Travel demand is strong as vacationers look to experiences: Royal Caribbean CFO

the airline industry is hitting turbulence cruise lines are charting a different course Royal Caribbean beating Wall Street expectations on the top and bottom lines the cruise liner citing strong demand and strength and onboard spend as key drivers in first quarter earnings meanwhile the company also looking at an upbeat profit forecast for the year here to discuss is Royal Caribbean group CFO naftali Holtz thank you for joining us here today so record bookings by a couple different metrics uh strong Guidance just give us an overview of your quarter please yeah hi Jared good to be with you we were very very pleased with uh what we reported this morning we continue to see very strong demand for our vacation experiences um we increased our Revenue guidance for the year um and obviously the the earnings as well we see a lot of very engaged consumers new to our category coming in we increased our new to cruise category by 16% um versus the first quarter last year um and we're seeing continued strength both on um on ticket as well as onboard experiences that really engage consumers that comes to spend the time and vacation uh with us as we're very pleased both on the on the revenue side and obviously 60% year-over-year earnings growth now T um the numbers have been consistently strong and I know that your forward bookings are also ahead of where they were last year at this time are there any signs of slowing whatsoever as you look across your different properties as you look at the amounts that people are spending on ship Etc yeah so as as you noted uh we see strength across the board um obviously the booking levels uh the pricing uh for that and remember cruise is an exceptional value proposition for for people uh today and and we see those choices coming to us to our to Our Brands to our vacation experiences uh we see more more people engaged on uh buying more uh experiences on the ships actually uh planning and booking them earlier than before just to make sure that when they get on the ship they get the the best vacation experiences there um very very um strong across uh Our Brands across demographics and itineraries obviously the US and and the Caribbean has been exceptionally strong that has been very consistent and we've seen that also in Europe Alaska and other um other itineraries and uh that we operate in so it's it's really strength across the board now Ty I'm looking at a chart on our Wi-Fi interactive of RCL that's Royal Caribbean a five-year chart and this shows that you have now this stock has exceeded uh the the highs that we saw before the pandemic and I got to say when I saw this drop here I had to wonder when is this stock is this stock going to be able to come back and I said that for a lot of travel stocks and there you've done it any hangovers from the pandemic or is it just Full Speed Ahead now thinking about the future yeah we're very much uh you know looking forward to the future obviously when we went through the pandemic we had to raise capital and dud to shareholders so you know we had to kind of work extra hard to overcome that um and we've done that through making sure first that we delivered the experiences that our customers want um and need and and really that has been a driver of that at the same time growing the Top Line we really focused on cost to making sure that we enhance margins and that allowed us to pay down uh the debt that um and some of the debt that we've raised through through the pandemic and obviously overcome the dilution but our our focus is Straight Ahead we uh we have our Trifecta program it was a a program that basically allowed us to get back to base camp and now we expect to achieve it this year but our Ambitions are much much higher we want to continue to grow the the the company moderate capacity growth moderately uh grow our yields strong cost control enhanced margins and we're doing that we're delivering uh ships uh this year and over the next couple of years we have kind of theas that just delivered Utopia we're investing in destinations we just um earlier this year opened the expansion of Coco K we have announced two other developments in one in the Bahamas and one in in Mexico that are creating amazing Beach experiences for our customers we're investing in our technology in our commercial um um um apparatus so there's a lot of exciting things for us so for us this is uh just uh exciting years ahead we've stay very very focused that we play in a $ 1.9 trillion vacation Market we're a $65 billion category so you you you can see that there's so much more opportunity in the years to come to continue to grow the business and take share from that amazing and and very attractive Market um now T what's going on on the pricing front as you see this continued strong demand how much pricing power do you feel you have and those forward bookings that you're seeing what what price have you taken on those yeah so first um you know it's a very um I think it's important to to note that cruise remains a very strong value proposition for the consumer you know historically before the co the pandemic we had probably 10 to 15% discount to landbased Vacation uh two years ago when we were starting to come back we were around 45% it was just very very compelling so we've closed the Gap a little um but we think there's still opportunity to close the gap to landbased vacation and we're doing that with the offerings and the experiences we offer the new ships the new destination making sure that we are tailoring the vacation to the consumer and what we found is that if you do that um obviously people want to to spend on on those spend on experiences and really tailor th those vacations for themselves so we've seen uh great uh um progress on that and and we think we can do uh more as we as we continue to grow the company thanks na T good to see you thank you you too

Channel: Yahoo Finance

Views: 1,110

Keywords: Yahoo Finance, Personal Finance, Money, Investing, Business, Savings, Investment, Stocks, Bonds, FX, Currencies, NYSE, Equities, News, Politics, Market, Markets, Yahoo FInance Premium, Stock market, travel

Id: ZGm8DHkbW_4

Length: 5min 55sec (355 seconds)

Published: Fri Apr 26 2024