Royal Caribbean Group, the world’s second largest cruise shipping company, has significantly reduced its losses in the second quarter as load factor hit 82% in the review period, the company said in a statement.

Second quarter operating loss narrowed to $218.6 million from a loss of $1.02 billion in the same period last year, while net loss narrowed to $521.6 million from $1.35 billion.

“Second quarter results exceeded the company's expectations driven by better revenue and cost performance. Second quarter load factors were 82%. Load factors increased to almost 90% in June, with Caribbean itineraries averaging over 100%,” the company said.

Total revenues per passenger cruise day were at record levels and up 4% as reported and 5% in constant currency versus the second quarter of 2019.

Gross Cruise Costs per available passenger capacity day (APCD) improved 2.4% as reported and 1.9% in constant currency, compared to the first quarter 2022. Net Cruise Costs (NCC), excluding fuel, per APCD improved 16.5% as reported and 16.2% in constant currency, compared to the first quarter of 2022.

Gross Cruise Costs per APCD and NCC per APCD for the second quarter included $7.75 per APCD related to enhanced health protocols and one-time costs to return ships and crew back to operations.

Customer deposits hit record high of $2 billion

As of June 30, 2022, the Group's customer deposit balance was $4.2 billion, a record high for the company. “This represents an increase of about $600 million over the previous quarter despite the significant quarter-over-quarter increase in revenue recognition,” the company said.

In the second quarter, approximately 90% of total bookings were new versus future cruise credit (FCC) redemptions. Now that the full fleet has returned to service and load factors are nearly 90%, the company expects customer deposits to return to typical seasonality. 

Approximately 20% of the customer deposit balance as of the end of the second quarter is related to FCCs and about 60% of the FCC balance accumulated since the start of the pandemic has been redeemed. Of the redeemed FCCs, about half have already sailed resulting in revenue being recognized. For new bookings, the Group has returned to typical booking and cancellation policies, which were relaxed during the pandemic.

Liabilities of the group totaled at $30.55 billion at the end of the quarter, an increase from $27.17 billion year-on.