Royal Caribbean profits soar as travelers pay ‘record ticket prices’ – in wake of teenager Levion Parker jumping overboard
- Royal Caribbean saw stronger than normal demand as Americans took to sea
- More than half of the cruise line’s profit growth came from price increases
- The share price was near a record high on Friday and is up 17 percent this year
Cruise operator Royal Caribbean has the wind in its sails.
The company said this week that rising demand for seaside holidays has allowed it to sell tickets at record prices, doubling its profit growth.
It comes just weeks after a 20-year-old went missing after jumping overboard from one of his ships between Grand Inagua Island and Cuba.
Royal Caribbean Group’s first-quarter net income was $360 million, compared to a loss of $48 million in the same period last year.
“Wow, what a great start to the year,” CEO Jason Liberty said this week when announcing the results. “What happened over the past three months was even better than our already high expectations.”
Cruise operator Royal Caribbean said this week that rising demand for sea holidays has allowed it to sell tickets at record prices. The photo shows passengers disembarking from the Royal Caribbean Cruise Ship Allure of the Seas
This month, 20-year-old Levion Parker jumped from the deck of a Royal Caribbean cruise ship
In light of the strong increase in ticket sales, Royal Caribbean has raised its annual profit forecast for the second time.
“Things continue to accelerate and the thirst or hunger for our brands,” Liberty said on a post-earnings call.
The success comes even though the quarter coincides with the ‘golf season’: the period after the new year when demand generally decreases and operators have to reduce prices to generate revenue.
In April, the company, which also operates Celebrity Cruises, posted record bookings ‘both in volume and price’ with slightly more expensive, albeit smaller ships.
The operator transported just over 2 million passengers in the first quarter, almost 14 percent more than a year earlier.
Not only that, Liberty noticed that customers are spending more while on cruises and booking cruises even further in advance.
Higher ticket prices have helped protect the company against slightly higher net cruise costs expected this year due to increased dry dock days, when ships are taken out of the water for maintenance.
Canceled trips to the Red Sea due to ongoing conflicts have also impacted revenues.
It has also seen slightly higher fuel costs, spending $304 million in the last three months, compared to $302 million during the golf season quarter last year.
Royal Caribbean’s share price flirted with an all-time high on Friday – trading around $140 and up more than 16 percent so far this year
Levion Parker went missing after jumping overboard from one of Royal Caribbean’s ships between Grand Inagua Island and Cuba
The company expects net cruise costs excluding fuel to rise about 5.5 percent this year, up from the previous forecast of about 4 percent.
Royal Caribbean’s stock price flirted with an all-time high on Friday, trading around $140 and up more than 16 percent this year.
“I remember owning the shares in 2022 and every client made me sad about it,” Peter Ahluwalia, manager at Belinvest Global Equity Fund and chief investment officer at Swiss Partners Group, told Reuters.
“We are currently achieving a return on equity of almost 45 percent, which is quite incredible,” he added.