska.

Josh: We also just completed the first of seven Aida ships to undergo our Aida evolution program.

Josh: We eat a diva is now sailing from Rome, having just returned from a seven week dry dock with many added features that our German guests have come to love and I eat as newer vessels.

Josh: This includes over half a dozen new bar and dining venues, new suites and equipment upgrades to enhance fuel efficiency.

Josh Weinstein: AIDAluna will start her evolution later this year, followed by AIDAbella and AIDAmar in 2026. We also further progressed on optimizing our portfolio. Just this month, we completed the sunsetting of our P&O Cruises Australia brand by folding its two remaining ships into Carnival Cruise Line. We also consolidated our Seabourn fleet with the sale of Seabourn Sojourn. While we were not actively looking to sell the ship, the offer was in the best interest of our shareholders. The sale leaves Seabourn well-positioned with a phenomenal fleet of three ultra-luxury ocean vessels and two recently launched ultra-luxury expedition ships, which comprises one of the most modern fleets in the industry at an average age of just over seven years.

Josh: I eat of Luna will start her evolution later this year, followed by Aida Bella and I eat them are in 2026.

Josh: We also further progressed on optimizing our portfolio.

Josh: Just this month, we completed the sunsetting of our piano cruises, Australia brand by folding its two remaining ships into carnival cruise lines.

Josh: We also consolidated our Seabourn fleet with the sale of seaborne soldier and while we were not actively looking to sell to ship.

The author was in the best interests of our shareholders.

Josh: The sale lease seaborne well positioned where they phenomenal fleet of three ultra luxury ocean vessels.

Josh: And two recently launched ultra luxury expedition ships, which comprises one of the most modern fleets in the industry at an average age of just over seven years now turning back to the business and as you can see from our first quarter outperformance.

Josh Weinstein: Now, turning back to the business, as you can see from our Q1 outperformance, onboard spending and booking levels, we have proven to be incredibly resilient to the volatility around the globe. Having said that, even with our resilience and strong visibility, given that so much of 2025 is already on the books, we aren't taking the current backdrop lightly. We will be working hard to achieve these results. Thankfully, our team is nimble and agile, characteristics, as you know, we honed so well over the H1 of this decade, leaving us better positioned to manage through whatever comes our way. We have strong, well-recognized brands that are number one or two in every major market for cruise, often tailored specifically to phenomenal national markets such as the US, Germany, and the UK, markets that are deep and under-penetrated.

Josh: Onboard spending and booking levels.

Josh: We have proven to be incredibly resilient to the volatility around the globe.

Josh: Having said that even with a resilience and strong visibility given that so much of 2025 is already on the books, we arent taking the current backdrop lately, we will be working hard to achieve these results thankfully our team is nimble and agile characteristics as.

Josh: You know, we honed so well over the first half of this decade, leaving us better positioned to manage through whatever comes our way.

Josh: We have strong well recognized brands that are number one or two in every major market for cruise often tailored specifically to phenomenal national markets, such as the U S, Germany, and the U K markets that are deep and Underpenetrated.

Josh Weinstein: We are delivering amazing vacation experiences every day in a time when people all over the world are placing increasing importance on experiences, particularly those spent with friends and family. On top of that, we are still a ridiculously amazing value compared to land-based alternatives. While we have been chipping away at the price gap to land-based alternatives, the price-to-experience ratio of cruising versus those other options remains massively disproportionate. While somewhat frustrating, and while still a big opportunity over the coming years, this huge value for money is also truly a strength when people are looking to make their vacation dollars go even further. It's about to get even better with the opening of Celebration Key, our marquee port in the Caribbean, which will give our guests yet another reason to come cruise with us.

Josh: We are delivering amazing vacation experiences every day in a time when people all over the world are placing increasing importance on experiences, particularly those spent with friends and family.

Josh: And on top of that we are still a ridiculous Lee amazing value compared to land based alternatives.

Josh: We have been chipping away at the price gap to land based alternatives the price too experienced ratio of cruising versus those other options remains massively disproportionate.

Josh: While somewhat frustrating and while it's still a big opportunity over the coming years. This huge value for money is also truly a strength when people are looking to make their vacation dollars go even further.

Josh: And it's about to get even better with the opening of celebration key our marquee port in the Caribbean, which will give our guests yet another reason to come cruise with us.

Josh Weinstein: We have been making huge strides on rebuilding our financial fortress as we close in on investment-grade leverage metrics. We have well-managed near-term maturity towers and no new ships for delivery in 2026, which gives us a good amount of headroom to continue paying down debt. In fact, we have just 3 ships on order over the next 4 years, further supporting our ability to reach investment-grade leverage metrics within 2026. Simply put, we are well-positioned for the future and are pushing forward with intention. I'll end by saying thanks to our travel agent partners, loyal guests, investors, destination partners, and other stakeholders who have contributed greatly to our results. Of course, a special thank you to each of our team members for driving outperformance once again.

Josh: We have been making huge strides in rebuilding our financial fortress as we close in on investment grade leverage metrics.

Josh: We have a well managed near term maturity towers and no new ships for delivery in 2026, which gives us a good amount of headroom to continue paying down debt in fact.

Josh: We have just three ships on order over the next four years further supporting our ability to reach investment grade leverage metrics within 20 twenty-six Sim.

Josh: Simply put we are well positioned for the future and are pushing forward with intention.

Josh: I'll end by saying, thanks to our travel agent partners loyal guests investors destination partners and other stakeholders, who have contributed greatly to our results and of course, a special thank you to each of our team members for driving outperformance once again.

Josh Weinstein: Most important for our long-term success, thank you to each and every team member for delivering unforgettable happiness to our guests by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit, and life we touch. With that, I'll turn the call over to David.

Josh: But most important for our long term success.

Josh: Thank you to each and every team member for delivering unforgettable happiness to our guests by providing them with extraordinary cruise vacations, while honoring the integrity of every osha, we sell place we visit and life we touch.

David: With that I'll turn the call over to David.

David Bernstein: Thank you, Josh. I'll start today with a summary of our 2025 Q1 results. I will provide some color on our improved full-year March guidance. I'll finish up with an update of our refinancing and de-leveraging efforts. Turning to the summary of our Q1 results. Net income exceeded December guidance by more than $170 million as we outperformed once again. The outperformance was essentially driven by three things. First, favorability in revenue worth $98 million as yields came in up over 7% compared to the prior year. This was 2.7 points better than December guidance, driven by both close-in strength in ticket prices and strong onboard spending. Second, cruise costs without fuel per available lower berth day, or ALBD, were only up 1% compared to the prior year. This was 2.4 points better than December guidance and was worth $65 million.

David: Thank you Josh I'll start today with a summary of our 2025 first quarter results.

David: Next I will provide some color on our improved full year March guidance.

David: Then I'll finish up with an update of our refinancing and deleveraging efforts.

David: Turning to December of our first quarter results.

David: Net income exceeded December guidance by more than $170 million as we outperformed once again.

David: The outperformance was essentially driven by three things.

David: First favorability in revenue with $98 million as yields came in at over 7% compared to the prior year.

David: This was two seven points better than December guidance, driven by both close in strength in ticket prices and strong onboard spending.

David: Second cruise costs without fuel per available lower birthday, or a L. B D. We're only up 1% compared to the prior year.

David: This was two points four points better than December guidance and was worth $65 million.

David Bernstein: The favorability in cost was mainly due to the timing of expenses between the quarters. We did find some permanent savings which flowed through to the full year, which I will touch on later in my remarks. Third, favorability in interest expense of $13 million was driven by our refinancing efforts during the quarter. Yield improvement in Q1 versus the prior year was driven by improvements on both sides of the Atlantic from higher ticket prices and improved onboard spending. The improvement in ticket prices was broad-based across all core programs. The improvement in onboard spending, which accelerated from last quarter, was also broad-based, as all categories of spending were meaningfully higher. Continuing the trend from last year, our European brands continued to outperform year-over-year on both price and occupancy.

David: The favorability in cost was mainly due to the timing of expenses between the quarters.

David: We did find some permanent savings, which flowed through to the full year, which I will touch on later in my remarks.

David: And third favorability in interest expense of $13 million was driven by our refinancing efforts during the quarter.

David: Yield improvement in the first quarter versus the prior year was driven by improvements in both sides of the Atlantic from higher ticket prices and improved onboard spending.

David: The improvement in ticket prices was broad based across all core programs.

David: The improvement in onboard spending which accelerated from last quarter was also broad based as all categories of spending were meaningfully higher.

David: Continuing the trend from last year, our European brands continue to outperform year over year on both price and occupancy.

David Bernstein: Customer deposits at the end of Q1 were up over $300 million versus the prior year, driven by both improved ticket prices and increased pre-cruise onboard sales. Next, I will provide some color on our improved full-year March guidance. March guidance net income of approximately $2.5 billion is a $185 million improvement over December guidance. The improvement was essentially driven by two things. Our Q1 favorability in yield flowed through to the full year, improving our full-year yield guidance by 0.5 percentage point to 4.7% versus the prior year. Our refinancing efforts during the quarter allowed us to lower our full-year interest expense guidance by $100 million. I did want to point out that absolute cruise costs, excluding fuel, are expected to be slightly less than December guidance.

David: Customer deposits at the end of the first quarter were up over $300 million versus the prior year driven by both improved ticket prices and increased pre cruise onboard sales.

David: Next I will provide some color on our improved full year March guidance.

March guidance net income of approximately $2 $5 billion is 185 million dollar improvement over December guidance.

David: The improvement was essentially driven by two things.

Our first quarter favorability in yield flowed through to the full year, improving our full year yield guidance by half a point to four 7% versus the prior year.

David: And our refinancing efforts during the quarter allowed us to lower our full year interest expense guidance by $100 million.

I did want to point out that absolute cruise costs, excluding fuel are expected to be slightly less than December guidance. As I. Previously indicated we did find some permanent savings during the first quarter, which flowed through to the full year.

David Bernstein: As I previously indicated, we did find some permanent savings during Q1, which flowed through to the full year. However, those savings were partially offset by higher dry dock costs because of a couple of unplanned dry docks and charter hire costs associated with the sale of one of our vessels during the month of March. While charter hire costs increased cruise costs, they are offset by lower depreciation expense. With absolute cruise costs slightly better, the change in cruise costs without fuel per ALBD is 3.8% for March guidance, which is simply the math of spreading lower cruise costs over the revised ALBDs, which change from December guidance because of a couple of unplanned dry docks in 2025.

David: However, those savings were partially offset by higher dry dock costs because of a couple of unplanned drydocks and charter higher costs associated with the sale of one of our vessels during the month of March well charter hire cost increase cruise costs, they were offset by lower depreciation.

David: Aviation experience.

David: With absolute cruise costs slightly better the change in cruise costs without fuel per <unk> a L. B day is three 8% for March guidance, which is simply the math of spreading lower cruise costs over the revised <unk>, which changed from December guidance because of a couple of unplanned drydocks.

David: 2025.

David: All of this results in $6 7 billion of EBITDA.

David Bernstein: All of this results in $6.7 billion of EBITDA, a nearly 10% improvement over 2024, virtually all of which was driven by same-store revenue growth as our capacity is essentially flat year-over-year. Now I'll finish up with an update of our refinancing and deleveraging efforts. During the quarter, we refinanced $5.5 billion of debt, which is 20% of our total debt, with three very successful transactions. These transactions included our highest coupon debt instruments and delivered an incremental $145 million in annualized interest expense savings. We have been opportunistically reducing interest expense while simplifying our capital structure and managing our future debt maturities. Today, our average cash interest rate is down significantly at just 4.6%. Over the last 12 months, we've reduced our secured and senior priority guaranteed debt by approximately $4 billion with more reductions to come.

David: A nearly 10% improvement over 'twenty 'twenty four for.

David: Actually all of which was driven by same store revenue growth as our capacity is essentially flat year over year.

David: Now I'll finish up with an update of our refinancing and deleveraging efforts.

David: During the quarter, we refinanced $5 5 billion of debt, which is 20% of our total debt with three very successful transactions. These transactions included our highest coupon debt instruments and delivered an incremental $145 million in hanging.

David: <unk> interest expense savings.

David: We have been opportunistically, reducing interest expense, while simplifying our capital structure and managing our future debt maturities.

David: Today, our average cash interest rate is down significantly at just four 6%.

David: Over the last 12 months, we've reduced our secured and senior priority guaranteed debt by approximately $4 billion with more reductions to come.

David Bernstein: Our near-term maturity towers are well managed with just $1.1 billion of debt maturities for the remainder of 2025 and $2.7 billion for the full year 2026. During the Q1, we reduced debt by another half a billion dollars, ending the quarter with $27 billion of total debt. With the benefit of well-managed near-term maturity towers and improved leverage metrics, over the remainder of this year and through 2026, we expect to opportunistically execute the rest of our current refinancing plan, prepaying debt, further simplifying our capital structure, optimizing our future debt maturities, and further reducing our interest expense. For the two-year period of 2025 and 2026. This refinancing plan, combined with our strong and growing cash flow and just one new build being delivered over this time, has the potential to reduce debt by nearly $5 billion from where we ended 2024.

David: Our near term maturity towers are well managed with just $1 1 billion of debt maturities for the remainder of 2025 and $2 7 billion for the full year 2026.

During the first quarter, we reduced debt by another half a billion dollars ending the quarter with $27 billion of total debt.

David: With the benefit of well manage near term maturity towers and improved leverage metrics over the remainder of this year and through 2026, we expect to Opportunistically execute the rest of our current refinancing plan.

David: Prepaying debt further simplifying our capital structure, optimizing our future debt maturities and further reducing our interest expense.

David: For the two year period of 2025 and 2026. This refinancing plan combined with our strong and growing cash flow and just one <unk> being deliberate over this time has the potential to reduce debt by nearly $5 billion from where we ended 2012.

Four.

David Bernstein: Let's not forget that we ended 2024 over $8 billion off the January 2023 peak. Looking forward, we expect our leverage metrics to continue to improve as our EBITDA continues to grow and our debt levels continue to shrink, increasing our confidence in achieving investment-grade leverage metrics in the short term as we move further down the road, rebuilding our financial fortress while continuing the process of transferring value from debt holders back to shareholders. Now, operator, let's open the call for questions.

David: And let's not forget that we ended 2024 over $8 billion off the January 2023 peak.

David: Looking forward, we expect our leverage metrics to continue to improve as our EBITDA continues to grow and our debt levels continue to shrink increasing our confidence in achieving an investment grade leverage metrics in the short term as we move further down the road rebuilding our final.

David: Natural fortress, while continuing the process of transferring value from debt holders back to shareholders.

David: Now operator, let's open the call for questions.

Operator: Thank you. Our first question comes from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is another question you May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.

David: The starches.

David: Allow for as many questions as possible, we ask that you limit yourself to one question and one follow up thank you.

Speaker Change: Our first question comes from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

Ben Chaiken: Hey, good morning. Thanks for taking our questions and for all the helpful commentary. I think it would be great if you could provide some more color on maybe how we're trending since the 4Q period. Anything notable regarding changes to the consumer or demand trends? I know that you noted not being immune from the macro, which I guess shouldn't be a surprise, but just maybe some more color on what exactly that means. One quick follow-up. Thanks.

Ben Chaiken: Hey, Hey.

Ben Chaiken: Hey, good morning, Thanks for taking the questions and for all the helpful commentary I think it would be great. If you could provide some more color on maybe how were trending since the <unk> period anything notable regarding changes to the consumer demand trends I know that you noted not being immune from the macro which I guess shouldn't be a surprise, but just maybe some more color on.

Ben Chaiken: On what exactly that means and then one quick follow up thanks.

Josh Weinstein: Good morning, Ben. Thank you for acknowledging we do live on planet Earth. Look, Wave was a success, right? We set a record for bookings for further out years. We came into Wave at historic occupancy and price. We used that to our advantage. We took price, and we're well set up for the rest of the year. Hence, not only did we pretty much smash Q1 on the yields, but we maintained yield guidance for the rest of the year over 4%. I think we feel real good about how we've been tackling things, and our brands are doing a good job.

Speaker Change: Good morning, Matt and thank you for acknowledging we do live on planet Earth.

Speaker Change: So you know look wave, where it was a success right I mean, we set a record for bookings for further out years, we came into wave that historic occupancy and price we use that to our advantage, we took price and we're well set up for the rest of the year has not only do we pretty much smash.

Speaker Change: Q1 on the year.

Speaker Change: Fields, but we maintained your guidance for the rest of the year over 4%. So I think we feel real good about how we how we've been tackling things and our brands are doing a good job.

Ben Chaiken: Got it. That's very helpful. Just to clarify maybe some of David's comments. You beat the Q1, you smashed the Q1, to your point, by $165 million, raised the guide, at least from what we can tell, by around $100. Our take from your comments is that the net yield outlook for Q2 through Q4 is the same. I think costs were actually slightly lower, per David's comments, but the net cruise cost higher because of lower ALBDs from the dry docks. I guess, what was the ALBD impact, if I got that right? I hate to be overly granular, but does the $165 beat in Q1 versus the $100 million flow-through driven entirely by the lower ALBD dry dock dynamic, or is there anything else that you would flag? Thanks a lot.

Speaker Change: Got it that's very helpful. And then just to clarify maybe somewhat David comment David's comments, you beat the <unk> smashed the <unk> to your point by 165 million raise the guide at least from what we can tell by around 100 or take from your comments is that the net yield outlook for quarters. Two through four is the same.

Speaker Change: AME.

Speaker Change: I think costs were actually slightly lower per David's comments, but the net cruise cost higher because of lower <unk> from the dry docks I guess, what was the Abd impact if I got that right and then I hate to be overly granular, but does the 165 feet in <unk> versus the 100 million flow through driven entirely by the or L. B.

Speaker Change: The dry dock dynamic or is there anything else that you would flag. Thanks a lot.

David Bernstein: First of all, the flow-through to the year was a combination of two things. It was the yield that flowed through from the Q1, which was a $98 million, as well as $100 million of interest expense. The total improvement for the year, I think, was $183 million.

Speaker Change: So the float first of all the flow through to the year was a combination of two things. It was the the yield that flowed through from the first quarter, which was a 98 million as well as $100 million of interest expense and the total improvement for the year I think was $183 million.

Ben Chaiken: Yeah. Sure. I guess I was referring to EBITDA, sorry. Yeah. Sorry, the $165.

Speaker Change: I guess I was referring to EBITDA, sorry, yeah, sorry that 175, yeah. So the EBITDA is just basically that.

David Bernstein: Yeah. The EBITDA is just basically the net income less the interest.

Speaker Change: Net income less the interest yes.

Josh Weinstein: Yeah. Ben, the short answer is the yield flowed through for the year. The cost was mostly timing, which is why you don't see the full amount from Q1 going into the full year. We did reduce our absolute cost in a couple of ways, a few tens of millions of dollars. Because of the reduction in ALBDs because of the extra dry docks, it basically covers it up.

Speaker Change: The short answer is the yield flew flowed.

Speaker Change: Load through for the year the cost was mostly timing, which is why you don't see the full amount from Q1 going into the full year, we did reduce our absolute costs in a couple of ways. You know a few tens of millions of dollars, but because of the the reduction in <unk> because of the extra dry docks there.

Speaker Change: Basically it covers it up.

Ben Chaiken: Okay. Got it. That's very helpful. Thanks for clarifying.

Speaker Change: Okay got it that's very helpful. Thanks for clarifying.

Josh Weinstein: Sure. Thank you.

Speaker Change: Sure. Thank you.

Operator: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Robin Farley: Great. Thanks very much. Obviously, a lot of concern among investors because of some airline commentary and last night, a hotel data point. Great news to raise guidance, mostly by the Q1 beat when we look at the yield. Just given how you talked about the close-in being strong and onboard being strong, does that suggest that you're not raising the next 3 quarters' yield because you want to be cautious, obviously, given the environment? There would be that potential if your expectations for the close-in and onboard are still what they were 3 months ago, that there's potential upside to that guide. Is that the way to think about the rest of the year?

Speaker Change: Great. Thanks very much.

Speaker Change: Obviously, a lot of concern among investors because of some airline commentary last night, a hotel data point, so great news to them too.

Speaker Change: The raised guidance, mostly by the Q1 beat when we look at the yield and just given how you talked about the close end being strong and onboard being strong does that suggest that youre not raising the next three quarters yield because you know you want to be cautious obviously given the environment.

Speaker Change: But there would be that potential if your if your expectations for the close in and onboard are still what they were three months ago that there's potential upside to that guide is that the way to think about the.

Speaker Change: The rest of the year.

Josh Weinstein: Yeah, look, the strength of Q1 was pretty fantastic, and it was driven by both the close-in demand on the ticket and just tremendous onboard spending. We're talking about 10% growth year over year for Q1, which is actually an acceleration of onboard spend trends versus year over year growth from Q4. Frankly, the onboard spend that we've seen in the first couple of weeks of March hasn't slowed down. We do feel good about the strength of our consumer. Clearly, I just want to recognize that there's just a lot of volatility in the backdrop. Right? With new cycles comes volatility. We feel good about our guidance. We feel good about our ability to deliver it. We always want to outperform, and brands work on that day in and day out. Certainly don't promise anything other than we're going to do our best.

Speaker Change: Yeah look I mean, the strength of Q1 was pretty fantastic and that was driven by both the close in demand on the ticket and just tremendous onboard spending we're talking about 10% growth year over year for the for the for the first quarter, which is actually an acceleration of onboard spend trends versus year over year growth from the <unk>.

Speaker Change: Fourth quarter.

Speaker Change: Frankly, the onboard spend that we've seen in the first couple of weeks of March.

Speaker Change: March hasn't slowed down.

Speaker Change: We do feel good about the strength of our consumer I mean, clearly clearly I just wanted to.

Speaker Change: Recognize that there's just there's just a lot of volatility in the backdrop right and with new cycles comes volatility we feel good about our guidance, we feel good about our ability to deliver it we always want to outperform and brands work on that day in and day out certainly don't promise.

Speaker Change: Anything other than we're going to do our best.

Robin Farley: Great. Thank you. Maybe just as a quick follow-up, just if there's a way to maybe quantify with the expense, obviously, you said some of it was because of the ALBD. Is there a way to think about either the dollar amount of sort of ongoing structural net cruise cost expense reduction? Also excluding from that the higher charter cost from the Seabourn ship, right? Because that's just sort of shifting from depreciation sort of temporarily and not really structural cost. How should we think about sort of additional dollar amounts of structural cost, excluding that and excluding if we think of the aggregate dollar amount, then the ALBDs in the denominator won't matter? Thanks.

Speaker Change: Okay, great. Thank you and then maybe just as a quick follow up.

Speaker Change: Just if there's a way to maybe quantify them with the the expense. Obviously you said some of it was because of the <unk> is there a way to think about either the dollar amount of sort of ongoing structural net cruise cost expense reduction.

Speaker Change: Is it and also excluding from that the higher charter cost from the seaborne ship right. Because that's just sort of shifting from depreciation sort of temporarily I'm not not really structural costs. So what how should we think about.

Speaker Change: Additional dollar amounts of structural costs, excluding that and excluding you know if we think of the aggregate dollar amount of net L. P. DS in the denominator won't matter. Thanks, yes.

David Bernstein: Yeah. On the $65 million of cost in Q1, we said most of it was timing, but probably about a third of it was permanent cost savings. We're always looking for ongoing cost savings. We do have the best cost structure in the industry, but we don't stop there. We keep on finding ways to improve over time. We'll do that this year and next year and beyond.

Speaker Change: Yes, so the.

Speaker Change: The $65 million of cost in the first quarter and we said most of it was timing, but probably about a third of it was permanent cost savings.

Speaker Change: Always looking for ongoing cost savings.

Speaker Change: We do have the lowest the best cost structure in the industry.

Speaker Change: But we don't stop there we keep on finding ways to improve over time, and we'll do that this year and next year and beyond.

Robin Farley: Okay, great. That was totally clear. Thank you. Thanks.

Speaker Change: Okay, great that was totally clear thank you got it.

David Bernstein: You got it.

Speaker Change: Yes.

Operator: Thank you. Our next question comes from the line of Steve Wieczynski with Stifel. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of seafood with Stifel. Please proceed with your question.

Steve Wieczynski: Hey, guys. Good morning. Congrats on the Q1. Josh, want to ask about bookings that you're taking in right now for 2026. I know it's still a little bit early on, but just wondering if you're seeing any, what we would call material differences in bookings for 2026 by brand. Maybe if you're seeing customers book, but maybe they're not pre-booking on board as much or they're taking lower cabin categories. Just trying to make sure there isn't anything you're seeing right now, as we look further out, that would be concerning to you guys.

Speaker Change: Hey, guys good morning.

Speaker Change: And congrats on the first quarter so Josh.

Speaker Change: Just wanted to ask about bookings that you're you're taking in right now for 2026.

Speaker Change: And I know, it's still a little bit early on but just wondering if you're seeing any what.

Speaker Change: We would call kind of material differences in bookings for 2006 by you know by brand.

Speaker Change: Or maybe if youre seeing customers book.

Speaker Change: Book, but maybe that are pre booking onboard as much or they're taking lower cabin categories. Just I mean, just trying to make sure there isn't anything youre seeing right now as we look further out that would be concerning to you guys.

Josh Weinstein: Yeah. First, thanks, Steve Wieczynski. Thanks for the compliment. No, I guess the short answer is no. There's nothing that I'd say on a brand-by-brand basis was raised anything of interest to talk about. I love the fact that we can say that we can walk and chew gum at the same time and finish out 2025 and still ground ourselves with a good foundation for 2026. I think with a record book position at higher prices, that's exactly what the teams are doing.

Speaker Change: First thanks, Steve Thanks for the compliment no I mean, I guess the short answer is no. There's nothing that I would say on a brand by brand basis was raise any anything of interest to talk about I love. The fact that we can say that we can walk and chew gum at the same time and finished out 25 and still you know grow.

Speaker Change: <unk> found ourselves with a good foundation for 2006, and I think with a record booked.

Speaker Change: Position at higher prices, that's exactly what the teams are doing.

Steve Wieczynski: Okay. Got you. Makes sense. Sounds good. The second question, it's going to be kind of somewhat the same question that Robin Farley asked. I just want to ask it a little bit differently. You beat Q1 by, I think it was 270 basis points on the yield side of things. I guess as we think about, and we can see your Q2 guidance now, if we think about H2, if the consumer stays status quo, there's no change in onboard, close-in remains strong. I'm guessing there's probably upside to your H2 guidance. I'm just trying to ask that question maybe a little bit differently.

Speaker Change: Okay got you makes sense sounds good and then second question.

Speaker Change: It's going to be kind of somewhat the same question that Robin I, just want to ask it a little bit differently, but.

Speaker Change: You beat the first quarter by <unk>.

Speaker Change: I think it was 270 basis points on the yield side of things. So you know I guess as we think about the and we could see your second quarter guidance now. So if we think about the back half of the year. If you know if the consumer stays.

Speaker Change: <unk> quo Theres no change in onboard close and remains strong.

Speaker Change: I'm guessing, there's probably upside to your back half guidance I just I'm just trying to ask that question, maybe a little bit differently or maybe.

Josh Weinstein: Just to be clear, if our onboarding remains real strong and our close-in demand remains real strong, then yeah, I think you're right.

Speaker Change: Just to be clear just to be clear if our onboarding remains real strong close in demand remains really strong, but you're right.

Steve Wieczynski: Okay. That's all I needed to hear. Thank you very much.

Speaker Change: Okay. That's all I needed to hear thank you very much.

Josh Weinstein: Thanks, Steve.

Steve: Thanks, Steve.

Operator: Thank you. Our next question comes from the line of Brandt Montour with Barclays. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Brent months' work with Barclays. Please proceed with your question.

Brandt Montour: Good morning, everybody. Thanks for taking my question, and I'll echo the congratulations on the Q1 and raising the full-year guide. My question is a permutation of something you may have already gotten. I hope not. Josh, you guys see a lot of different consumers, and you see a lot of different areas of the world and how the behavior that those consumers can evolve with the current macro backdrop we're in. I'm curious if you're seeing any sort of relative differences between onboard and consumer booking behavior between Europe and America, as well as between drive to and fly to.

Brent: Good morning, everybody and thanks for taking my question and Echo the congratulations on the first quarter and raising the full year guide.

Brent: My question is it is a permutation of something you may have already gotten I hope I hope not but Josh you guys see.

Brent: A lot of different consumers and you see a lot of different areas of the world and how the behavior of those consumers can evolve with with the current macro backdrop. We're in I'm curious, if you're seeing any sort of relative differences between onboard and consumer booking behavior between Europe and America as well as.

Brent: Between drive to and fly to.

Josh Weinstein: Got it. Good morning, Brandt. We've been talking for a long time about the strength of the portfolio and the portfolio approach that we have. I'm going to sound like a broken record, but as I've been saying probably for the last, I don't know, 6 quarters now, Europe has been driving things forward real nicely, and that has continued. That's not a surprise for us, because of the whole structural way that we were amping up everything since a couple of years ago. That's remained consistent, which doesn't mean that North America is not performing. It just means that our European brands are outperforming the outperformance we got on this side. I feel pretty good about that. I'd say consumers, whether you are low-end, middle-of-the-road, high-end luxury, every person is different, right?

Brent: Got it so Gordon Brown.

Brent: So you know we've been talking for a long time about the strength of the portfolio and the portfolio approach that we have and you know I'm going to sound like a broken record, but as I've been saying probably for the last Oh.

Brent: Six quarters now Europe has been driving things forward real nicely and that has continued so that's not a surprise for us.

Brent: Because of the whole structural way that you know we were amping up everything since our since a couple of years ago. So that's remained consistent which doesn't mean that North America is now performing it just means that our European brands are outperforming the outperformance we got on this side.

Brent: So I.

Brent: I feel I feel pretty good about that I'd say, you know consumers, whether you are low and middle of the road high end luxury every person is different and every person who's going to internalize the backdrop of what theyre dealing with differently and make their choices and our portfolio approach works incredibly well against that backdrop.

Josh Weinstein: Every person is going to internalize the backdrop of what they're dealing with differently and make their choices. Our portfolio approach works incredibly well against that backdrop.

Brandt Montour: Thanks for that. Just a quick follow-up. If, let's say that, no one has a crystal ball. Let's say the consumer slows further, and if there's a slowdown in bookings industry-wide or let's just even say away from you, how do you perceive the industry's current willingness to sort of hold price or act more rationally than it has in the past?

Brent: Thanks for that and then just a quick follow up.

Brent: You know if they let's say that no one has a crystal ball, let's say the consumers are slows further and if there's a slowdown in bookings are industry wide or let's just even say away from you. How do you perceive the industry's current willingness to sort of hold price or act more rationally.

Brent: It has in the past.

Josh Weinstein: Look, I'll speak for myself. I will not speak for the industry other than to say, I think the industry overall is on good, solid ground. Got great leaders at those operations that are doing real good things for the industry as well as their brands. We're increasing consideration, increasing demand, which is a great thing for everybody. With respect to us, we're executing on the things that we've been talking about for years. It's resulted right now in us being better booked than pretty much we've ever been. We have great visibility. Not that much to go in this year. Onboard spends we pull forward, which is enhanced visibility, versus prior periods. We, in particular, we have no capacity growth, right?

Brent: Look I'll speak for myself, but I won't.

Brent: Not speak for the industry other than to say I think the industry. Overall is on good solid ground got great leaders at those operations that are doing real good things for the industry as well as their brands.

Brent: And were increasing consideration increasing demand, which is a great thing for everybody with respect to us.

Brent: We're executing on the things that we've been talking about for years, It's resulted right now and us being better book than you know pretty much we've ever been.

Brent: We we have great visibility are not that much to go in this year onboard spends we pull forward, which is enhanced visibility versus prior periods. So.

Brent: And we in particular, we have no capacity growth right. So where we are in a fairly enviable position I think that even though new builds are great, but we can do a lot with what we've got and having only one ship coming this year, none in 2026, 1% and 27, I mean that for us.

Josh Weinstein: We are in a fairly enviable position, I think, that even new builds are great, but we can do a lot with what we've got. Having only 1 ship coming this year, none in 2026, 1 in 2027, I mean, that for us, that's a fantastic roadmap for success. We're looking forward to it.

Brent: That's a fantastic roadmap for success. So we're looking forward to it.

Brent: Yeah.

Brandt Montour: Thanks a lot. Congrats again on the quarter.

Brent: Thanks, a lot congrats again on the quarter.

Josh Weinstein: Thank you.

Brent: Yeah.

Operator: Thank you. Our next question comes from the line of James Hardiman with Citigroup. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of James Hardiman with Citigroup. Please proceed with your question.

James Hardiman: Yeah. I guess tying this all up, outside of bookings and onboard spend, which you've talked about, are there any other forward indicators that you think might be a good indicator of your consumer sentiment or how they are with respect to making payments for their trips or how many are buying travel or insurance or what any of those indicators are showing?

Brent: Yes.

Brent: With the I guess.

Speaker Change: Hi, tying this all up outside of the bookings in onboard spend which you've talked about are there any other forward indicators that you that you think.

Speaker Change: It might be a good indicator of your consumer sentiment or whether they are respected making payments for their trips or how many youre buying travel or insurance or any what any of those indicators are showing.

Josh Weinstein: Man, James, you're going deep. No. Nothing out of the ordinary that would trigger flags. Cancellations are fairly consistent. There's really nothing else that we'd probably put on the table to talk about as anything of significance.

James Hardiman: Hey, James we're going deep.

No no nothing nothing out of the ordinary that would trigger flags cancellations are fairly consistent so there's really nothing else that we'd probably put on the table to talk about is our anything of significance.

James Hardiman: Fair enough. With the 12% ROIC in sight, can you give us any indication on what you think the long-term opportunity is there specifically and how you guys think about the return profile for Celebration Key and your other sort of non-ship investments? Are there any other investments that we should be thinking about that are significantly ahead of your corporate average?

James Hardiman: Fair enough.

James Hardiman: With the 12% of RSC insight.

James Hardiman: Can you give us any indication on what you think the long term opportunity is there specifically.

James Hardiman: How you guys think about the return profile for celebration key in there other sort of non shift investments are there any other investments that we should be thinking about that are significantly ahead of the corporate average.

Josh Weinstein: Well, I think overall, we feel real good about the progress we've been making on the returns that we're generating. I certainly don't view and never did view 12% as an ending point. Mid-teens is certainly realistic, and certainly what we'll be shooting for. The things that are going to drive it are really the continuation of doing our jobs better across the brands in the commercial space, watching the cost like we always do as a low-cost industry leader, and being able to lean into the investments that we're making around Celebration Key, RelaxAway, and doing some other things with positioning of some of the destinations that we currently own, which are phenomenal. On top of that, aside from the moderate, I'd say modest capacity growth we have, we are investing in ourselves in other ways.

James Hardiman: Well I think overall, we feel real good about the progress we've been making on the returns that we're generating I certainly don't view I never give you 12% isn't ending point so mid teens is certainly.

James Hardiman: Realistic.

James Hardiman: And certainly what we'll be shooting for the things that are going to drive it are really the continuation of doing our jobs better across the brands and the commercial space watching the cost like we always do as a low cost industry leader.

James Hardiman: Being able to lean into the investments that we're making around celebration key relax away.

James Hardiman: And doing some other things with the positioning of the some of the destinations that we currently own which.

James Hardiman: Which are phenomenal and on top of that.

James Hardiman: Aside from the moderate.

James Hardiman: I'd say modest capacity growth. We have we are in we are investing in ourselves in other ways. We've we've talked about our evolution. For example, I think I said in my prepared remarks.

Josh Weinstein: We've talked about AIDA Evolution, for example, I think I said it in my prepared remarks, which you take one of the most successful brands in the world, and you reinvest in them in their existing capacity to add revenue opportunities, cabins. That's going to serve us incredibly well, as is the investments we're making in Alaska, to delight our guests, and really cement our strategic advantage even further on our land-sea packages and what we have to offer in Alaska. I think that we're in a pretty strong place.

James Hardiman: Which you know you take one of the most successful brands in the world.

James Hardiman: You reinvest in them and their existing capacity to add revenue opportunities cabins.

James Hardiman: That's going to serve us incredibly well as is the investments we're making in Alaska.

James Hardiman: To delight, our guests and really cement our strategic advantage even further on.

James Hardiman: On our landscape packages and what we have to offer in Alaska. So I think that we're in a we're in a pretty strong place right.

James Hardiman: I guess just really quick off of that, delivering your targets so early, any indication when we might get new long-term outlooks?

James Hardiman: I guess, just really quick on the offer that deliver on your targets. So early any indication of when we might get new long term outlook.

Josh Weinstein: Man, I love that you're even asking that. I think we got to get to the targets, not just forecast them. My expectation would be, we'll be talking about our next set hopefully in early 2026. We got to deliver.

James Hardiman: Man I love that you have been asking that so I think we got a we got to get to the targets not just you know forecast them. So you know my expectation would be we'll be talking about our next set hopefully in early 2026, but that's you know we got to deliver.

James Hardiman: All right. Thanks a lot, guys.

James Hardiman: Alright, Thanks, a lot guys.

Josh Weinstein: Thank you.

James Hardiman: Okay.

James Hardiman: Yeah.

Operator: Thank you. Our next question comes from the line of Patrick Scholes with Truist Securities. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Patrick Scholes with true Security. Please proceed with your question.

Patrick Scholes: Great. Thank you. Good morning, everyone. I want to follow up on the comment in here in the press release about not being completely immune from the heightened macroeconomic geopolitical volatility since giving your guidance in December 2023. Regarding that volatility, have you actually seen the volatility have an impact on booking pace as the quarter progressed?

Patrick Scholes: Great. Thank you good morning, everyone.

James Hardiman: I wanted to follow up on the comment in here.

Patrick Scholes: In the press release about not being completely immune.

Patrick Scholes: From the heightened macro economic geopolitical volatility since given your guidance in December.

Patrick Scholes: Regarding that volatility have you actually seen the.

Patrick Scholes: The volatility have an impact on our booking pace as the quarter progressed.

Josh Weinstein: Look, we certainly saw ups and downs. I mean, we see ups and downs every year. That's not terribly surprising. It all came out to the bookings we were able to make at the pricing that we wanted to make, and sets us up, as we talked about, in a really good position. At the end of the day, people just need to be getting used to the new normal, which is exactly what's happening. As a matter of fact, last week, bookings nicely ahead year-over-year. Not everything is the end all be all for year-over-year, but it's what we talk about publicly.

Patrick Scholes: Yes, what we say look we certainly saw ups and downs I mean, we see ups and downs.

Patrick Scholes: Every year, so that's not terribly surprising.

Patrick Scholes: It all it all came out of the bookings we were able to make at the pricing that we wanted to make.

Patrick Scholes: And sets us up as we talked about in a really good position.

Patrick Scholes: At the end of the day people just need to be getting used to the new normal which is exactly what's happening and it was a matter of fact last week.

Patrick Scholes: You know bookings nicely ahead year over year and not everything is the end all be all for year over year, but it's what we've talked about publicly.

Josh Weinstein: Particularly, to the point people were asking about close in, our close-in bookings last week for Q2, for literally sailing in Q2, we don't have that much to go, and the booking volume and pricing was just off the charts. We just got to let the world progress. We'll take what we want to take as we go, and carry out the year.

Patrick Scholes: And particularly to the point, where people were asking about close in our close in bookings last week for the second quarter for literally sailing in the second quarter. We don't have that much to go and the booking volume and pricing, but just off the charts.

Patrick Scholes: So we just got it.

Patrick Scholes: Let let the world progress and we will take what we wanted to take as we go and carry out the year.

Patrick Scholes: Okay. Thank you.

Speaker Change: Okay. Thank you.

Operator: Thank you. Our next question comes from the line of Jaime Katz with Morningstar. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Jamie Katz with Morningstar. Please proceed with your question.

Jaime Katz: Hey, good morning. I want to talk a little bit about the cadence of costs over the rest of the year. I think there were set to be higher dry docks in both Q2 and Q3 this year, and so as we think about the arc of expenses, can you help us sort of flow through whether those are more equal or if maybe that is more weighted to Q2, those dry docks? Thanks.

Jamie Katz: Hey, good morning, I wanted to talk a little bit about the cadence of cost over the rest of the year I think there were set to be higher dry docks.

Q2, and Q3 this year and so as we think about the arc of expenses can you help us sort of flow through whether those are more equal or if maybe that is more weighted to Q2 that was dry box. Thanks.

David Bernstein: As I had indicated on the December call, we had expected that both the Q2 and Q3 costs would be up a little bit more than the full year, and that the Q4 would be up a little bit less than the full year. Nothing's changed since then.

Jamie Katz: As I had indicated.

Jamie Katz: The December call, we gave you.

Jamie Katz: Expected.

Jamie Katz: The second and third quarter cost would be up a little bit more than the full year and the fourth quarter would be up a little bit less than the full year. So.

Jamie Katz: And nothing has changed since then.

Jaime Katz: Okay. As we think about the lengthening of the booking curve, I'm just trying to triangulate what the visibility looks like now relative to the past. I think historically it used to be that you guys were booked maybe 50% to 70% out for Q2 and then maybe 30% to 50% out for Q3. Has that decoupled a little bit and moved a little bit higher just so we could have more certainty on what the rest of the year looks like?

Jamie Katz: Okay.

Jamie Katz: And then as we think about the lengthening of the booking curve I'm just trying to triangulate what the visibility looks like now relative to the past I think historically it used to be that.

Jamie Katz: Guys weren't booked maybe like 50% to 70% out for Q2, and then maybe 30 to 50 per cent out for Q3, how is that.

Jamie Katz: Couple of a little bit and moved a little bit higher just so we could have more certainty on what the rest of the year looks like.

David Bernstein: All of those numbers that I used to give for the current quarter and the next three, we are above the top end of all of those ranges. As a result, as Josh said, we're about 80% booked for the remainder of this year. If you took the top end of all the ranges, you would get an average of 70% for the rest of the year. We're at over the top end of all the ranges.

Jamie Katz: Yes.

Speaker Change: All of those numbers that they used to get for the next the current quarter in the next three we're above the top end of all of those ranges and so as a result, as Josh said.

Speaker Change: About 80% booked for the remainder of this year. If you took the top end of all of the ranges you'd be at it.

Speaker Change: Get an average of 70 for the rest of the year. So we're at the top end of or over the top end of all the ranges.

Jaime Katz: Excellent. That's really helpful. Thank you.

Speaker Change: Excellent that's very helpful. Thank you.

Operator: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Speaker Change: Okay.

Conor Cunningham: Hi, everyone. Thank you. You've been super clear on the strength of bookings, but I wanted to just maybe come back to the levers that you have if things did weaken. You talked about how you would work to achieve a lot of these results that are kind of flowing through. Again, it doesn't seem like it's a demand problem. At the end of the day, if things were to weaken, what cost levers do you think you have right now that could be low-hanging fruit if things were to deteriorate on some level? Thank you.

Speaker Change: Hi, everyone. Thank you you've been super clear on the strength of bookings, but.

Speaker Change: I wanted to just maybe come back to the law.

Speaker Change: Levers that you have if things did weaken you talked about how it would work.

Speaker Change: To achieve a lot of these results that are kind of falling through and again it doesn't seem like it's a demand problem, but like at the end of the day, if things were to weaken what cost levers do you think you have right now that could be low hanging fruit if things were to deteriorate on some level. Thank you.

Josh Weinstein: Well, good morning. The best lever we probably have is, if the world takes a turn, we don't hedge. Because we don't hedge on commodities, generally speaking, commodities turn with that world. There's a natural hedge in our business by the basis of how we run it. Look, we clearly can do a lot of things if we really choose or need to do that. Our first goal is deliver the results that we want to deliver because we think that's the right thing for the business, right? The guest experience that we want to give, the investments that we want to make for the long term, not just for the short term. Everything is always looked at pretty critically to decide what makes sense in the current environment, because the world does change.

Speaker Change: Well good morning.

Speaker Change: The the best lever, we probably have as you know if if the world takes a turn we don't hedge because we don't hedge on commodities generally speaking commodities turn with that world.

Speaker Change: And so there's a natural hedge in our business by by the basis of how we run it.

Speaker Change: But we clearly can do a lot of things, if we really choose or need to do that.

Speaker Change: Our first goal is to deliver the results that we want to deliver because we think that's the right thing for the business right. The guest experience that we want to give.

Speaker Change: The investments that we want to make for the long term not just for the short term.

Speaker Change: But everything is always looked at pretty critically to decide what makes sense in the current environment because the world does change and.

Josh Weinstein: We've clearly got room, should we need to make a lot of changes depending on what that circumstance could be.

Speaker Change: And we've clearly got room should we need to make a lot of changes depending on what that circumstance could be.

Conor Cunningham: Okay. I think a big part of the plan this year, and over the next couple of years as supply is a little bit limited for you guys, has been to push marketing spend and to drive improved revenue quality and so on. Could you just talk a little bit about how that strategy's playing out right now? It seems like it's working, but the two levers that I think from a revenue management standpoint are just inventory and marketing. If you could just talk about the balance of those two going forward, that would be helpful. Thank you.

Speaker Change: Okay, and then I think a big part of the plan this year.

Speaker Change: Over the next couple of years.

Speaker Change: Supply is a little bit limited for you guys has been to push marketing spend and to drive improved.

Speaker Change: Improved revenue quality and so on so could you just talk a little bit about how that strategy is playing out right now it seems like it's working but I just did the two levers that I think from a revenue management standpoint, or just like inventory and marketing. So if you could just.

Speaker Change: Talk about the balance of those two going forward that'd be helpful. Thank you.

Josh Weinstein: Yes. No, thanks very much. We've talked about it. We've strategically been changing our investment approach when it comes to things like advertising. We're spending much more on a per unit basis than we did back 5, 6 years ago. Still, a good amount less than many others in the vacation and leisure space. We think we're getting the balance right. As far as is it working? Look, Q1 just ended. Our yields over the last 2 years are up 24%. I think that's probably a pretty good indication that it is working. Also that you don't need new builds to drive that demand, because the vast majority of our brands don't have any. That's same ship sales, if you will.

Speaker Change: Yes, no. Thanks, very much yeah, we've talked about it we've strategically been changing our investment approach when it comes to things like advertising, we're spending much more on a per unit basis than we did back.

Speaker Change: Five six years ago.

Speaker Change: And still.

Speaker Change: A good amount less than many others in the vacation and leisure space. We think we're getting the balance right as far as you know is it working.

Speaker Change: You know look first quarter just ended our yields over the last two years are up 24%.

Speaker Change: I think that's probably a pretty good indication indication that it is working and also that you don't you don't need new builds to drive that demand because the vast majority of our brands don't have any so that same ship sales.

Speaker Change: Sales if you will.

Josh Weinstein: That goes to how we manage the curve on the yields, the advertising that we do, both the creative, top of funnel type of things, and then the digital performance, our relationships with the trade, and then delivering on board. I think the brands are doing an incredible amount of work to make that happen, and I do think advertising helps unlock that. We have unleashed it while maintaining the cost structure that we think is appropriate.

Speaker Change: It goes to how we manage the curve on the on the on the yields the advertising that we do both the creative top of funnel type of things and then the digital performance our relationships with the trade and then delivering on board and I think the brands are doing an incredible.

Speaker Change: The amount of work to make that happen and I do think advertising helps unlock that and so we've we have unleashed it while maintaining the cost structure that we think is appropriate.

Conor Cunningham: Appreciate it. Thank you.

Speaker Change: I appreciate it thank you thank.

Josh Weinstein: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

David Katz: Hi. Good morning, well done all around. I wanted to just bring forth a debate that we have a lot. Is there any evidence that is shareable around any of the bookings from consumers trading down? We assume that there's some trading down to the value of a cruise versus the much more expensive hotels, particularly domestically. Potentially, some that are maybe priced out of a cruise that may be at a different end of the spectrum. Is there anything that we can discuss or unpack there?

David Katz: Hi, good morning.

Speaker Change: And well done all around I wanted to.

David Katz: Just bring forth a debate that.

David Katz: We have a lot and is there any evidence that is shareable around.

David Katz: Any of the bookings from consumers trading down right.

David Katz: Alright.

David Katz: We assume that there is some trading down to the value of our crews versus the much much more expensive hotels, particularly domestically.

David Katz: Potentially.

David Katz: Better may be priced out of our crews that may be at a different ends of the spectrum is there anything that we can discuss or unpack there.

Josh Weinstein: I think there's two separate questions. First, the concept of trading down to a cruise. I'd look at it differently. I'd say that we have a tremendous price-to-experience ratio compared to land. People recognize that value more and more if they're looking to make the dollar go further. Even though it pisses me off when we look at the price gap because there's so much opportunity for us that I'm excited about, in those types of times, that is a huge strength that we have because we can outperform the experience we give for the price that we charge compared to land. The fact that we're carrying more new-to-cruise than we ever have. New-to-cruise, the growth rate for Q1 alone was significantly multiple times higher than the growth rate on the capacity. It's working.

David Katz: So I think that's two separate questions. So first the concept of a core trading down to a cruise.

David Katz: I'd look at it differently I would say that we have a tremendous price to experience ratio compared to land.

David Katz: And people recognize that value more and more if they're looking to make the dollar go further.

David Katz: And even though it Pisses me off when we look at the price gap because theres, so much opportunity for us and I'm excited about.

David Katz: And those types of times that is a huge strength that we have because we can outperform the experience we give for the price that we charge compared to land.

David Katz: As far as the fact that we're carrying more new to cruise than we ever have.

David Katz: New to cruise the growth rate for Q1 alone was significantly mulch.

David Katz: Multiple times higher than the growth rate on the capacity so it's working.

Josh Weinstein: As far as trading down within cruise, there's nothing that we see because our brands have a pretty good mix within themselves to be able to cater to people at lots of different price points. We talk about Carnival a lot, and people have concerns about Carnival because of X, Y, Z and consumer. Keep in mind, Carnival's got suites on AIDA's, which are very different from inside cabins on three-nighters. We have a lot of product to be able to source lots of folks brand by brand up and down the price points.

David Katz: As far as trading down within cruise Theres, nothing that we see because our brands have a pretty good.

David Katz: Mix within themselves to be able to cater to people at lots of different price points, we talk about carnival, a lot and people have concerns about carnival because of X y Z in consumer keep in mind Carnival's got suites eight.

David Katz: Eight days, which are very different from inside cabins on <unk>. So we have a lot of product to be able to source lots of folks brand by brand up and down the price points.

David Katz: Uh huh.

David Katz: I'll apologize for the word choice about trading down.

David Katz: Oh I apologize for the word choice about trading down.

Josh Weinstein: I appreciate it.

David Katz: But.

David Katz: I-

Josh Weinstein: Thank you very much.

David Katz: Alright, Thank you very much okay.

David Katz: Okay. My quick follow-up is that the sale of the Seabourn ship at a gain, can you just elaborate on the reasoning behind that and the timing of it? Just a little insight. Thank you.

David Katz: My quick follow up.

David Katz: Is that the sale of the seaborne ship at a gain.

David Katz: Can you just elaborate on that.

David Katz: The reasoning behind that and the timing of it.

David Katz: Just a little insight. Thank you yeah yeah.

Josh Weinstein: Yeah. It's actually pretty simple. We got a cash offer that when I looked at that offer versus what I thought the impact would be for that ship over an appropriate amount of time and what the impact would be on the rest of that fleet and its ability to manage its yields, it was a decision that was in the best interest of the shareholders. It's as simple as that. Nothing's for sale. We don't have a for sale sign up, but if people are approaching us unsolicited for offers, I'll listen. If it's the right thing to do for the shareholders, then we'll do it. That doesn't happen very often, but that was one of these cases.

David Katz: It's actually pretty simple, we got a cash offer that when I looked at that offer versus what I thought the impact would be for that ship over an appropriate amount of time and what the impact would be on the rest of that fleet and its ability to manage yields.

David Katz: If it was a decision that was in the best interest of the shareholders.

David Katz: It's as simple as that you know nothing is for sale, we don't have a for sale sign up but if people are approaching us unsolicited for offers all listen.

David Katz: And if it's the right thing to do for the shareholders.

David Katz: And we will do it or not was it doesn't happen very often but that was one of these cases.

David Katz: Appreciate it. Thanks very much.

David Katz: I appreciate it thanks very much yeah, I would just say seaborne is a phenomenal brand. We are talking about one of the youngest fleets around the world Ultra luxury and there and they are going gangbusters. So the yields are up nicely like theres nothing wrong other than the fact that somebody.

Josh Weinstein: Yeah. I'll just say Seabourn is a phenomenal brand. We are talking about one of the youngest fleets around the world, ultra-luxury, and they are going gangbusters. The yields are up nicely. There's nothing wrong other than the fact that somebody made us an offer that we couldn't refuse.

Speaker Change: Made us an offer that we couldn't refuse.

David Katz: Got it. Thanks a lot.

David Katz: Got it thanks a lot.

Josh Weinstein: Thanks.

David Katz: Yes.

Operator: Thank you. Our next question comes from the line of Matthew Boss with JP Morgan. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Matthew Boss with Jpmorgan. Please proceed with your question.

Matthew Boss: Great. Thanks. Josh, close in demand off the charts, no slowdown in onboard spend in the last few weeks. It seems like the near term is crystal clear. Maybe multi-year, could you elaborate on new customer acquisition that you're seeing across the portfolio, maybe tied to the new marketing that you cited and walked through? Just structural improvement opportunities that you see across your brands, given the portfolio approach that you have.

Speaker Change: Great. Thanks, So Josh close in demand off the charts no slowdown in onboard spend in the last few weeks. It seems like the near term is crystal clear. So maybe multiyear could you elaborate on new customer acquisition that youre seeing across the portfolio, maybe tied to the new marketing that you that you.

Speaker Change: Site in and and walked through and just structural improvement opportunities that you see across your brands given the portfolio approach that you have.

Josh Weinstein: Yeah. With respect to guest composition, it's actually a pretty interesting place now. Because effectively, with no growth on the horizon, every brand has the same capacity that they have year over year, which means we're not trying to fill new capacity and cast the net wider for purposes of just needing more bodies. The idea of first-time cruisers, brand switchers, and loyalists, it really becomes a dynamic of who's willing to pay the most to get on the ship. Yes, we have been ramping up first-timers, which I think is a testament to the brand strengths and the marketing that they've been doing and the experiences that they give. Ultimately, though, it's going to really be a matter of getting that optimal mix based on the price points and what generates the most revenue.

Speaker Change: Yes, so with respect to gas composition, you know where it is.

Speaker Change: Actually a pretty interesting place an outright because effectively.

Speaker Change: With no growth on the Horizon every brand has the same capacity that they have year over year, which means it's if we're not trying to fill new capacity and cast the net wider for purposes of just needing more bodies.

Speaker Change: And so the idea of first time cruisers brand switchers and loyalists, it really becomes a dynamic of who's willing to pay the most to get on the ship.

Speaker Change: And so yes, we have been ramping up first timers, which I think is a testament to the to the brand strengths in the marketing that they've been doing in the experiences that they give.

Speaker Change: Ultimately, though ultimately it's going to really be a matter of getting that optimal mix based on the price points and what generates the most revenue I think it's also useful over the next couple of years.

Josh Weinstein: I think it's also useful, over the next couple of years, it's extreme slowdown for us in capacity growth, but the industry overall is slowing its growth rate. I think that certainly doesn't hurt us. It helps us. With respect to your second question, could you just elaborate a little bit more on what you were thinking?

Speaker Change: Extreme slowdown for us and capacity growth, but the industry overall is slowing.

Speaker Change: Its growth rate. So so I think that there is.

Speaker Change: That certainly doesn't hurt us it helps us.

Speaker Change: With respect to your second question could you just elaborate a little bit more on what you were thinking.

Matthew Boss: Yeah. Just with the new marketing, what you're seeing in terms of new customers as well as brands that maybe haven't returned to 2019 metrics. Just the next leg of opportunity that you have relative to maybe others in the industry if we remain at robust levels.

Speaker Change: Just with the new marketing, what Youre seeing in terms of new customers as well as brands that maybe haven't returned to 2019 metrics. Just the next leg of opportunity that you have relative to maybe others in the industry. If we remained at robust levels.

Josh Weinstein: Yeah. Our brands are on a spectrum from having recovered past 2019 levels to not yet there. Some of that has to do, as you've heard me say in the past, was what their 2019 levels were to begin with. We're not patting ourselves on the back in some cases because they exceeded 2019 levels because they should have been higher then, and they are now with plenty of runway. I would say the vast majority of our brands have, if we boil it down to ROIC, the vast majority of our brands have multiple points in the medium term that they're going to be able to take advantage of. Primarily, that's going to be due to continuation on the improvement we've been making on the revenue side. That's what the trajectory is for those brands.

Speaker Change: Our brands are on our on our spectrum from <unk>.

Speaker Change: Having recovered past 19 level to not yet there some of that has to do as you've heard me say in the past was what Theyre 19 levels were to begin with.

Speaker Change: And so we're not patting ourselves on the back in some cases, because they exceed the 2019 levels because they should have been higher than than they are now with plenty of runway I would say the vast majority of our brands have.

Speaker Change: If we boil it down to Iraq, the vast majority of our brands.

Speaker Change: Multiple points.

Speaker Change: And in the medium term that we're going to be able to take advantage of and primarily that's gonna be due to continuation on the improvement we've been making on the revenue side.

Speaker Change: And Thats, what the direct the trajectory is for those brands they are making jumped by leaps and bounds and they've got a lot more to go and I am excited about that.

Josh Weinstein: They are making jumps by leaps and bounds, and they've got a lot more to go. I am excited about that.

Matthew Boss: Great. David, maybe just to switch gears, on your goal to return to the fortress balance sheet, how are you thinking about capital allocation priorities beyond debt paydown as you approach investment grade metrics?

Speaker Change: Great and then David maybe just to switch gears on your goal to return to the fortress balance sheet. How are you thinking about capital allocation priorities beyond debt pay down as you approach investment grade metrics.

Josh Weinstein: As Josh said before, into the immediate, debt paydown is priority one, two, and three. As I had indicated in my remarks, we're talking about potentially a $5 billion additional paydown. When you start thinking about 2026, we should be beyond investment grade metric leverage. As a result of that, not only are we investing in ourselves in all the examples that Josh gave, but we will be considering other priorities. We'll be talking about that as we move forward into 2026 and beyond.

Speaker Change: So as Josh said before.

Speaker Change: In the immediate.

Speaker Change: Debt pay down is priority, one two and three but it indicated.

Speaker Change: Remarks, we're talking about a potentially.

Speaker Change: Potentially a $5 billion additional pay down and when you start thinking about 2026, we should be beyond investment grade metrics leverage and so as a result of that will be you know not only are we investing in ourselves and all the examples that Josh Gabe.

Speaker Change: We will be considering other priorities and we'll be talking about that as we move forward into 2026 and beyond.

Matthew Boss: Great. Congrats on the continued momentum.

Speaker Change: Great Congrats on the continued momentum.

Josh Weinstein: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from the line of Lizzie Dove with Goldman Sachs. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Lizzie Dove with Goldman Sachs. Please proceed with your question.

Lizzie Dove: Hi there. Thanks so much for taking the question, and congrats on a great Q1. I guess going back to luxury for a second, you have Seabourn, you have Cunard. Obviously, the last few weeks we've had mixed commentary from other cruise companies about luxury. Curious just to zoom in on that. Anything you would kind of flag there and what you're seeing on the luxury trends specifically?

Lizzie Dove: Hi, guys. Thanks, so much for taking the question and congrats on a great Q1, I guess going back to luxury for a second you know you have seaborne you have Cunard obviously the last few weeks, we've had mixed commentary from other companies about luxury curious just to zoom in on that anything you would kind of slack there and what you're seeing on the law.

Speaker Change: Retrans specifically.

Josh Weinstein: Yeah. Morning, Lizzie. Nothing interesting to talk about, I don't think. As you heard me say, Seabourn's been making great progress year-over-year, as has Cunard. Yeah. I'm sorry. Just I guess the answer's no. Short and sweet.

Speaker Change: Yes, good morning.

Speaker Change: Nothing nothing interesting to talk about I don't think as you heard me say seaborne has been making great progress year over year as as Qunar. So yeah I'm sorry.

Speaker Change: I guess the answer is no.

Speaker Change: So short and sweet.

Lizzie Dove: That's great to hear. I guess totally switching gears for a second, I'll ask about Celebration Key. You're now through most of Wave season. Curious just what you've been seeing there, how much the kind of consumer reception has been to the marketing you put around that, whether you're still on track to kind of open right at the end of summer. Just any updates you can give around that would be helpful. Thanks.

Speaker Change: That's great to hear and I guess totally switching gears for a second I'll ask about celebration key I mean, you know through massive wave season, I'm curious just what you've been seeing that how much the kind of consumer reception has been to that marketing you put around that whether you're still on track to kind of opened right at the end of semi just any updates you can.

Speaker Change: Give around that would be helpful. Thanks.

Josh Weinstein: Yep. Thanks. Yep. No, first of all, from an operational standpoint, everything is proceeding exactly on track, and the teams are doing a phenomenal job, not only in the finishing up of the construction, but in the massive undertaking that is training and getting ready on the land-based operations themselves to be able to deliver the experiences that we want to deliver. We are seeing the premiums that we expected to see when we started this project a long time ago. Things are progressing honestly exactly as planned, which is a shout-out to the teams for doing all the right things.

Speaker Change: Yes, yes.

Speaker Change: No first of all from an operational standpoint.

Speaker Change: Everything is proceeding exactly on track and the teams are doing a phenomenal job not only in the finishing up of the construction, but in the the massive undertaking that is training and getting ready on the land based operations themselves to be able to deliver the experiences that we want to deliver.

Speaker Change: We are.

Speaker Change: Seeing the premiums that we expected to see.

Speaker Change: When when we started this project a long time ago.

Speaker Change: So things are progressing exactly I honestly exactly as planned which is a which is a shout out to the teams for doing all the right things.

Lizzie Dove: Great. Thank you.

Speaker Change: Great. Thank you.

Josh Weinstein: Thanks, Lizzie.

Excellent.

Operator: Thank you. Our next question comes from the line of Vince Ciepiel with Cleveland Research. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Vince <unk> with.

Speaker Change: Cleveland Research. Please proceed with your question.

Vince Ciepiel: Thanks. I wanted to lean a little bit more into land there. When would you expect the Celebration Key to kind of be the peak noticeability in your booking surge in light of how that Carnival product books, the opening and awareness of the island? Additionally, I know this is the new part of your land portfolio, but you have quite a sizable footprint already. I know there's expansion with, I think it's Half Moon Cay, Pier, an investment into the Alaska part of the portfolio. How are you thinking about your opportunity in the land stuff in years ahead?

Vince: Thanks, I wanted to lean a little bit more into land there.

Speaker Change: What would you expect the celebration key to kind of be.

Speaker Change: Peak.

Speaker Change: Notice ability in your bookings surge them up in light of how that carnival product books, the opening and awareness of the island and then additionally.

Speaker Change: This is a new part of your land portfolio, but you have quite a sizable footprint already I know theres expansion with.

Speaker Change: I think it's half Moon Cay tier and investment into the Alaska part of the portfolio. How are you thinking about your opportunity in the land stuff in years ahead.

Josh Weinstein: Yeah, thanks. Thanks, Vince. A bunch of questions there. As far as the impact of Celebration Key, I think it's pretty fascinating because we're still in make-believe land, right? Everything we're putting out on the marketing side really is in the imagination. I think that coupled with, as you said, the primary tenant there is going to be Carnival Cruise Line, a huge amount of which is short cruises, 3, 4, 5-nighters that have a much shorter window than booking on the 7s and 8s, means that we haven't seen, by any stretch of the imagination, we haven't seen the full impact. Carnival hasn't seen the full impact on the benefits.

Speaker Change: Yeah. Thanks.

Speaker Change: Thanks, Ben So a.

Speaker Change: A bunch of questions there so as far as the impact of celebration I think it's pretty fascinating.

Speaker Change: We're still a make believe land right. So everything we're putting out and on the marketing side really is in the imagination.

Speaker Change: And I think.

Speaker Change: That coupled with as you said the primary tenant there is gonna be carnival cruise line, a huge amount of which is short cruises three four or five nighters that have a much shorter window than booking on the seventh and eighth.

Speaker Change: Means that we haven't seen the Miami.

Speaker Change: By any stretch of imagination, we haven't seen the full impact of carnival hasn't seen the full impact on the benefits and I do think.

Josh Weinstein: I do think the ability to leverage it in operations and generate content and guest experience with our guests, with the trade is going to be a springboard forward, which is a great thing for Celebration Key. We easily see a path where, by the end of the decade, what was about six and a half million guests going through our Caribbean footprint in 2024, could be upwards of 11 million, which is a phenomenal thing. I think the thing that we're learning, which we haven't really benefited from in full, is how we brand and position our destinations themselves to make them part of the consideration set of the consumer. Because historically, it's very much been about just the cruise and the brand and then delight them when they're in our destination.

Speaker Change:

Speaker Change: The ability to the ability.

Speaker Change: We need to leverage in operations and generate content and guest experience with our guests with the trade is going to be a springboard forward.

Speaker Change: Which is which is a great thing for them for celebration, we we easily see a path where you know by the end of the decade.

Speaker Change: Was about $6 5 million gas flowing to our Caribbean footprint in 2024 could be upwards of $11 million.

Speaker Change: Which is which is a phenomenal thinking I think the thing that we're learning, which we haven't really benefited from unfold is how we position, how we brand and position our.

Speaker Change: Our our destinations himself to make them part of the consideration set of the consumer.

Speaker Change: Because historically it has very much been about just the crews and the brand and then delight them when they're in our destination, but we have the ability to make it a driver for taking the crews to begin with and so we're we're starting to lean into that obviously with celebration key and were going to do more of that in celebration key is something that you know.

Josh Weinstein: We have the ability to make it a driver for taking the cruise to begin with. We're starting to lean into that, obviously, with Celebration Key, and we're going to do more of that. Celebration Key is something that when we open, that's just phase one. We've got plans that'll take us through the end of the decade to be able to significantly increase that throughput, which as I mentioned, helps us drive that guest count up to about $11 million. With respect to Alaska, if you haven't been there, I strongly suggest you've got to do it by cruise. If you do it, you have to do a cruise land-sea package, because that is the greatest way to see the great state.

Speaker Change: When we when we open that's just phase one.

Speaker Change: And we've got plans that will take us through the end of the decade to be able to significantly increase that throughput, which as I mentioned and helps us drive that guest count up.

Speaker Change: About $11 million.

Speaker Change: With respect to with respect to Alaska.

Speaker Change: Look we if you haven't been there I strongly suggest you've gotta do it by cruise and if you do it you have to do a cruise land sea package because that is the greatest way to see the great state.

Josh Weinstein: It is a strategic advantage that we do have given the scope of our operations in Alaska, and we're going to continue to lean into that because it is one of the most popular itineraries and programs that we have in the whole portfolio.

Speaker Change: And it is a strategic advantage that we do have given the scope of our operations in a lab in Alaska, and we're going to continue to lean into that because it is one of the most popular itineraries and programs that we have in the whole portfolio.

Speaker Change: Uh huh.

Vince Ciepiel: Great. I wanted to sneak one more in. You mentioned a little bit earlier on the European business. In the travel industry more broadly right now, there's a lot of talk on inbound, outbound for the US. I know that you source a fair amount of your European brands in Europe, and I would imagine a lot of the North American brands heavily over-index to North American guests. Anything that you've seen in your data on any shift in flow of inbound interest to the US, and if that at all is a big part of your business?

Speaker Change: Great I wanted to sneak one more in you mentioned a little bit earlier on the European business in the travel industry more broadly right now theres a lot of talk on inbound and outbound.

Speaker Change: For the U S and I know that you source a fair amount of your European brands in Europe, and I would imagine a lot of the north American brands heavily over indexed to North American guests, but anything that you've seen in your data.

Speaker Change: The shift in flow of inbound interest to the U S and if that at all as a big part of your business.

Josh Weinstein: Well, I guess I'll answer it in reverse. Is it a big part of our business? No, it's not a huge part of our business. We strategically try to put our ships where our guest base is. I think, in the volatility that we talked about in Q1, certainly Canada was swept up in that. Now for us, that's 3% to 4% of our business, just to put it into context. Clearly everybody reads the news, and we're not immune from that dynamic. Going back to the strategy, by being able to target specific countries with specific brands that cater to their needs and preferences and position them where people can get to drive if they want to, it's a recipe for success for us in this environment.

Speaker Change: Well I guess I'll answer it in reverse is it a big part of our business.

Speaker Change: It's not a huge part of our business.

Speaker Change: We strategically try to put our ships, where our guest base is.

Speaker Change: I think.

Speaker Change: And the volatility that we talked about in the first quarter.

Speaker Change: Certainly Canada were swept up in that enough for us that's 3% to 4% of our business just to put it into context, but clearly we read that you're you know everybody reads of news and we're not we're not immune from from from that dynamic, but going back to the strategy by being able to target specific countries with specific brands.

Speaker Change: Cater to their needs and preferences and position them where people can get to.

Speaker Change: Drive if they want to it's a recipe for success for us in this environment.

Vince Ciepiel: Great, thanks.

Speaker Change: Great. Thanks.

Josh Weinstein: Thanks. Operator, we have time for one more.

Speaker Change: Operator, we have time for one more.

Operator: Thank you. Our final question comes from the line of Christopher Stathoulopoulos with SIG. Please proceed with your question.

Speaker Change: Thank you. Our final question comes from the line of Chris Stifel I suppose with <unk>. Please proceed with your question.

Christopher Stathoulopoulos: Good morning, Josh, David, team. Thanks for taking my question. I'm going to close it out. I'll keep it to one and hopefully try to, I guess, consolidate here the questions around demand, because I think at least the questions I'm getting here, investors are trying to tease out the health of the consumer and whether any weakness at this point is localized to a specific consumer demographic or region. If we use the airlines here as a proxy, there was a comment earlier on the call. Last week, US domestic basic economy closed in weakness, exact opposite of what you're seeing here. What is similar, it sounds like premium international demand similar.

Speaker Change: Good morning, Josh David team. Thanks for taking my question, so I'm going to close it out I'll keep it to one.

Speaker Change: And hopefully try to I guess consolidate here.

Speaker Change: The question is around the math because I think it's the questions I'm getting here you know investors are trying to tease out the health.

Speaker Change: Of the consumer and whether any weakness at this point is localized to a specific consumer demographic regions. So if we use the airlines here as a proxy there was a comment earlier on the call.

Speaker Change: Last week U S domestic basic economy close in weakness.

Speaker Change: Opposite of what you're seeing here.

Speaker Change: What is similar it sounds like premium international.

Speaker Change: Demand is similar so as we look across your brand scale from contemporary premium luxury and we adjust for mix shifts.

Christopher Stathoulopoulos: As we look across your brand scale from contemporary, premium, and luxury, and we adjust for mix shifts, the earlier question on regional source of travelers, is there anything that is different or unique with the pace of bookings or onboard spend at this point?

Speaker Change: The earlier question a question on regional source travelers.

Speaker Change: Anything that is different or unique with the pace of bookings were onboard spend.

Speaker Change: At this point.

Josh Weinstein: I guess consolidated question, the short answer is no. Just keep in mind, airlines come out with a lot of commentary. We are different from airlines and even different from hotels. We don't rely on business. Business travel is not part of our portfolio. It is about the consumer and good times and bad times, people take vacations. The unemployment rate in this country and the developed countries that we really source from are fantastically low. Does it mean that people want to think hard about how they spend their vacation dollar? Absolutely. Is it more important when times are stressful that they get away and take a vacation? Does it mean more to them? Absolutely. I think we've learned that since the turn of this decade, how much importance people place on it.

Speaker Change: So I guess consolidated question the short answer is no.

Speaker Change: Just keep in mind, where airlines come out with a lot of commentary.

Speaker Change: Commentary, we are different from airlines and even different from hotels, we don't rely on business business travel is not part of our portfolio.

Speaker Change: Folio so it too it is about the consumer and good times and bad times people take vacations.

Speaker Change: The unemployment rate in this country in the developed countries that we really sourced from our fantastically low.

Speaker Change: So does it mean that people want to think hard about how they spend their vacation dollars absolutely.

Speaker Change: Is it more important when times are stressful that they'd get away and take a vacation does it mean more to them absolutely and I think we've learned that since the turn of this decade.

Speaker Change: How much how much importance people people place on it so.

Josh Weinstein: I think we are resilient, and we'll continue to work hard to deliver. Since you said it was one question, thank you for doing what I asked. I think we'll end it there. Thanks, everybody, and talk to you next quarter.

I think we are resilient and will continue to work hard to deliver so since you said it was one question. Thank you for.

Speaker Change: Doing what I asked.

Speaker Change: Well, we'll end it there so thanks, everybody and talk to you next quarter.

Operator: It's now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you, Beth. You may begin.

Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: [music].

Speaker Change: Greetings and welcome to the Carnival Corporation and plc conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Speaker Change: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded its now my pleasure to introduce your host Beth Roberts Senior Vice President Investor Relations. Thank you Beth you may begin.

Beth Roberts: Thank you. Good morning, and welcome to our Q1 2025 Earnings Conference Call. I'm joined today by our CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein, and our Chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the forward-looking statement in today's press release. All references to ticket prices, yields, and cruise costs without fuel will be in constant currency unless otherwise stated. References to yields will be on a net basis. References to cruise costs without fuel, EBITDA, net income, and ROIC will be on an adjusted basis unless otherwise stated. All of these references are non-GAAP financial measures defined in our earnings press release.

Speaker Change: Thank you good morning, and welcome to our first quarter 2025 earnings Conference call I'm joined today by our CEO, Josh Weinstein, Our Chief Financial Officer, David Bernstein, and I Chair Micky Arison before we begin please note that some of our remarks on this call will be forward looking therefore, I will refer you to the forward.

Speaker Change: <unk> statement in today's press release, all references to ticket prices, yes, and cruise costs without fuel will be in constant currency unless otherwise stated references to yields will be on a net basis references cruise costs without fuel EBITDA net income and our I C will be on an adjusted basis.

Speaker Change: Unless otherwise stated all of these references are non-GAAP financial measure as defined in our earnings press release.

Beth Roberts: A reconciliation to the most directly comparable US GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our investor presentation. Please visit our corporate website, where our earnings press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Speaker Change: Reconciliation to the most directly comparable U S GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our Investor presentation.

Speaker Change: Please visit our corporate website, where our earnings press release and Investor presentation can be found with that I'd like to turn the call over to Josh.

Josh Weinstein: Thanks, Beth. Once again, we delivered a fantastic quarter, this time hitting Q1 high-water marks for revenue, EBITDA for ALBD, operating income, and customer deposits. Net income came in more than $170 million better than guidance as we outperformed across the board, led by incredibly strong demand throughout our portfolio. We achieved a robust 7.3% yield increase, smashing our yield guidance on top of last year's 17% yield improvement. Both ticket and onboard equally outperformed on very strong close-in demand, which speaks to the strength of our consumer. Unit costs also came in better than expected, mainly due to timing between the quarters. This resulted in a near doubling of operating income for the quarter and EBITDA that reached $1.2 billion, approaching a 40% year-over-year increase. Operating margins and EBITDA margins each improved over 400 basis points year-over-year with both of these now surpassing 2019 levels.

Josh: Thanks Beth.

Josh: Once again, we delivered a fantastic quarter. This time hitting first quarter high watermarks for revenue.

Josh: EBITDA EBITDA for a L B D operating income and customer deposits.

Josh: Net income came in more than $170 million better than guidance as we outperformed across the board led by incredibly strong demand throughout our portfolio.

Josh: We achieved a robust seven 3% yield increase.

Josh: Matching our yield guidance on top of last year's 17% yield improvement.

Josh: Both ticket and onboard equally outperformed them very strong close in demand, which speaks to the strength of our consumer.

Josh: Unit costs also came in better than expected, mainly due to timing between the quarters.

This resulted in a near doubling of operating income for the quarter.

Josh: And EBITDA that reached $1.2 billion approaching a 40% year over year increase.

Josh: Operating margins and EBITDA margins, each improved over 400 basis points year over year with both of these now surpassing 2019 levels.

Josh Weinstein: Despite heightened macroeconomic and geopolitical volatility since providing our December guidance, we are taking up yields by 0.5 point to 4.7% based on our strong Q1 results while affirming yield expectations for the remainder of the year. In addition, David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone. Combined, this successful execution has enabled us to take up our earnings guidance for the year by $185 million. 2025 remains on track to be another very strong year for our brands with yield growth far outpacing historical growth rates and nicely exceeding unit cost growth, delivering approximately $600 million incrementally to the bottom line, more than a 30% improvement from 2024, that is essentially on flat capacity growth.

Josh: For the full year, and despite heightened macroeconomic and geopolitical volatility since providing our December guidance, we are taking up yields by half a point to 4.7% based on our strong first quarter results, while affirming yield expectations for the.

Josh: The remainder of the year.

Josh: In addition.

Josh: David and our finance team stepped up our refinancing efforts, which will bring another approximately $100 million to the bottom line this year alone.

Josh: Combined this successful execution has enabled us to take up our earnings guidance for the year by $185 million.

Josh: 2025 remains on track to be another very strong year for our brands with yield growth far outpacing historical growth rates and nicely exceeding unit cost growth delivering approximately $600 million incrementally to the bottom line.

Josh: More than a 30% improvement from 'twenty to 'twenty, four and that is essentially flat capacity growth.

Josh Weinstein: Achieving our March guidance will also result in reaching both of our 2026 SEA Change financial targets 1 year early with ROIC hitting 12% and EBITDA per ALBD more than 50% higher than just 2 years ago, taking each of these 2 metrics to levels not seen in the better part of 20 years. At the same time, we're also closing in on our 2026 greenhouse gas target with an over 19% reduction in carbon intensity compared to 2019. We're generating demand well in excess of our very limited inventory remaining, which has been driving strong pricing for the remainder of the year while also building demand for future years. In fact, we're at historical high prices across all core programs for 2025 and all quarters of the year, while booking volumes for 2026 sailings and beyond taken during the Q1 also reached an all-time high.

Josh: Achieving our March guidance will also result in reaching both of our 2026 C change financial targets, one year early with borrow I see hitting 12% and EBITDA per a L. B D more than 50% higher than just two years ago.

Josh: Taking each of these two metrics to levels not seen in the better part of 20 years at.

Josh: At the same time, we're also closing in on our 'twenty 'twenty six greenhouse gas targets with an over 19% reduction in carbon intensity compared to 2019.

We're generating demand well in excess of our very limited inventory remaining.

Josh: Which has been driving strong pricing for the remainder of the year, while also building demand for future years.

Josh: In fact.

Josh: We're at historical high prices across all core programs for 2020 five in all quarters of the year, while booking volumes for 2020 six sailings M beyond taken during the first quarter also reached an all time high.

Josh Weinstein: We were very well-positioned going into Wave this year, and we exited with over 80% of the year on the books at higher prices and with a booking curve that is still the farthest out on record. We have no plans to let up anytime soon. As we foreshadowed on the last call, we kicked off new marketing campaigns across all major brands during Wave season to fuel more broad-based consideration for cruise travel and keep the strong momentum going. Costa kicked up the volume at the Sanremo Music Festival among Italy's most renowned music events, which was watched by over two-thirds of Italy's television audience, featuring a live performance onboard Costa Toscana. Carnival Cruise Line was also a standout at the Oscars, selected along with a few other household names for a themed promo honoring stunt performers and featuring a daring skydive into a pool onboard Carnival Celebration.

Josh: We were very well positioned going into wave this year, and we exited with over 80% of the year on the books at higher prices and with the booking curve that is still the farthest out on record.

Josh: We have no plans to let up anytime soon.

Josh: As we foreshadowed on the last call, we kicked off new marketing campaigns across all major brands during wave season to fuel more broad based consideration for cruise travel and keep the strong momentum going.

Josh: Caustic ticked up the volume at the San Raimo Music Festival, among Italy's most renowned music events, which was watched by over two thirds of Italy's TV audience, featuring a live performance onboard Costa Toscano.

Josh: Carnival cruise line was also a standout at the Oscars selected along with a few other household names for a themed promo honoring stone performers and featuring a daring sky dive into a pool onboard carnival celebration.

Josh Weinstein: Of course, Carnival Cruise Line has clearly amped up the volume around Celebration Key, which was showcased while lighting the iconic New Year's Eve ball drop in Times Square and continued through the Super Bowl in New Orleans, featuring our celebrity chef partners Emeril Lagasse and Guy Fieri, as well as brand ambassador Shaquille O'Neal. These two events alone captured over 5 billion impressions across paid, earned, and owned media. Carnival's adorable Wave campaign, Flip: Lost in Paradise, was a hit, getting huge cut-through with marketing KPIs up across the board. If our marketing team managed to get that kind of traction around what is still computer-generated animation, I look forward to 4 months from now when all 5 portals built for fun at Celebration Key are open for our guests and can be showcased.

Josh: Of course Carnival cruise line has clearly amped up the volume around celebration key which was showcased while lighting the iconic new year's Eve ball drop in times square and continued through the Super Bowl in New Orleans, featuring our celebrity Chef partners, Emeril, Lagasse, and Guy Fieri as well as brand ambassador.

Josh: Or Shaquille O'neal.

Josh: These two events alone captured over 5 billion impressions across paid earned and owned media.

Speaker Change: And carnivals Adorable wave campaign flip lost in Paradise was a hits get a huge cut through with marketing kpis up across the board.

Speaker Change: If our marketing team managed to get that kind of traction around what is still computer generated animation I look forward to four months from now when all five portals built for fun at celebration key are open for our guests and can be showcased.

Josh Weinstein: We're on track for our July opening and executing our ramp-up plan into Q4 as our team settles into these new operations and focuses on delivering the kind of phenomenal experience our guests have come to expect from our exclusive destinations. RelaxAway Half Moon Cay is also on schedule for H2 2026. We've already begun to increase our marketing around this enhanced and rebranded jewel in the Caribbean. We'll have more to come on our plans to increase awareness and consideration for our brands as we leverage our underexposed portfolio of Caribbean destinations. Turning to Alaska, we just announced an expansion and renovation project to Denali Lodge, one of our nine owned and operated hotel properties, building on this unmatched strategic advantage for Holland America and Princess Cruises.

Speaker Change: We're on track for a July opening and executing our ramp up plan into the fourth quarter as our team settles into these new operations and focuses on delivering the kind of phenomenal experience. Our guests have come to expect from our exclusive destinations.

Speaker Change: Relax away half Moon Cay is also on schedule for the second half of 'twenty twenty-six we've.

Speaker Change: We've already begun to increase our marketing around this enhanced and rebranded jewel in the Caribbean.

Speaker Change: And we'll have more to come on our plans to increase awareness and consideration for our brands as we leverage our underexposed portfolio of Caribbean destinations.

Speaker Change: Turning to Alaska, We just announced an expansion and renovation project to Denali large one of our nine owned and operated hotel properties building on this unmatched strategic advantage for Holland America, and Princess cruises enhancements.

Josh Weinstein: Enhancements will include the addition of 120 new guest rooms and suites, room remodelings, additional food and beverage venues, and improvements to public spaces and nature trails. Our brand's land-sea packages are a huge draw for new-to-cruise guests and truly the best way to experience the greatness of Alaska. We also just completed the first of seven AIDA ships to undergo our AIDA Evolution program. AIDAdiva is now sailing from Rome, having just returned from a seven-week dry dock with many added features that our German guests have come to love on AIDA's newer vessels. This includes over half a dozen new bar and dining venues, new suites, and equipment upgrades to enhance fuel efficiency. AIDALuna will start her evolution later this year, followed by AIDAbella and AIDAmar in 2026. We also further progressed on optimizing our portfolio.

Speaker Change: Enhancements will include the addition of 120, new guest rooms and suites Roomba.

Speaker Change: Room remodeling additional food and beverage venues.

Speaker Change: And improvements to public spaces and nature trails.

Speaker Change: Our brands land sea packages are a huge draw for new to cruise guests and truly the best way to experience the greatness of Alaska.

Speaker Change: We also just completed the first of seven Aida ships to undergo our Aida evolution program I eat a diva is now sailing from Rome, having just returned from a seven week dry dock with many added features that our German guests have come to love and Aida is newer vessels. This is.

Speaker Change: Kluge over half a dozen new bar and dining venues, new suites and equipment upgrades to enhance fuel efficiency.

Speaker Change: I eat of Luna will start her evolution later this year, followed by Aida Bella and Itamar in 2026.

Speaker Change: We also further progressed on optimizing our portfolio.

Josh Weinstein: Just this month, we completed the sunsetting of our P&O Cruises Australia brand by folding its two remaining ships into Carnival Cruise Line. We also consolidated our Seabourn fleet with the sale of Seabourn Sojourn. While we were not actively looking to sell the ship, the offer was in the best interest of our shareholders. The sale leaves Seabourn well-positioned with a phenomenal fleet of three ultra-luxury ocean vessels and two recently launched ultra-luxury expedition ships, which comprises one of the most modern fleets in the industry, at an average age of just over seven years. Turning back to the business, and as you can see from our Q1 outperformance, onboard spending and booking levels, we have proven to be incredibly resilient to the volatility around the globe.

Speaker Change: Just this month, we completed the sunsetting of our piano cruises, Australia brand by folding its two remaining ships into carnival cruise lines.

Speaker Change: We also consolidated our Seabourn fleet with the sale of seaborne soldiering.

Speaker Change: Well, we were not actively looking to sell to ship.

Speaker Change: The author was in the best interests of our shareholders.

Speaker Change: The sale lease seaborne well positioned where they phenomenal fleet of three ultra luxury ocean vessels.

Speaker Change: And two recently launched ultra luxury expedition ships, which comprises one of the most modern fleets in the industry at an average age of just over seven years now turning back to the business and as you can see from our first quarter outperformance.

Speaker Change: Onboard spending and booking levels.

Speaker Change: We have proven to be incredibly resilient to the volatility around the globe.

Josh Weinstein: Having said that, even with our resilience and strong visibility, given that so much of 2025 is already on the books, we aren't taking the current backdrop lightly. We will be working hard to achieve these results. Thankfully, our team is nimble and agile, characteristics, as you know, we honed so well over the H1 of this decade, leaving us better positioned to manage through whatever comes our way. We have strong, well-recognized brands that are number 1 or 2 in every major market for cruise, often tailored specifically to phenomenal national markets such as the US, Germany, and the UK, markets that are deep and under-penetrated. We are delivering amazing vacation experiences every day in a time when people all over the world are placing increasing importance on experiences, particularly those spent with friends and family.

Speaker Change: Having said that even with a resilience and strong visibility given that so much of 2025 is already on the books, we arent taking the current backdrop lately.

Speaker Change: We will be working hard to achieve these results thankfully our team is nimble and agile characteristics as you know we honed so well over the first half of this decade, leaving us better positioned to manage through whatever comes our way.

Speaker Change: We have strong well recognized brands that are number one or two in every major market for cruise often tailored specifically to phenomenal national markets, such as the U S, Germany, and the U K markets that are deep and Underpenetrated.

Speaker Change: We are delivering amazing vacation experiences every day in a time when people all over the world are placing increasing importance on experiences, particularly those spent with friends and family.

Josh Weinstein: On top of that, we are still a ridiculously amazing value compared to land-based alternatives. While we have been chipping away at the price gap to land-based alternatives, the price-to-experience ratio of cruising versus those other options remains massively disproportionate. While somewhat frustrating, and while still a big opportunity over the coming years, this huge value for money is also truly a strength when people are looking to make their vacation $ go even further. It's about to get even better with the opening of Celebration Key, our marquee port in the Caribbean, which will give our guests yet another reason to come cruise with us. We have been making huge strides on rebuilding our financial fortress as we close in on investment-grade leverage metrics.

Speaker Change: And on top of that we are still a ridiculous Lee amazing value compared to land based alternatives.

Speaker Change: Well, we have been chipping away at the price gap to land based alternatives the price to experience ratio of cruising versus those other options remains massively disproportionate.

Speaker Change: While somewhat frustrating and while it's still a big opportunity over the coming years.

Speaker Change: It's huge value for money is also truly a strength when people are looking to make their vacation dollars go even further.

Speaker Change: And it's about to get even better with the opening of celebration key our marquee port in the Caribbean, which will give our guests yet another reason to come cruise with us.

Speaker Change: We have been making huge strides in rebuilding our financial fortress as we close in on investment grade leverage metrics.

Josh Weinstein: We have well-managed near-term maturity towers and no new ships for delivery in 2026, which gives us a good amount of headroom to continue paying down debt. In fact, we have just 3 ships on order over the next 4 years, further supporting our ability to reach investment-grade leverage metrics within 2026. Simply put, we are well-positioned for the future and are pushing forward with intention. I'll end by saying thanks to our travel agent partners, loyal guests, investors, destination partners, and other stakeholders who have contributed greatly to our results. Of course, a special thank you to each of our team members for driving outperformance once again.

Speaker Change: We have well managed near term maturity towers and no new ships for delivery in 2026, which gives us a good amount of headroom to continue paying down debt in fact.

Speaker Change: We have just three ships on order over the next four years further supporting our ability to reach investment grade leverage metrics within 20 twenty-six simply put we are well positioned for the future and are pushing forward with intention.

Speaker Change: I'll end by saying, thanks to our travel agent partners loyal guests investors destination partners and other stakeholders, who have contributed greatly to our results and of course, a special thank you to each of our team members for driving outperformance once again.

Josh Weinstein: Most important for our long-term success, thank you to each and every team member for delivering unforgettable happiness to our guests by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit, and life we touch. With that, I'll turn the call over to David.

Speaker Change: But most important for our long term success. Thank you to each and every team member for delivering unforgettable happiness to our guests by providing them with extraordinary cruise vacations.

Speaker Change: Honoring the integrity of every Osha, we sell place we visit and life we touch.

David Katz: With that I'll turn the call over to David.

David Bernstein: Thank you, Josh. I'll start today with a summary of our 2025 Q1 results. I will provide some color on our improved full-year March guidance. I'll finish up with an update of our refinancing and deleveraging efforts. Turning to the summary of our Q1 results. Net income exceeded December guidance by more than $170 million as we outperformed once again. The outperformance was essentially driven by three things. First, favorability in revenue worth $98 million as yields came in up over 7% compared to the prior year. This was 2.7 percentage points better than December guidance, driven by both close-in strength in ticket prices and strong onboard spending. Second, cruise costs without fuel per available lower berth day, or ALBD, were only up 1% compared to the prior year. This was 2.4 percentage points better than December guidance and was worth $65 million.

David: Thank you Josh I'll start today with a summary of our 2025 first quarter results.

David: Next I will provide some color on our improved full year March guidance.

David: Then I'll finish up with an update of our refinancing and deleveraging efforts.

David: Turning to the summary of our first quarter results net income exceeded December guidance by more than $170 million as we outperformed once again.

David: The outperformance was essentially driven by three things.

David: Favorability in revenue with $98 million as yields came in at over 7% compared to the prior year.

David: This was two seven points better than December guidance, driven by both close in strength in ticket prices and strong onboard spending.

David: Second cruise costs without fuel per available lower birthday, or a L. B day were only up 1% compared to the prior year.

David: This was two points four points better than December guidance and was worth $65 million.

David Bernstein: The favorability in cost was mainly due to the timing of expenses between the quarters. We did find some permanent savings, which flow through to the full year, which I will touch on later in my remarks. Third, favorability in interest expense of $13 million was driven by our refinancing efforts during the quarter. Yield improvement in Q1 versus the prior year was driven by improvements on both sides of the Atlantic from higher ticket prices and improved onboard spending. The improvement in ticket prices was broad-based across all core programs. The improvement in onboard spending, which accelerated from last quarter, was also broad-based, as all categories of spending were meaningfully higher. Continuing the trend from last year, our European brands continue to outperform year over year on both price and occupancy.

David: The favorability in cost was mainly due to the timing of expenses between the quarters.

David: We did find some permanent savings, which flowed through to the full year, which I will touch on later in my remarks.

David: And third favorability in interest expense of $13 million was driven by our refinancing efforts during the quarter.

David: Yield improvement in the first quarter versus the prior year was driven by improvements on both sides of the Atlantic from higher ticket prices and improved onboard spending.

David: The improvement in ticket prices was broad based across all core programs.

David: The improvement in onboard spending which accelerated from last quarter was also broad based as all categories of spending were meaningfully higher.

David: Continuing the trend from last year, our European brands continue to outperform year over year on both price and occupancy.

David Bernstein: Customer deposits at the end of Q1 were up over $300 million versus the prior year, driven by both improved ticket prices and increased pre-cruise onboard sales. Next, I will provide some color on our improved full-year March guidance. March guidance net income of approximately $2.5 billion is a $185 million improvement over December guidance. The improvement was essentially driven by two things. Our Q1 favorability in yield flowed through to the full year, improving our full-year yield guidance by 0.5 percentage point to 4.7% versus the prior year. Our refinancing efforts during the quarter allowed us to lower our full-year interest expense guidance by $100 million. I did want to point out that absolute cruise costs, excluding fuel, are expected to be slightly less than December guidance.

David: Customer deposits at the end of the first quarter were up over $300 million versus the prior year driven by both improved ticket prices and increased pre cruise onboard sales.

David: Next I will provide some color on our improved full year March guidance.

David: March guidance net income of approximately $2 $5 billion is a 185 million dollar improvement over December guidance.

David: The improvement was essentially driven by two things.

David: Our first quarter favorability is yield flowed through to the full year.

David: Proving our full year yield guidance by half a point to four 7% versus the prior year.

David: And our refinancing efforts during the quarter allowed us to lower our full year interest expense guidance by $100 million.

David: I did want to point out that absolute cruise costs, excluding fuel are expected to be slightly less than December guidance. As I. Previously indicated we did find some permanent savings during the first quarter, which flowed through to the full year.

David Bernstein: As I previously indicated, we did find some permanent savings during Q1, which flowed through to the full year. However, those savings were partially offset by higher dry dock costs because of a couple of unplanned dry docks and charter hire costs associated with the sale of one of our vessels during the month of March. While charter hire costs increase cruise costs, they are offset by lower depreciation expense. With absolute cruise costs slightly better, the change in cruise costs without fuel per ALBD is 3.8% for March guidance, which is simply the math of spreading lower cruise costs over the revised ALBDs, which change from December guidance because of a couple of unplanned dry docks in 2025.

David: However, those savings were partially offset by higher dry dock costs because of a couple of unplanned drydocks and charter higher costs associated with the sale of one of our vessels during the month of March while charter hire cost increased cruise costs, they were offset by lower depreciation.

David: Aviation experience.

David: With absolute cruise costs slightly better they change in cruise costs without fuel per <unk> is three 8% for March guidance, which is simply the math of spreading lower cruise costs over the revised <unk>, which changed from December guidance because of a couple of unplanned drydocks.

David: 2025.

David Bernstein: All of this results in $6.7 billion of EBITDA, a nearly 10% improvement over 2024, virtually all of which was driven by same-store revenue growth as our capacity is essentially flat year over year. Now I'll finish up with an update of our refinancing and deleveraging efforts. During the quarter, we refinanced $5.5 billion of debt, which is 20% of our total debt, with 3 very successful transactions. These transactions included our highest coupon debt instruments and delivered an incremental $145 million in annualized interest expense savings. We have been opportunistically reducing interest expense while simplifying our capital structure and managing our future debt maturities. Today, our average cash interest rate is down significantly at just 4.6%. Over the last 12 months, we've reduced our secured and senior priority guaranteed debt by approximately $4 billion with more reductions to come.

David: All of this results in $6 7 billion of EBITDA.

David: And nearly 10% improvement over 2020 for virtually all of which was driven by same store revenue growth as our capacity is essentially flat year over year.

David: Now I'll finish up with an update of our refinancing and deleveraging efforts.

David: During the quarter, we refinanced $5 5 billion of debt, which is 20% of our total debt with three very successful transactions. These transactions included our highest coupon debt instruments and delivered an incremental 145 million hanger.

David: Realized interest expense savings.

David: We have been opportunistically, reducing interest expense, while simplifying our capital structure and managing our future debt maturities.

David: Today, our average cash interest rate is down significantly at just four 6%.

David: Over the last 12 months, we've reduced our secured senior priority guaranteed debt by approximately $4 billion with more reductions to come.

David Bernstein: Our near-term maturity towers are well managed with just $1.1 billion of debt maturities for the remainder of 2025 and $2.7 billion for the full year 2026. During Q1, we reduced debt by another half a billion dollars, ending the quarter with $27 billion of total debt. With the benefit of well-managed near-term maturity towers and improved leverage metrics, over the remainder of this year and through 2026, we expect to opportunistically execute the rest of our current refinancing plan, prepaying debt, further simplifying our capital structure, optimizing our future debt maturities, and further reducing our interest expense. For the two-year period of 2025 and 2026, this refinancing plan, combined with our strong and growing cash flow and just 1 new build being delivered over this time, has the potential to reduce debt by nearly $5 billion from where we ended 2024.

David: Our near term maturity towers are well managed with just $1 1 billion of debt maturities for the remainder of 2025 and $2 7 billion for the full year 2026.

David: During the first quarter, we reduced debt by another half a billion dollars ending the quarter with $27 billion of total debt.

David: With the benefit that well manage near term maturity towers and improved leverage metrics over the remainder of this year and through 2026, we expect to Opportunistically execute the rest of our current refinancing plan.

David: Prepaying debt further simplifying our capital structure, optimizing our future debt maturities and further reducing our interest expense.

David: So the two year period of 2025 and 2026 this refinancing plan combined with our strong and growing cash flow and just one <unk> being delivered over this time has the potential to reduce debt by nearly $5 billion from where we ended 2024.

David: Sure.

David Bernstein: Let's not forget that we ended 2024 over $8 billion off the January 2023 peak. Looking forward, we expect our leverage metrics to continue to improve as our EBITDA continues to grow and our debt levels continue to shrink, increasing our confidence in achieving investment-grade leverage metrics in the short term as we move further down the road, rebuilding our financial fortress while continuing the process of transferring value from debt holders back to shareholders. Now, operator, let's open the call for questions.

David: And let's not forget that we ended 2024 over $8 billion off to January 2023 peak.

David: Looking forward, we expect our leverage metrics to continue to improve as our EBITDA continues to grow and our debt levels continue to shrink increasing our confidence in achieving an investment grade leverage metrics in the short term as we move further down the road rebuilding how far.

David: <unk> fortress, while continuing the process of transferring value from debt holders back to shareholders.

David: Now operator, let's open the call for questions.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, we ask that you limit yourselves to one question and one follow-up. Thank you. Our first question comes from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is another question. Kim you May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.

Speaker Change: Persimmon starches.

Speaker Change: To allow for as many questions as possible, we ask that you limit yourself to one question and one follow up thank you.

Speaker Change: Our first question comes from the line of Ben Chaiken with Mizuho Securities. Please proceed with your question.

Speaker Change: Hey.

Ben Chaiken: Good morning. Thanks for taking our questions and for all the helpful commentary. I think it would be great if you could provide some more color on maybe how we're trending since the Q4 period. Anything notable regarding changes to the consumer or demand trends? I know that you noted not being immune from the macro, which I guess shouldn't be a surprise, but just maybe some more color on what exactly that means. 1 quick follow-up. Thanks.

Speaker Change: Hey, good morning, Thanks for taking my questions and for all the helpful commentary I think it would be great. If you could provide some more color on maybe how were trending since the <unk> period anything notable.

Speaker Change: Regarding changes to the consumer demand trends I know that you you know you noted not being immune from the macro which I guess shouldn't be a surprise, but just maybe some more color on what exactly that means and then one quick follow up. Thanks. Good morning, Good morning, Matt and thank you for acknowledging we do live on planet Earth.

Josh Weinstein: Good morning, Ben. Thank you for acknowledging we do live on planet Earth. Look, Wave was a success, right? We set a record for bookings for further out years. We came into Wave at historic occupancy and price. We used that to our advantage. We took price, and we're well set up for the rest of the year. Hence, not only did we pretty much smash Q1 on the yields, but we maintained yield guidance for the rest of the year over 4%. I think we feel real good about how we've been tackling things, and our brands are doing a good job.

Speaker Change: So you know the wave where it was a success right I mean, we set a record for bookings for further out years, we came into wave at historic occupancy and price we use that to our advantage, we took price and we're well set up for the rest of the year has not only did we pretty much smashed.

Speaker Change: Q1 on the yields.

Speaker Change: But we maintain yield guidance for the rest of the year over 4%.

Speaker Change: So I think we feel real good about how we how we've been tackling things in our brands or are doing a good job.

Ben Chaiken: Got it. That's very helpful. Just to clarify maybe some of David's comments. You beat the Q1, you smashed the Q1, to your point, by $165 million, raised the guide, at least from what we can tell, by around $100 million. Our take from your comments is that the net yield outlook for Q2 through Q4 is the same. I think costs were actually slightly lower, per David's comments, but the net cruise cost higher because of lower ALBDs from the dry docks. I guess, what was the ALBD impact, if I got that right? I hate to be overly granular, but does the $165 million beat in Q1 versus the $100 million flow-through driven entirely by the lower ALBD dry dock dynamic, or is there anything else that you would flag? Thanks a lot.

Speaker Change: Got it that's very helpful. And then just to clarify maybe some of David common David's comments.

Speaker Change: You beat the <unk> smashed the <unk> to your point by 165 million raise the guide at least from what we can tell by around 100 or take from your comments is that the net yield outlook for quarters. Two through four is the same.

Speaker Change: I think costs were actually slightly lower per David's comments, but the net cruise cost higher because of lower Leds from the dry docks I guess, what was the Abd impact if I got that right and then I hate to be overly granular, but does the 165 feet in <unk> versus the 100 billion flow through driven entirely by the lower LDL.

Speaker Change: The dry dock dynamic or is there anything else that you would flag. Thanks a lot.

David Bernstein: First of all, the flow-through to the year was a combination of two things. It was the yield that flowed through from Q1, which was $98 million, as well as $100 million of interest expense. The total improvement for the year, I think, was $183 million.

Speaker Change: So the float first of all the flow through to the year with a combination of two things. It was the the yield that flowed through from the first quarter, which was a 98 million as well as 100 million of interest expense and the total improvement for the year I think was $183 million.

Ben Chaiken: Yes. I guess I was referring to EBITDA. Sorry. Yeah. Sorry, the $165.

Speaker Change: I guess I was referring to EBITDA, sorry, yeah, sorry, that's a 165.

David Bernstein: Yeah. The EBITDA is just basically the net income less the interest.

Speaker Change: Yeah.

Speaker Change: The EBITDA is just basically the.

Speaker Change: Net income less the interest yes.

Josh Weinstein: Yeah. Ben, the short answer is the yield flowed through for the year. The cost was mostly timing, which is why you don't see the full amount from Q1 going into the full year. We did reduce our absolute cost in a couple of ways, a few tens of millions of dollars. Because of the reduction in ALBDs because of the extra dry docks, it basically covers it up.

Speaker Change: The short answer is the yield flew flowed.

Speaker Change: Load through for the year.

Speaker Change: The cost was mostly timing, which is why you don't see the full amount from Q1 going into the full year, we did reduce our absolute costs in a couple of ways. You know a few tens of millions of dollars, but because of the the reduction in <unk> because of the extra dry docks.

Speaker Change: That covers it up.

Ben Chaiken: Okay, got it. That's very helpful. Thanks for clarifying.

Speaker Change: Okay got it that's very helpful. Thanks for clarifying.

Josh Weinstein: Sure. Thank you.

Speaker Change: Sure. Thank you.

Operator: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Robin Farley: Great. Thanks very much. Obviously, a lot of concern among investors because of some airline commentary and last night, a hotel data point. Great news to raise guidance, mostly by the Q1 beat when we look at the yield. Just given how you talked about the close-in being strong and onboard being strong, does that suggest that you're not raising the next 3 quarters' yield because you want to be cautious, obviously, given the environment? There would be that potential if your expectations for the close-in and onboard are still what they were 3 months ago, that there's potential upside to that guide. Is that the way to think about the rest of the year?

Robin Farley: Great. Thanks very much.

Robin Farley: Obviously, a lot of concern among investors because of some airline commentary last night, a hotel data point, so great news too.

Robin Farley: Two.

Robin Farley: The raised guidance, mostly by the Q1 beat when we look at the yield and just given how you talked about the close and being strong and onboard being strong does that suggest that youre not raising the next three quarters yield because you want to be cautious obviously given the environment.

Robin Farley: But there would be that potential if your if your expectations for the close in.

Robin Farley: Onboard are still what they were three months ago that there's potential upside to that guide is that the way to think about.

Robin Farley: The rest of the year.

Josh Weinstein: Yeah, look, the strength of Q1 was pretty fantastic, and that was driven by both the close-in demand on the ticket and just tremendous onboard spending. We're talking about 10% growth year over year for Q1, which is actually an acceleration of onboard spend trends versus year over year growth from Q4. Frankly, the onboard spend that we've seen in the first couple of weeks of March hasn't slowed down. We do feel good about the strength of our consumer. Clearly, I just want to recognize that there's just a lot of volatility in the backdrop, right? With new cycles comes volatility. We feel good about our guidance. We feel good about our ability to deliver it. We always want to outperform, and brands work on that day in and day out. Certainly don't promise anything other than we're going to do our best.

Speaker Change: Yeah look I mean, the strength of Q1 was pretty fantastic and that was driven by both the close in demand on the ticket and just tremendous onboard spending we're talking about 10% growth year over year for the for the for the first quarter, which is actually an acceleration of onboard spend trends versus year over year growth from the.

Robin Farley: <unk> fourth quarter.

Robin Farley: Frankly, the onboard spend that we've seen in the first couple of weeks of March.

Robin Farley: March Hasnt slowed down so we do feel good about the strength of our consumer.

Robin Farley: Clearly.

Robin Farley: Clearly I just want to.

Robin Farley: You recognize that there's just there's just a lot of volatility in the backdrop right and with new cycles comes volatility we feel good about our guidance, we feel good about our ability to deliver it.

Robin Farley: We always want to outperform and brands work on that day in and day out certainly don't promise.

Robin Farley: Anything other than we're going to do our best.

Robin Farley: Great. Thank you. Then maybe just as a quick follow-up, just if there's a way to maybe quantify with the expense. Obviously, you said some of it was because of the ALBD. Is there a way to think about either the dollar amount of sort of ongoing structural net cruise cost expense reduction? Also excluding from that the higher charter cost from the Seabourn ship, right? Because that's just sort of shifting from depreciation sort of temporarily and not really structural cost. How should we think about the sort of additional dollar amounts of structural cost, excluding that and excluding if we think of the aggregate dollar amount, then the ALBDs in the denominator won't matter. Thanks.

Robin Farley: Okay, great. Thank you and then maybe just as a quick follow up.

Speaker Change: Just if there's a way to maybe quantify.

Robin Farley: With the.

Robin Farley: The expense obviously, you said some of it was because of the <unk>.

Robin Farley: Is there a way to think about either the dollar amount of sort of ongoing structural net cruise cost expense reduction.

Robin Farley: Is it and also excluding from that the higher charter cost from the seaborne ship right. Because that's just sort of shifting from depreciation sort of temporarily I'm not not really structural cost. So what how should we think about this.

Robin Farley: Additional dollar amounts of structural costs, excluding that and excluding it.

Robin Farley: If we think of the aggregate dollar amount of net ltd's.

Robin Farley: Denominator won't matter.

David Bernstein: Yeah. On the $65 million of cost in Q1, we said most of it was timing, but probably about a third of it was permanent cost savings. We're always looking for ongoing cost savings. We do have the best cost structure in the industry, but we don't stop there. We keep on finding ways to improve over time. We'll do that this year and next year and beyond.

Robin Farley: Yes, so the.

Robin Farley: On the $65 million of cost in the first quarter and we said most of it was timing, but probably about a third of it was permanent cost savings.

Robin Farley: Always looking for ongoing cost savings.

Robin Farley: We do have the lowest the best cost structure in the industry.

Robin Farley: But we don't stop there we keep on finding ways to improve over time, and we'll do that this year and next year and beyond.

Robin Farley: Okay, great. That was totally clear. Thank you. Thanks.

Robin Farley: Okay, great that was totally clear thank you Robert.

Josh Weinstein: You're welcome.

Operator: Thank you. Our next question comes from the line of Steve Wieczynski with Stifel. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Steve <unk> with Stifel. Please proceed with your question.

Steve Wieczynski: Hey, guys. Good morning. Congrats on the Q1. Josh, want to ask about bookings that you're taking in right now for 2026. I know it's still a little bit early on, but just wondering if you're seeing any, what we would call kind of material differences in bookings for 2026 by brand. Maybe if you're seeing customers book, but maybe they're not pre-booking on board as much or they're taking lower cabin categories. Just trying to make sure there isn't anything you're seeing right now, as we look further out, that would be concerning to you guys.

Speaker Change: Hey, guys good morning.

Speaker Change: And congrats on the first quarter so.

Speaker Change: Just wanted to ask about bookings that you're taking in right now for 2026.

Speaker Change: And I know, it's still a little bit early on but just just wondering if youre seeing any what we would call kind of material differences in bookings for 2006 by by brand.

Speaker Change: Or maybe if youre seeing customers.

Speaker Change: Book, but maybe that are pre booking onboard as much or they're taking lower cabin categories.

Speaker Change: Trying to make sure there isn't anything youre seeing right now as we look further out that would be concerning to you guys.

Josh Weinstein: Yeah. Of course. Thanks, Steve. Thanks for the compliment. No, I guess the short answer is no. There's nothing that I'd say on a brand-by-brand basis was raised anything of interest to talk about. I love the fact that we can say that we can walk and chew gum at the same time and finish out 2025 and still ground ourselves with a good foundation for 2026. I think with a record book position at higher prices, that's exactly what the teams are doing.

Speaker Change: First thanks, Steve Thanks for the compliment no I mean, I guess the short answer is no. There's nothing that I'd say on a brand by brand basis was raised any anything of interest to talk about.

Speaker Change: I Love. The fact that we can say that we can.

Speaker Change: A walk and chew gum at the same time and finish out 25 and still you know.

Speaker Change: Ground ground ourselves with a good foundation for 26, and I think with our.

Speaker Change: A record book position at higher prices and that's exactly what the teams are doing.

Steve Wieczynski: Okay. Got you. Makes sense. Sounds good. The second question, it's going to be kind of somewhat the same question that Robin asked. I just want to ask it a little bit differently. You beat the Q1 by, I think it was 270 basis points on the yield side of things. I guess as we think about and we can see your Q2 guidance now, if we think about the H2 of the year, if the consumer stays status quo, there's no change in onboard, close-in remains strong, I'm guessing there's probably upside to your H2 guidance. I'm just trying to ask that question maybe a little bit differently.

Speaker Change: Okay got you it makes sense sounds good and then the second question.

It's going to be kind of somewhat the same question that Robin I, just want to ask a little bit differently, but.

Speaker Change: You beat the first quarter by.

Speaker Change: I think it was 270 basis points on the yield side of things. So I guess as we think about the and we can see your second quarter guidance now. So if we think about the back half of the year.

Speaker Change: If the consumer stays.

Speaker Change: Status quo Theres no change in onboard close and remains strong.

Speaker Change: I'm guessing, there's probably upside to your back half guidance I just I'm just trying to ask that question, maybe a little bit differently or maybe specifically.

Josh Weinstein: Just to be clear, if our onboarding remains real strong and our close-in demand remains real strong, then yeah, I think you're right.

Speaker Change: Specifically or just to be clear if our onboarding remains real strong close in demand remains really strong, but yeah, I think you're right.

Speaker Change: [laughter], Okay. That's all I needed to hear thank you very much.

Steve Wieczynski: Okay. That's all I needed to hear. Thank you very much.

Josh Weinstein: Thanks, Steve.

Patrick Scholes: Thanks, Dave.

Operator: Thank you. Our next question comes from line of Brandt Montour with Barclays. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of branch months' work with Barclays. Please proceed with your question.

Brandt Montour: Good morning, everybody. Thanks for taking my question, and I'll echo the congratulations on the Q1 and raising the full-year guide. My question is a permutation of something you may have already gotten. I hope not. Josh, you guys see a lot of different consumers, and you see a lot of different areas of the world and how the behavior that those consumers can evolve with the current macro backdrop we're in. I'm curious if you're seeing any sort of relative differences between onboard and consumer booking behavior between Europe and America, as well as between drive to and fly to.

Speaker Change: Good morning, everybody and thanks for taking my question and Echo the congratulations on the first quarter and raising the full year guide.

Speaker Change: My question is it is a permutation of something you may have already gotten I hope I hope not but Josh you guys see.

A lot of different consumers and you'll see a lot of different areas of the world and how the behavior of those consumers can evolve with with the current macro backdrop. We're in I'm curious, if you're seeing any sort of relative differences between onboard and consumer booking behavior between Europe and America as well as.

Speaker Change: Between drive to and fly to.

Josh Weinstein: Got it. Good morning, Brandt. We've been talking for a long time about the strength of the portfolio and the portfolio approach that we have. Going to sound like a broken record, but as I've been saying probably for the last, I don't know, 6 quarters now, Europe has been driving things forward real nicely, and that has continued. That's not a surprise for us, because of the whole structural way that we were amping up everything since a couple of years ago. That's remained consistent, which doesn't mean that North America is not performing. It just means that our European brands are outperforming the outperformance we got on this side. I feel pretty good about that. I'd say consumers, whether you are low-end, middle of the road, high-end luxury, every person is different, right?

Speaker Change: Got it so Gordon Brown.

Speaker Change: You know we've been talking for a long time about the strength of the portfolio and the portfolio approach that we have.

Speaker Change: I'm going to sound like a broken record, but as I've been saying probably for the last hour.

Speaker Change: It was just six quarters now Europe has been driving things forward real nicely and that has continued so that's not a surprise for us.

Speaker Change: Because of the whole structural way that we were amping up everything since our since a couple of years ago. So that's remained consistent which doesn't mean that north american's nonperforming. It just means that our European brands are outperforming the outperformance we got on this side.

Speaker Change: So I.

Speaker Change: I feel I feel pretty good about that I'd say, you know consumers, whether you are low and middle of the road high end luxury every person is different and every person who's going to internalize the backdrop of what they are dealing with differently and make their choices.

Josh Weinstein: Every person is going to internalize the backdrop of what they're dealing with differently and make their choices. Our portfolio approach works incredibly well against that backdrop.

Speaker Change: Our portfolio approach works incredibly well against that backdrop.

Brandt Montour: Thanks for that. Then just a quick follow-up. If, let's say that no one has a crystal ball. Let's say the consumer slows further, and if there's a slowdown in bookings industry-wide, or let's just even say away from you, how do you perceive the industry's current

Speaker Change: Thanks for that and then just a quick follow up.

Speaker Change: If they let's say that no one has a crystal ball, let's say consumer.

Speaker Change: Slows.

Speaker Change: Further and if there's a slowdown in bookings industry wide or let's just even say away from you. How do you perceive the industry's current willingness to sort of hold price or act more rationally than it has in the past.

Brandt Montour: willingness to sort of hold price or act more rationally than it has in the past?

Josh Weinstein: Look, I'll speak for myself. I would not speak for the industry other than to say, I think the industry overall is on good, solid ground. Got great leaders at those operations that are doing real good things for the industry as well as their brands. We're increasing consideration, increasing demand, which is a great thing for everybody. With respect to us, we're executing on the things that we've been talking about for years. It's resulted right now in us being better booked than pretty much we've ever been. We have great visibility. Not that much to go in this year. Onboard spends we pull forward, which is enhanced visibility, versus prior periods. We, in particular, we have no capacity growth, right? We are in a fairly enviable position, I think, that even new builds are great, but we can do a lot with what we've got.

Look I'll speak for myself I won't I wouldn't.

Speaker Change: Not speak for the industry other than to say I think the industry over all is on good solid ground <unk> got great leaders at those operations that are doing really good things for the industry as well as their brands.

Speaker Change: And were increasing consideration increasing demand, which is a great thing for everybody with respect to us.

Speaker Change: We're executing on the things that we've been talking about for years, It's resulted right now and us being better book than you know pretty much we've ever been.

Speaker Change: We we have great visibility.

Speaker Change: Not that much to go in this year onboard spends we pull forward, which is enhanced visibility versus prior periods. So and we in particular, we have no capacity growth right. So we are in a fairly enviable position I think that even though new builds are great, but we can.

Speaker Change: Do a lot with what we've got and having only one ship coming this year, none in 2026, 1% and 27, I mean that for US that's a fantastic roadmap for success. So we're looking forward to it.

Josh Weinstein: Having only 1 ship coming this year, none in 2026, 1 in 2027, I mean, that for us, that's a fantastic roadmap for success. We're looking forward to it.

Brandt Montour: Thanks a lot. Congrats again on the quarter.

Speaker Change: Thanks, a lot congrats again on the quarter.

Josh Weinstein: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from the line of James Hardiman with Citigroup. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of James Hardiman with Citigroup. Please proceed with your question.

James Hardiman: I guess tying this all up, outside of bookings and onboard spend, which you've talked about, are there any other forward indicators that you think might be a good indicator of your consumer sentiment or how they are with respect to making payments for their trips, how many are buying travel or insurance, or what any of those indicators are showing?

Speaker Change: Yes.

Speaker Change: With the I guess.

Speaker Change: Hi, Tyler.

Speaker Change: It's all up outside of bookings in onboard spend which you've talked about are there any other forward indicators that you that you think.

Speaker Change: It might be a good indicator of your consumer sentiment or whether how they are respected making payments for their trips or how many are buying travel or insurance or any what any of those indicators are showing.

Josh Weinstein: Man, James, you're going deep. No, nothing out of the ordinary that would trigger flags. Cancellations are fairly consistent. There's really nothing else that we'd probably put on the table to talk about as anything of significance.

Speaker Change: James we're going deep.

Speaker Change: No no nothing nothing out of the ordinary that would trigger flags cancellations are fairly consistent so there's really nothing else that would probably put on the table to talk about is.

Speaker Change: Anything of significance.

Speaker Change: Sure.

James Hardiman: Fair enough. With the 12% ROIC in sight, can you give us any indication on what you think the long-term opportunity is there, specifically how you guys think about the return profile for Celebration Key and your other sort of non-ship investments? Are there any other investments that we should be thinking about that are significantly ahead of your corporate average?

Speaker Change: Fair enough.

Speaker Change: With the 12% of RSC insight.

Speaker Change: Can you give us any indication on what you think the long term opportunity is there specifically and how you guys think about the return profile for celebration key and there are other.

Speaker Change: Sort of non shift investments are there any other investments that we should be thinking about that are significantly ahead of the your corporate average.

Speaker Change:

Josh Weinstein: Well, I think overall, we feel real good about the progress we've been making on the returns that we're generating. I certainly don't view, and never did view, 12% as an ending point. Mid-teens is certainly realistic, and certainly what we'll be shooting for. The things that are going to drive it are really the continuation of doing our jobs better across the brands in the commercial space, watching the cost like we always do as a low-cost industry leader, and being able to lean into the investments that we're making around Celebration Key, RelaxAway, and doing some other things with positioning of some of the destinations that we currently own, which are phenomenal. On top of that, aside from the moderate, I'd say modest capacity growth we have, we are investing in ourselves in other ways.

Speaker Change: Overall, we feel real good about the progress we've been making on the returns that we're generating I certainly don't view I never give you, 12% as an ending point.

Speaker Change: So mid teens is certainly.

Speaker Change: Realistic.

Speaker Change: And certainly what we'll be shooting for the things that are going to drive it are really the continuation of doing our jobs better across the brands and the commercial space.

Speaker Change: And the cost like we always do as a low cost industry leader.

Speaker Change: Being able to lean into the investments that we're making around celebration key relax away.

Speaker Change: Some other things with the positioning of the some of the destinations that we currently own.

Speaker Change: Which are phenomenal and on top of that.

Speaker Change: Aside from the moderate.

Speaker Change: I'd say modest capacity growth. We have we are in we are investing in ourselves in other ways. We've talked about our evolution. For example, I think I said in my prepared remarks.

Josh Weinstein: We've talked about AIDA Evolution, for example, I think I said it in my prepared remarks, which you take one of the most successful brands in the world, and you reinvest in them, in their existing capacity to add revenue opportunities, cabins. That's going to serve us incredibly well, as is the investments we're making in Alaska, to delight our guests, and really cement our strategic advantage even further, on our land/sea packages and what we have to offer in Alaska. I think that we're in a pretty strong place.

Speaker Change: Which you take one of the most successful brands in the world.

Speaker Change: And you reinvest in them and their existing capacity to add revenue opportunities cabins. That's.

Speaker Change: That's going to serve us incredibly well as is the investments we're making in Alaska.

Speaker Change: Delight, our guests and really cement our strategic advantage even further on.

Speaker Change: On our land packages and what we have to offer in Alaska. So I think that we're in a we're in a pretty strong place right.

James Hardiman: I guess just really quick off of that, delivering your targets so early, any indication when we might get new long-term outlooks?

Speaker Change: I guess, just really quick on offer that deliver on your targets. So early any indication of when we might get new long term outlook.

Josh Weinstein: Man, I love that you're even asking that. I think we got to get to the targets, not just forecast them. My expectation would be, we'll be talking about our next set, hopefully in early 2026, but that's we got to deliver.

Speaker Change: Man I love that you have been asking so.

Speaker Change: I think we got a we got to get to the targets not just forecast them. So my expectation would be.

Speaker Change: We'll be talking about our next set hopefully in early 2026, but that's you know we got to deliver.

James Hardiman: All right. Thanks a lot, guys.

Speaker Change: Alright, Thanks, a lot guys.

Josh Weinstein: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from the line of Patrick Scholes with Truist Securities. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Patrick Scholes with true Security. Please proceed with your question.

Patrick Scholes: Great. Thank you. Good morning, everyone. I want to follow up on the comment in here, in the press release about not being completely immune from the heightened macroeconomic geopolitical volatility since giving your guidance in December. Regarding that volatility, have you actually seen the volatility have an impact on booking pace as the quarter progressed?

Patrick Scholes: Great. Thank you good morning, everyone.

Speaker Change: I wanted to follow up on the comment in here.

Patrick Scholes: In the press release about not being completely noon.

Patrick Scholes: The heightened macro economic geopolitical volatility since given your guidance in December.

Patrick Scholes: Regarding that volatility have you actually seen.

Patrick Scholes: The volatility have any impact on our booking pace as the quarter progressed.

Josh Weinstein: Yeah. Look, we certainly saw ups and downs. I mean, we see ups and downs every year, so that's not terribly surprising. It all came out to the bookings we were able to make at the pricing that we wanted to make, and sets us up, as we talked about, in a really good position. At the end of the day, people just need to be getting used to the new normal, which is exactly what's happening. As a matter of fact, last week, bookings nicely ahead year over year. Not everything is the end all be all for year over year, but it's what we talk about publicly.

Patrick Scholes: Yes, what we say look we certainly saw ups and downs I mean, we see ups and downs.

Patrick Scholes: Every year, so that's not terribly surprising.

Patrick Scholes: It all it all came out of the bookings we were able to make at the pricing that we wanted to make.

Patrick Scholes: And sets us up as we talked about in a really good position.

Patrick Scholes: At the end of the day people just need to be getting used to the new normal which is exactly what's happening and you know as a matter of fact last week.

Patrick Scholes: Bookings nicely ahead year over year, and not everything is the and there'll be all for year over year, but it's what we talked about publicly.

Josh Weinstein: Particularly, to the point people were asking about close in, our close-in bookings last week for Q2, for literally sailing in Q2, we don't have that much to go. The booking volume and pricing was just off the charts. We just got to let the world progress. We'll take what we want to take as we go and carry out the year.

Patrick Scholes: And particularly to the point, where people were asking about close in our close in bookings last week for the second quarter for literally sailing in the second quarter. We don't have that much to go and the booking volume and pricing, but just off the charts.

Patrick Scholes: We just got it.

Patrick Scholes: Let let the world progress and we will take what we wanted to take as we go.

Patrick Scholes: And carry out the year.

Patrick Scholes: Okay, thank you.

Patrick Scholes: Okay. Thank you.

Operator: Thank you. Our next question comes from the line of Jaime Katz with Morningstar. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Jamie Katz with Morningstar. Please proceed with your question.

Jaime Katz: Hey, good morning. I wanted to talk a little bit about the cadence of costs over the rest of the year. I think there were set to be higher dry docks in both Q2 and Q3 this year, and so as we think about the arc of expenses, can you help us sort of flow through whether those are more equal or if maybe that is more weighted to Q2, those dry docks? Thanks.

Jamie Katz: Hey, good morning, I wanted to talk a little bit about the cadence of costs over the rest of the year I think there were set to be hire drydocks.

Jamie Katz: Q2, and Q3 this year and so as we think about the arc of expenses can you help us sort of flow through whether those are more equal or if maybe that is more weighted to Q2 of those dry docks. Thanks.

David Bernstein: As I had indicated on the December call, we had expected that both the Q2 and Q3 costs would be up a little bit more than the full year, and that the Q4 would be up a little bit less than the full year. Nothing's changed since then.

As I had indicated.

Jamie Katz: On the December call.

Jamie Katz: Expected.

Jamie Katz: The second and third quarter cost would be up a little bit more than the full year ended the fourth quarter would be up a little bit less than the full year. So.

Jamie Katz: So nothing has changed since then.

Jaime Katz: Okay. As we think about the lengthening of the booking curve, I am just trying to triangulate what the visibility looks like now relative to the past. I think historically, it used to be that you guys were booked maybe 50% to 70% out for Q2 and then maybe 30% to 50% out for Q3. Has that decoupled a little bit and moved a little bit higher just so we could have more certainty on what the rest of the year looks like?

Jamie Katz: Okay.

Jamie Katz: And then as we think about the lengthening of the booking curve I'm just trying to triangulate what the visibility looks like now relative to the past I think historically it used to be that.

Jamie Katz: We're booked maybe like 50% to 70% out for Q2, and then maybe 30% to 50% out for Q3 is that the.

Jamie Katz: Couple of a little bit and moved a little bit higher just so we could have more certainty on what the rest of the year looks like.

David Bernstein: All of those numbers that I used to give for the current quarter and the next three, we are above the top end of all of those ranges. As a result, as Josh said, we're about 80% booked for the remainder of this year. If you took the top end of all the ranges, you would get an average of 70% for the rest of the year. We're at over the top end of all the ranges.

Jamie Katz: Yes.

Jamie Katz: All of those numbers that they used to get.

Jamie Katz: For the next the current quarter in the next three we're above the top end of all of those ranges and so as a result, as Josh said.

Speaker Change: About 80% booked for the remainder of this year. If you took the top end of all the ranges you'd be it you would get an average of 70 for the rest of the year. So we're at the top end of <unk> or over the top end of all of the ranges.

Jaime Katz: Excellent. That's really helpful. Thank you.

Speaker Change: Excellent that's very helpful. Thank you.

Operator: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Speaker Change: Yeah.

Conor Cunningham: Hi, everyone. Thank you. You've been super clear on the strength of bookings, but I wanted to just maybe come back to the levers that you have if things did weaken. You talked about how you would work to achieve a lot of these results that are kind of flowing through. Again, it doesn't seem like it's a demand problem, but at the end of the day, if things were to weaken, what cost levers do you think you have right now that could be low-hanging fruit, if things were to deteriorate on some level? Thank you.

Conor Cunningham: Hi, everyone. Thank you you bet.

Speaker Change: Super clear on the strength of bookings, but.

Speaker Change: I wanted to just maybe come back to you.

Speaker Change: Levers that you have if things did weaken you talked about how you would work to achieve a lot of these results that are kind of falling through and again it doesn't seem like it's a demand problem, but like at the end of the day, if things were to weaken what cost levers do you think you have right now that could be low hanging fruit if things were to deteriorate on some level. Thank you.

Josh Weinstein: Well, good morning. The best lever we probably have is, if the world takes a turn, we don't hedge. Because we don't hedge on commodities, generally speaking, commodities turn with that world. There's a natural hedge in our business by the basis of how we run it. Look, we clearly can do a lot of things if we really choose or need to do that. Our first goal is deliver the results that we want to deliver because we think that's the right thing for the business, right? The guest experience that we want to give, the investments that we want to make for the long term, not just for the short term. Everything is always looked at pretty critically to decide what makes sense in the current environment, because the world does change.

Speaker Change: Well good morning.

Speaker Change: The the best lever, we probably have as you know if if the world takes a turn we do.

Speaker Change: Hedge and because we don't hedge on commodities generally speaking commodities turn with that world and so there's a natural hedge in our business by by the basis of how we run it.

Speaker Change: Look we clearly can do a lot of things, if we really choose or need to do that.

Speaker Change: Our first goal is to deliver the results that we want to deliver because we think that's the right thing for the business right. The guest experience that we want to give.

Speaker Change: The investments that we want to make for the long term not just for the short term.

Speaker Change: But everything is always looked at pretty critically to decide what makes sense in the current environment because the world does change and.

Josh Weinstein: We've clearly got room, should we need to make a lot of changes depending on what that circumstance could be.

Speaker Change: We've clearly got room should we need to make a lot of changes depending on what that circumstance could be.

Conor Cunningham: Okay. Then I think a big part of the plan this year, and over the next couple of years as supply is a little bit limited for you guys, has been to push marketing spend and to drive improved revenue quality and so on. Could you just talk a little bit about how that strategy's playing out right now? It seems like it's working, but the two levers that I think from a revenue management standpoint are just inventory and marketing. If you could just talk about the balance of those two going forward, that would be helpful. Thank you.

Speaker Change: Okay, and then I.

Speaker Change: I think a big part of the plan this year and over the next couple of years.

Speaker Change: Supply is a little bit limited for you guys has been to push marketing spend and to drive improved.

Speaker Change: Improved revenue quality and so on so could you just talk a little bit about how that strategy is playing out right now it seems like it's working but I just the two levers that I think from a revenue management standpoint, or just like inventory and marketing. So if you could just.

Speaker Change: Talk about the balance of those two going forward that'd be helpful. Thank you.

Josh Weinstein: Yes. No, thanks very much. We've talked about it. We've strategically been changing our investment approach when it comes to things like advertising. We're spending much more on a per unit basis than we did back 5, 6 years ago. Still, a good amount less than many others in the vacation and leisure space. We think we're getting the balance right. As far as is it working? Look, Q1 just ended. Our yields over the last 2 years are up 24%. I think that's probably a pretty good indication that it is working. Also that you don't need new builds to drive that demand, because the vast majority of our brands don't have any. That's same ship sales, if you will.

Speaker Change: Yes, no thanks very much.

Speaker Change: We've talked about it we've strategically been changing our investment approach when it comes to things like advertising, we're spending much more on a per unit basis than we did back.

Speaker Change: Five six years ago.

And still.

Speaker Change: A good amount less than many others in the vacation and leisure space. We think we're getting the balance right as far as you know is it working.

You know look first quarter just ended our yields over the last two years are up 24%.

Speaker Change: I think that's probably a pretty good indication of indication that it is working and also that you don't you don't need new builds to drive that demand because the vast majority of our brands don't have any so that same ship.

Speaker Change: Sales if you will.

Josh Weinstein: That goes to how we manage the curve on the yields, the advertising that we do, both the creative, top of funnel type of things, and then the digital performance, our relationships with the trade, and then delivering on board. I think the brands are doing an incredible amount of work to make that happen, and I do think advertising helps unlock that. We have unleashed it while maintaining the cost structure that we think is appropriate.

Speaker Change: It goes to how we manage the curve on the on the on the yields the advertising that we do both the creative top of funnel type of things in the digital performance our relationships with the trade and then delivering on board and I think the brands are doing an incredible.

Speaker Change: The amount of work to make that happen and I do think advertising helps unlock that and so we've we have unleashed it while maintaining the cost structure that we think is appropriate.

Conor Cunningham: Appreciate it. Thank you.

Speaker Change: I appreciate it. Thank you. Thank you.

Josh Weinstein: Thank you.

Speaker Change: Okay.

Operator: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

David Katz: Hi, good morning, and well done all around. I wanted to just bring forth a debate that we have a lot. Is there any evidence that is shareable around any of the bookings from consumers trading down? We assume that there's some trading down to the value of a cruise versus the much more expensive hotels, particularly domestically. Potentially, some that are maybe priced out of a cruise that may be at a different end of the spectrum. Is there anything that we can discuss or unpack there?

David Katz: Hi, good morning.

Speaker Change: And well done all around I wanted to.

Speaker Change: Just bring forth a debate.

Speaker Change: We have a lot and is there any evidence that as sheryl around.

Speaker Change: Any of the bookings from consumers trading down.

Speaker Change: Right.

Speaker Change: We assume that there is some trading down to the value of our crews versus the much more expensive hotels, particularly domestically and.

Speaker Change: Potentially.

Speaker Change: Some that are maybe priced out of our crews that maybe at a different end of the spectrum is there anything that we can discuss or unpack there.

Josh Weinstein: I think there's two separate questions. First, the concept of a quote, "Trading down to a cruise." I'd look at it differently. I'd say that we have a tremendous price-to-experience ratio compared to land. People recognize that value more and more if they're looking to make their dollar go further. Even though it pisses me off when we look at the price gap because there's so much opportunity for us that I'm excited about. In those types of times, that is a huge strength that we have because we can outperform the experience we give for the price that we charge compared to land. The fact that we're carrying more new-to-cruise than we ever have. New-to-cruise, the growth rate for Q1 alone was significantly multiple times higher than the growth rate on the capacity. It's working.

Speaker Change: So I think there's two separate questions. So first the concept of core trading down to a cruise.

Speaker Change: I look at it differently I would say that we have a tremendous price to experience ratio compared to land.

Speaker Change: And people recognize that value more and more if they're looking to make the dollar go further.

Speaker Change: And even though it Pisses me off when we look at the price gap because theres, so much opportunity for us and I'm excited about.

Speaker Change: And those types of times that is a huge strength that we have because we can outperform the experience we give for the price that we charge compared to land.

Speaker Change: As far as the fact that we're carrying more new to cruise than we ever have.

Speaker Change: New to cruise the growth rate for Q1 alone was significantly mulch.

Speaker Change: Multiple times higher than the growth rate on the capacity so it's working.

Josh Weinstein: As far as trading down within cruise, there's nothing that we see, because our brands have a pretty good mix within themselves to be able to cater to people at lots of different price points. We talk about Carnival a lot, and people have concerns about Carnival because of X, Y, Z and consumer. Keep in mind, Carnival's got suites on AIDA's, which are very different from inside cabins on three-nighters. We have a lot of product to be able to source lots of folks brand by brand, up and down the price points.

Speaker Change: As far as trading down within cruise there is nothing that we see because our brands have a pretty good.

Mix within themselves to be able to cater to people at lots of different price points, we talk about carnival, a lot and people have concerns about carnival because of X y Z in consumer keep in mind Carnival's got suites eight.

Speaker Change: Eight days, which are very different from inside cabins on <unk>. So we have a lot of product to be able to source lots of folks brand by brand up and down the price points.

Speaker Change: Uh huh.

David Katz: I'll apologize for the word choice about trading down.

Speaker Change: Oh I apologize for the word choice about trading down.

Josh Weinstein: I appreciate it.

David Katz: But I-

Speaker Change: But.

Josh Weinstein: Thank you very much.

Speaker Change: Alright, Thank you very much okay.

David Katz: Okay. My quick follow-up is that the sale of the Seabourn ship at a gain, can you just elaborate on the reasoning behind that and the timing of it? Just a little insight. Thank you.

Speaker Change: My quick follow up.

Speaker Change: The sale of the seaborne ship at a gain can.

Speaker Change: Can you just elaborate on that.

Speaker Change: The reasoning behind that and the timing of it.

Speaker Change: Just a little insight. Thank you yeah yeah.

Josh Weinstein: Yeah. It's actually pretty simple. We got a cash offer that when I looked at that offer versus what I thought the impact would be for that ship over an appropriate amount of time and what the impact would be on the rest of that fleet and its ability to manage its yields, it was a decision that was in the best interest of the shareholders. It's as simple as that. Nothing's for sale. We don't have a for sale sign up, but if people are approaching us unsolicited for offers, I'll listen. If it's the right thing to do for the shareholders, then we'll do it. That doesn't happen very often, but that was one of these cases.

Speaker Change: It's actually pretty simple, we got a cash offer that when I look at that offer versus what I thought the impact would be for that ship over an appropriate amount of time and what the impact would be on the rest of that fleet and its ability to manage this yields.

Speaker Change: If it was a decision that was in the best interest of the shareholders.

Speaker Change: It's as simple as that you know nothing is for sale, we don't have a for sale sign up but if people are approaching us unsolicited for offers I'll listen.

Speaker Change: If it's the right thing to do for the shareholders.

Speaker Change: Then we'll do it or not was it doesn't happen very often but that was one of these cases.

David Katz: Appreciate it. Thanks very much.

Speaker Change: I appreciate it thanks very much yeah, I would just say seaborne is a phenomenal brand we are talking about one of the youngest fleets around the world Ultra luxury and.

Josh Weinstein: Yeah. I'll just say Seabourn is a phenomenal brand. We are talking about one of the youngest fleets around the world, ultra-luxury, and they are going gangbusters. The yields are up nicely. There's nothing wrong other than the fact that somebody made us an offer that we couldn't refuse.

Speaker Change: And they are going gangbusters. So the yields are up nicely like theres nothing wrong other than the fact that somebody made us an offer that we couldn't refuse.

David Katz: Got it. Thanks a lot.

Speaker Change: Got it thanks a lot.

Josh Weinstein: Thanks.

Speaker Change: Thanks.

Operator: Thank you. Our next question comes from the line of Matthew Boss with JP Morgan. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Matthew Boss with Jpmorgan. Please proceed with your question.

Matthew Boss: Great, thanks. Josh, close in demand off the charts, no slowdown in onboard spend in the last few weeks. It seems like the near term is crystal clear. Maybe multi-year, could you elaborate on new customer acquisition that you're seeing across the portfolio, maybe tied to the new marketing that you cited and walked through, and just structural improvement opportunities that you see across your brands, given the portfolio approach that you have?

Speaker Change: Great. Thanks, So Josh close in demand off the charts no slowdown in onboard spend in the last few weeks. It seems like the near term is crystal clear. So maybe multiyear could you elaborate on new customer acquisition that youre seeing across the portfolio, maybe tied to the new marketing that you that you saw.

Speaker Change: Right and and and walked through and just structural improvement opportunities that you see across your brands given the portfolio approach that you have.

Josh Weinstein: With respect to guest composition, it's actually a pretty interesting place now, right? Because effectively, with no growth on the horizon, every brand has the same capacity that they have year-over-year, which means we're not trying to fill new capacity and cast the net wider for purposes of just needing more bodies. The idea of first-time cruisers, brand switchers, and loyalists, it really becomes a dynamic of who's willing to pay the most to get on the ship. Yes, we have been ramping up first-timers, which I think is a testament to the brand strengths and the marketing that they've been doing and the experiences that they give. Ultimately, though, it's going to really be a matter of getting that optimal mix based on the price points and what generates the most revenue.

Speaker Change: Yeah, so with respect to guest composition.

Speaker Change: It's actually a pretty interesting place now right because effectively.

Speaker Change: With no growth on the Horizon and every brand has the same capacity that they have year over year, which means that if we're not trying to fill new capacity and cast the net wider for purposes of just needing more bodies.

Speaker Change: And so the.

Speaker Change: Idea of first time cruisers brand switchers and loyalists, it really becomes a dynamic of who's willing to pay the most to get on the ship.

Speaker Change: And so yes, we have been ramping up first timers, which I think is a testament to the to the brand strengths in the marketing that they've been doing in the experiences that they give.

Speaker Change: Ultimately, though ultimately it's going to really be a matter of getting that optimal mix based on the price points and what generates the most revenue I think it's also useful over the next couple of years, it's extreme slowdown for us and capacity growth, but the industry overall is slowing.

Josh Weinstein: I think it's also useful, over the next couple of years. It's extreme slowdown for us in capacity growth, but the industry overall is slowing its growth rate. I think that certainly doesn't hurt us. It helps us. With respect to your second question, could you just elaborate a little bit more on what you were thinking?

Speaker Change: Its growth rate. So so I think that there is there is that certainly doesn't hurt us it helps us.

Speaker Change: With respect to your second question could you just elaborate a little bit more on what you were thinking.

Matthew Boss: Just with the new marketing, what you're seeing in terms of new customers as well as brands that maybe haven't returned to 2019 metrics. Just the next leg of opportunity that you have relative to maybe others in the industry if we remain at robust levels.

Speaker Change: Just with the new marketing, what Youre seeing in terms of new customers as well as brands that maybe haven't returned to 2019 metrics. Just the next leg of opportunity that you have relative to maybe others in the industry. If we remained at robust levels.

Josh Weinstein: Yeah. Our brands are on a spectrum from having recovered past 2019 levels to not yet there. Some of that has to do, as you've heard me say in the past, was what their 2019 levels were to begin with. We're not patting ourselves on the back in some cases because they exceeded 2019 levels because they should have been higher then, and they are now with plenty of runway. I would say, the vast majority of our brands have, if we boil it down to ROIC, the vast majority of our brands have multiple points in the medium term that they're going to be able to take advantage of. And primarily, that's going to be due to continuation on the improvement we've been making on the revenue side. That's what the trajectory is for those brands.

Speaker Change: Yes.

Speaker Change: Our brands are on our on our spectrum from having recovered past 19 level to not yet there some of that has to do as you've heard me say in the past what Theyre 19 levels were to begin with and so we're not patting ourselves on the back in some cases, because they exceeded 2019 levels because they should have been higher than than they are now with <unk>.

Speaker Change: <unk> of runway I would say the vast majority of our brands have.

Speaker Change: If we boil it down to Iraq, the vast majority of our brands.

Speaker Change: Multiple points.

Speaker Change: In the medium term that we're going to be able to take advantage of and primarily that's going to be due to continuation on the improvement we've been making on the revenue side.

Speaker Change: And Thats, what the direct the trajectory is for those brands they are making jumped by leaps and bounds and they've got a lot more to go and I am excited about that.

Josh Weinstein: They are making jumps by leaps and bounds, and they've got a lot more to go, and I am excited about that.

Matthew Boss: Great. David, maybe just to switch gears, on your goal to return to the fortress balance sheet, how are you thinking about capital allocation priorities beyond debt paydown as you approach investment-grade metrics?

Speaker Change: Great and then David maybe just to switch gears on your goal to return to the fortress balance sheet. How are you thinking about capital allocation priorities beyond debt pay down as you approach investment grade metrics.

David Bernstein: As Josh said before, the immediate debt paydown is priority 1, 2, and 3. As I had indicated in my remarks, we're talking about potentially a $5 billion additional paydown. When you start thinking about 2026, we should be beyond investment-grade metric leverage. As a result of that, not only are we investing in ourselves in all the examples that Josh gave, but we will be considering other priorities. We'll be talking about that as we move forward into 2026 and beyond.

David: So as Josh said before.

Speaker Change: In the immediate.

Speaker Change: Debt pay down is priority, one two and three but as I indicated in my remarks, we're talking about potentially.

Speaker Change: Potentially a 5 billion dollar additional pay down and when you start thinking about 2026.

Speaker Change: Should be beyond investment grade metrics leverage and so as a result of that will be not only are we investing in ourselves and all the examples that Josh gave but we will be considering other priorities and we'll be talking about that as we move forward into 2026 and beyond.

Matthew Boss: Great. Congrats on the continued momentum.

Speaker Change: Great Congrats on the continued momentum.

David Bernstein: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from the line of Lizzie Dove with Goldman Sachs. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Lindsay desk with Goldman Sachs. Please proceed with your question.

Lizzie Dove: Hi there. Thank you so much for taking the question, and congrats on a great Q1. I guess going back to luxury for a second, you have Seabourn, you have Cunard. Obviously, the last few weeks we've had mixed commentary from other cruise companies about luxury. Curious just to zoom in on that. Anything you would kind of flag there and what you're seeing on the luxury trends specifically?

Speaker Change: Hi, there. Thanks, so much for taking the question and congrats on a great Q1, I guess going back to luxury for a second you know you have seaborne Yap Cunard obviously the last few weeks, we've had mixed commentary from other.

Speaker Change: Please companies about luxury curious just to zoom in on that anything you would kind of slack, there and what you're seeing on the luxury trends specifically.

Josh Weinstein: Yeah. Morning, Lizzie. Nothing interesting to talk about, I don't think. As you heard me say, Seabourn's been making great progress year over year, as has Cunard. Yeah, I'm sorry. I guess the answer is no. Short and sweet.

Speaker Change: Yes, good morning.

Speaker Change: Nothing nothing interesting to talk about I don't think as you heard me say seaborne has been making great progress year over year as as Qunar. So yeah.

Speaker Change: I'm sorry.

Speaker Change: I guess the answer is no.

Speaker Change: So Jordan suite.

Lizzie Dove: That's great to hear. I guess totally switching gears for a second, I'll ask about Celebration Key. You're now through most of Wave season. Curious just what you've been seeing there, how much the kind of consumer reception has been to the marketing you put around that, whether you're still on track to kind of open right at the end of summer. Just any updates you can give around that would be helpful. Thanks.

Speaker Change: That's great to hear and I guess totally switching gears for a second I'll ask about celebration key.

Speaker Change: Now through massive wave season, I'm curious just what you've been seeing that how much the kind of consumer reception has been to that marketing you put around that whether you're still on track to kind of opened right at the end of some of that just any updates you can.

Speaker Change: Give around that would be helpful. Thanks.

Josh Weinstein: Yep. Thanks. First of all, from an operational standpoint, everything is proceeding exactly on track. The teams are doing a phenomenal job, not only in the finishing up of the construction, but in the massive undertaking that is training and getting ready on the land-based operations themselves to be able to deliver the experiences that we want to deliver. We are seeing the premiums that we expected to see when we started this project a long time ago. Things are progressing honestly exactly as planned, which is a shout-out to the teams for doing all the right things.

Speaker Change: Yes, yes.

Speaker Change: No first of all from an operational standpoint.

Speaker Change: Everything is proceeding exactly on track and the teams are doing a phenomenal job not only in the in the finishing up of the construction, but in the the massive undertaking that is training and getting ready on the land based operations themselves to be able to deliver the experiences that we want to deliver.

Speaker Change: We are.

Speaker Change: Seeing the premiums that we expected to see.

Speaker Change: When when we started this project a long time ago.

Speaker Change: And so things are progressing exactly I honestly exactly as planned which is which is a shout out to the teams for doing all the right things.

Lizzie Dove: Great. Thank you.

Speaker Change: Great. Thank you.

Josh Weinstein: Thanks, Lizzie.

Speaker Change: Excellent.

Operator: Thank you. Our next question comes from the line of Vince Ciepiel with Cleveland Research. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of Vince <unk> with.

Speaker Change: Cleveland Research. Please proceed with your question.

Vince Ciepiel: Thanks. I wanted to lean a little bit more into land there. When would you expect the Celebration Key to kind of be peak noticeability in your booking surge in light of how that Carnival product books the opening and awareness of the island? Additionally, I know this is the new part of your land portfolio, but you have quite a sizable footprint already. I know there's expansion with, I think it's Half Moon Cay, Pier, an investment into the Alaska part of the portfolio. How are you thinking about your opportunity in the land stuff in years ahead?

Speaker Change: Thanks, I wanted to lean a little bit more into land there.

Speaker Change: What would you expect the celebration key to kind of be.

Speaker Change: Peak.

Speaker Change: Notice ability in your bookings surge in light of how that carnival product books, the opening and awareness of the island and then additionally.

Speaker Change: This is the new part of your land portfolio, but you have quite a sizable footprint already I know there is expansion with I.

Speaker Change: I think it's half Moon Cay, Pierre and investment into the Alaska part of the portfolio. Just how are you thinking about your opportunity in the land stuff in years ahead.

Josh Weinstein: Yeah. Thanks. Thanks, Vince. A bunch of questions there. As far as the impact of Celebration Key, I think it's pretty fascinating. We're still in make-believe land, right? Everything we're putting out on the marketing side really is in the imagination. I think that coupled with, as you said, the primary tenant there is going to be Carnival Cruise Line, a huge amount of which is short cruises, 3, 4, 5-nighters that have a much shorter window than booking on the 7s and 8s, means that we haven't seen by any stretch of the imagination, we haven't seen the full impact. Carnival hasn't seen the full impact on the benefits.

Speaker Change: Yeah. Thanks.

Speaker Change: Thanks, Ben so.

Speaker Change: Bunch of questions. There so as far as the impact of celebration of <unk> I think it's pretty fascinating.

Speaker Change: We're still a make believe land right. So everything we're putting out and on the marketing side really is in the imagination.

Speaker Change: And I think that.

Speaker Change: That coupled with as you said the primary tenant there is going to be carnival cruise line, a huge amount of which is short cruises three four or five nighters that have a much shorter window than booking on the sevens and eights.

Speaker Change: Means that we haven't seen that.

Speaker Change: But by any stretch of imagination, we haven't seen the full impact carnival hasn't seen the full impact on the benefits and I do think.

Josh Weinstein: I do think the ability to leverage it in operations and generate content and guest experience with our guests, with the trade, is going to be a springboard forward, which is a great thing for Celebration Key. We easily see a path where, by the end of the decade, what was about 6.5 million guests going through our Caribbean footprint in 2024 could be upwards of 11 million, which is a phenomenal thing. I think the thing that we're learning, which we haven't really benefited from in full, is how we brand and position our destinations themselves to make them part of the consideration set of the consumer. Because historically, it's very much been about just the cruise and the brand and then delight them when they're in our destination.

Speaker Change: The ability to the.

Speaker Change: 80 to leverage in operations and generate content and guest experience with our guests with the trade is going to be a springboard forward.

Speaker Change: Which is which is a great thing for them for celebration.

Speaker Change: We easily see a path where by the end of the decade.

Speaker Change: Was about $6 $5 million gas flowing to our Caribbean footprint in 2024 could be upwards of $11 million.

Speaker Change: Which is which is a phenomenon that I think the thing that we're learning, which we haven't really benefit from <unk> is how we position, how we brand and position our.

Speaker Change: Sure.

Speaker Change: Our destinations himself to make them part of the consideration set of the consumer.

Speaker Change: Because historically it has very much been about just the crews and the brand and then delight them when they're in our destination, but we have the ability to make it a driver for taking the crews to begin with and so we're starting to lean into that obviously with celebration key and were going to do more of that in celebration key is something that when.

Josh Weinstein: We have the ability to make it a driver for taking the cruise to begin with. We're starting to lean into that, obviously, with Celebration Key, and we're going to do more of that. Celebration Key is something that when we open, that's just phase 1. We've got plans that'll take us through the end of the decade to be able to significantly increase that throughput, which, as I mentioned, helps us drive that guest count up to about 11 million. With respect to Alaska, look, if you haven't been there, I strongly suggest you've got to do it by cruise. If you do it, you have to do a cruise land-sea package, because that is the greatest way to see the great state.

Speaker Change: When we opened that is just phase one.

Speaker Change: And we've got plans that will take us through the end of the decade to be able to significantly increase that throughput, which as I mentioned and helps us drive that guest count up.

Speaker Change: To about $11 million.

Speaker Change: With respect to with respect to Alaska.

Speaker Change: Look we if you haven't been there I strongly suggests you've got to do it by cruise and if you do it you have to do a cruise land Sea Packers because that is the greatest way to see the great state.

Josh Weinstein: It is a strategic advantage that we do have given the scope of our operations in Alaska, and we're going to continue to lean into that because it is one of the most popular itineraries and programs that we have in the whole portfolio.

Speaker Change: And it is a strategic advantage that we do have given the scope of our operations in a lab and Alaska and we're going to continue to lean into that because it is one of the most popular itineraries and programs that we have in the whole portfolio.

Speaker Change: Uh huh.

Vince Ciepiel: Great. I wanted to sneak one more in. You mentioned a little bit earlier on the European business. In the travel industry more broadly right now, there's a lot of talk on inbound, outbound for the US. I know that you source a fair amount of your European brands in Europe, and I would imagine a lot of the North American brands heavily over-index to North American guests. Anything that you've seen in your data on any shift in flow of inbound interest to the US, and if that at all is a big part of your business?

Speaker Change #100: Great I wanted to sneak one more in you mentioned a little bit earlier on the European business in the travel industry more broadly right now theres a lot of talk on inbound and outbound.

Speaker Change #100: For the U S and I know that you source a fair amount of your European brands in Europe, and I would imagine a lot of the north American brands heavily over indexed to North American guests, but anything that you've seen in your data on any shift in flow of inbound interest to the U S and if that at all as a big part of <unk>.

Speaker Change #100: Your business.

Josh Weinstein: Well, I guess I'll answer it in reverse. Is it a big part of our business? No, it's not a huge part of our business. We strategically try to put our ships where our guest base is. I think in the volatility that we talked about in Q1, certainly Canada was swept up in that. Now for us, that's 3% to 4% of our business, just to put it into context. Clearly everybody reads the news, and we're not immune from that dynamic. Going back to the strategy, by being able to target specific countries with specific brands that cater to their needs and preferences and position them where people can get to drive if they want to, it's a recipe for success for us in this environment.

Speaker Change #100: Well I guess I'll answer it in reverse is it a big part of our business.

Speaker Change #100: It's not a huge part of our business.

Speaker Change #100: We strategically tried to put our ships where our guest base is.

Speaker Change #100: I think in the volatility that we talked about in the first quarter.

Speaker Change #100: Certainly Canada were swept up in that now for us that's 3% to 4% of our business just to put it in context, but clearly we read that you're you know everybody reads of news and we're not we're not immune from from from that dynamic, but going back to the strategy by being able to target specific countries with specific brands.

Speaker Change #100: Cater to their needs and preferences and position them.

Speaker Change #100: Where people can get to.

Speaker Change #100: Drive if they want to it's a recipe for success for us in this environment.

Vince Ciepiel: Great. Thanks.

Speaker Change #100: Great. Thanks.

Josh Weinstein: Thanks. Operator, we have time for one more.

Operator, we have time for one more.

Operator: Thank you. Our final question comes from the line of Christopher Stathoulopoulos with SIG. Please proceed with your question.

Speaker Change #101: Thank you. Our final question comes from the line of Chris Stoffel apples with <unk>. Please proceed with your question.

Christopher Stathoulopoulos: Good morning, Josh, David, team. Thanks for taking my question. Going to close it out, I'll keep it to one, and hopefully try to, I guess, consolidate here the questions around demand, because I think at least the questions I'm getting here, investors are trying to tease out the health of the consumer and whether any weakness at this point is localized to a specific consumer demographic or region. If we use the airlines here as a proxy, there was a comment earlier on the call. Last week, US domestic basic economy closed in weakness, exact opposite of what you're seeing here. What is similar, it sounds like premium international demand similar.

Speaker Change #102: Good morning, Josh David team. Thanks for taking my question, so I'm going to close it out I'll keep it to one.

Speaker Change #101: And hopefully try to I guess consolidate here.

Speaker Change #101: The questions around the math because I think this is the question that I'm getting here investors are trying to tease out the health.

Speaker Change #101: Of the consumer and whether any weakness at this point is localized to a specific consumer demographic regions. So if we use the airlines here as a proxy there was a comment earlier on the call.

Speaker Change #101: Last week.

Domestic basic economy close in weakness.

Speaker Change #101: Opposite of what you are seeing here.

Speaker Change #101: It's similar it sounds like premium international.

Speaker Change #101: Demand similar so as we look across your brand scale from contemporary premium luxury and we adjust for mix shifts.

Christopher Stathoulopoulos: As we look across your brand scale from contemporary, premium, and luxury, and we adjust for mix shifts, the earlier question on regional source of travelers, is there anything that is different or unique with the pace of bookings or onboard spend at this point?

Speaker Change #101: The earlier question a question on regional source of travelers is there anything that is different or unique with the pace of bookings were onboard spend.

Speaker Change #101: At this point.

Josh Weinstein: I guess consolidated question, the short answer is no. Just keep in mind, airlines come out with a lot of commentary. We are different from airlines and even different from hotels. We don't rely on business. Business travel is not part of our portfolio. It is about the consumer and, good times and bad times, people take vacations. The unemployment rate in this country and the developed countries that we really source from are fantastically low. Does it mean that people want to think hard about how they spend their vacation dollar? Absolutely. Is it more important when times are stressful that they get away and take a vacation? Does it mean more to them? Absolutely. I think we've learned that since the turn of this decade, how much importance people place on it.

Speaker Change #101: So I guess consolidated question the short answer is no.

Speaker Change #101: Keep in mind, we're airlines come out with a lot of commentary.

Speaker Change #103: Commentary, we are different from airlines and even different from hotels, we don't rely on business business travel is not part of our.

Speaker Change #103: Portfolio. So it is about the consumer and <unk>.

Speaker Change #103: Good times and bad times people take vacations.

The unemployment rate in this country in the developed countries that we really sourced from our fantastically low.

Speaker Change #103: So does it mean that people want to think hard about how they spend their vacation dollar absolutely.

Speaker Change #103: Is it more important when times are stressful that they get away and taking a vacation does it mean more to them absolutely.

Speaker Change #103: And I think we've learned that.

Speaker Change #103: Since the turn of this decade.

Speaker Change #103: How much importance people people place on it so.

Josh Weinstein: I think we are resilient and we'll continue to work hard to deliver. Since you said it was one question, thank you for doing what I asked. I think we'll end it there. Thanks, everybody, and talk to you next quarter.

Speaker Change #103: I think we are resilient and we will continue to work hard to deliver so.

Speaker Change #103: Since you said it was one question. Thank you for.

Speaker Change #104: Doing what I asked.

Speaker Change #103: Well, we'll end it there so thanks, everybody and talk to you next quarter.

Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #105: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.