MIAMI — Royal Caribbean Group said it was set for record bookings during the January-March period after the company posted a smaller-than-expected quarterly loss on pent-up travel demand.
Shares of the company rose about five percent in early trade as investors were encouraged by the latest sign of the industry sailing out of the pandemic-induced pause.
Cruise liners have reported strong booking volumes from well-to-do Americans for the so-called “wave season”, a period between January and March where operators offer special cruise deals and discounts for the year.
Royal Caribbean said North America sailings were booked in line with record 2019 levels for the full year, while bookings for European itineraries accelerated during the wave season and were higher than 2019.
“A big question mark from investors is what the shape of recovery looks like, given macro challenges, and positive commentary around booking dynamics during the early part of WAVE season is encouraging,” said M Science analyst Michael Erstad.
The cruise operator’s booking volumes in the fourth quarter were also significantly higher than the corresponding period in 2019, before the pandemic outbreak shut down the industry.
Occupancy rates have strongly rebounded since restrictions imposed during the pandemic were lifted, while the easing of on-board COVID-19 protocols has boosted spending on casinos and spas.
It reported a fourth-quarter loss of $1.12 per share, compared with analysts’ expectations of a loss of $1.34, according to Refinitiv IBES data.
William Blair analyst Ryan Sundby said in a note that the company continues to show progress in returning to sustained profitability and more normalized operations with booking trends, load factors and guest mix all moving to historical levels.
However, the cruise operator forecast 2023 adjusted profit between $3.00 and $3.60 per share, compared with estimates for a profit of $3.31.
Inflationary pressures and supply chain disruptions continue to put pressure on costs across many categories, including food and beverage, Chief Finance Office Naftali Holtz said in a post earnings call.
—REUTERS
Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Sriraj Kalluvila
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