Royal Caribbean Group said it expects to report a loss for the first quarter of 2023, but noted that the outlook on the demand side was strong, while three ships are scheduled to join its fleet this year, the company said in a statement.
First Quarter 2023 Outlook:
Net Yields are expected to increase 0.5% to 1.5% as-reported and 1% to 2% in Constant Currency compared to 2019, with load factors reaching 100% and total revenues per passenger cruise day up in the mid-to-high single digit range in both as-reported and Constant Currency compared to 2019.
NCC, excluding Fuel, per APCD is expected to increase approximately 8.3% as-reported and approximately 8.5% in Constant Currency, compared to 2019, including 320 basis points of lagging transitional costs, additional structural costs, and timing of expenses.
Adjusted Loss per Share is expected to be in the range of $(0.65) – $(0.85).
Demand environment encouraging
The company is very encouraged about the demand environment for 2023. Booking volumes in the fourth quarter were significantly higher than the corresponding period in 2019, culminating in record booking weeks for the Group for both Black Friday and Cyber Monday.
Momentum continues into early 2023 and the company is experiencing a record-breaking WAVE season. Overall, the seven biggest booking weeks in the company's history have occurred since the middle of November 2022, including the first five weeks of WAVE.
The booking window has continued to move back to normal, providing further confidence in forward looking business, as guests plan for the future. Consumer spending onboard and pre-cruise purchases continue to exceed prior years driven by greater participation at higher prices, indicating quality and healthy future demand.
The cumulative booked position remains well within historical ranges at record rates and has improved significantly since November. North America sailings, many of which visit Perfect Day at CocoCay, are leading the way and are booked in line with record 2019 levels for the full year and ahead for the second quarter through the fourth quarter. Bookings for European itineraries have been accelerating during WAVE and are now higher than 2019.
"Leisure travel strength continues as consumer spend is shifting towards experiences, with cruising remaining an attractive value proposition," said Liberty. "The quality demand trends further exhibit the strength of our brands and the growing propensity to cruise."
As of December 31, 2022, the Group's customer deposit balance was at a record $4.2 billion.
Capital expenditure of $4.1 billion seen in 2023
Capital expenditures for the full-year 2023 are expected to be approximately $4.1 billion, based on current foreign exchange rates and are predominantly related to the company's new ship order book.
The company expects to take delivery of three new ships in 2023 including Icon of the Seas, Celebrity Ascent and Silver Nova. All ship orders have committed financing in place.
Non-new ship related capital expenditures are expected to be $0.5 billion. Capacity changes for 2023 are expected to be 14% compared to 2019. Capacity changes for 2024, 2025 and 2026 are expected to be 10%, 5%, and 6%, respectively. These figures do not include potential ship sales or additions that the company may elect in the future, the company said.
