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US and UK drive RCCL Europe itinerary bookings, return to China seen next year

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 09 February 2023 09 February 2023

The US and British source markets are driving bookings for Royal Caribbean Cruises Ltd’s (RCCL) cruises in Europe, while the company sees return to China next year, company officials said in a conference call.

“We have seen improved booking trends for these itineraries so far in Wave, particularly from the U.S. and the UK,” said Naftali Holtz Chief Financial Officer of the Miami based company.

“We expect the improvement to continue, supported by our global sourcing model. Constant currency net yields are expected to be higher than 2019 in all four quarters with more growth for Q2 through Q4, when load factors return to normal,” he said, adding that the group would have 17% of its capacity in Europe this year.

Michael Bayley, President and Chief Executive Officer of the group’s Royal Caribbean International contemporary market unit, said the environment in China had improved significantly. “So, things have started to normalize, and they seem to have got over that very difficult period,” he said.

There are currently two impediments to the China cruise market opening up. “One of them is there's still a ban technically on cruising and group travel in China. And also, there's a requirement from the Japanese that Chinese tourists have to test and potentially could be quarantined. We understand that both of these conditions will drop away at some point during this first half,” Bayley said.

“That's what we've been led to believe, and we believe that that's going to happen. As soon as those two conditions change, then obviously, the market will reopen, and we're thinking that it will be late '23, and we're kind of thinking that '24 probably, realistically, the China market will be back. But, obviously, that's based upon how we understand and see the situation currently,” he stated.

RCCL prices $700 million notes at 7.250%

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 09 February 2023 09 February 2023

Royal Caribbean Cruises Ltd. (RCCL), the world’s second largest cruise shipping group, said it had priced its private offering of $700 million aggregate principal amount of 7.250% Senior Notes due 2030.

“The Company intends to use the proceeds from the sale of the Notes to repay principal payments on debt maturing in 2023 and/or 2024,” it said in a statement.

The Notes would mature on January 15, 2030. “The Notes will be guaranteed on a senior unsecured basis by RCI Holdings LLC, which owns 100% of the equity interests of certain of the Company's wholly-owned vessel-owning subsidiaries,” RCCL said.

Royal Caribbean Group expects first quarter loss, but demand outlook strong

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 07 February 2023 07 February 2023

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.

Royal Caribbean Group logs small operating profit in final quarter

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 07 February 2023 07 February 2023

Royal Caribbean Group, the world’s second largest cruise shipping group, recorded a small operating profit in the final quarter of 2022, while the figure for the full year as well as net result for both the last three months and full year 2022 showed much reduced losses.

The group made an operating profit of $15.4 million in the fourth quarter of 2022 compared to a loss of $1,031.7 million a year earlier. Net loss was reduced to $500.2 million from $1,356.9 million, while revenues soared to $2,603.9 million from $982.2 million.

For the full year 2022, the company reported a net loss of $2,155.9 million compared to a loss of $5,260.5 million in 2021. Operating loss narrowed to $763.9 million from $3,870.9 million as revenues increased to $8,840.5 million from $1,532.1 million.

"2022 was a pivotal year as we successfully returned our business to full operations and delivered memorable vacation experiences to 6 million guests," said Jason Liberty, president and chief executive officer, Royal Caribbean Group. "We also returned to positive Adjusted EBITDA and Operating Cash Flow by consistently growing revenue and controlling costs. Our teams have worked tirelessly to deliver the best vacation experiences, responsibly, and we are grateful for their extraordinary efforts,” he said in a statement.

Fourth Quarter 2022:

Load Factors were in line with guidance at 95%, with Caribbean sailings reaching 100%, and holiday sailings close to 110%.

Total revenues per passenger cruise day were up 3.5% as-reported and 4.5% in Constant Currency, compared to the fourth quarter of 2019.

Total revenues were $2.6 billion, Net Loss was $(500.2) million or $(1.96) per share, Adjusted Net Loss was $(284.9) million or $(1.12) per share, and Adjusted EBITDA was $409.3 million.

Full year 2022:

Load Factors were 85% overall, full fleet back in operation since June of 2022.

Total revenues were $8.8 billion, Net Loss was $(2.2) billion or $(8.45) per share, Adjusted Net Loss was $(1.9) billion or $(7.50) per share, and Adjusted EBITDA was $711.6 million.

Gross Cruise Costs per APCD increased 4.9% as-reported and 5.8% in Constant Currency, compared to the fourth quarter of 2019. NCC, excluding Fuel, per APCD increased 3.9% as-reported and 4.7% in Constant Currency, compared to the fourth quarter of 2019.

Gross Cruise Costs per APCD and NCC, excluding Fuel, per APCD for the fourth quarter included $1.23 per APCD related to health protocols and one-time lagging costs related to fleet ramp up.

The group expects transitory costs related to health protocols and ramp up of operations to be largely gone in 2023 as the majority of crew have returned and protocols have eased. In the fourth quarter, the company continued to benefit from multiple actions taken to reshape its cost structure and to help partially offset inflationary and supply chain challenges.

"Fourth quarter results reflect the continued strong demand for our vacation experiences and our teams' ability to manage costs in a complicated environment while staying focused on delivering the best vacation experiences expected by our guests," said Naftali Holtz, chief financial officer, Royal Caribbean Group. "The benefit from multiple actions we have taken during the last few years to improve margins continue to yield results, as we focus on executing our proven formula of moderate yield growth and strong cost controls."

The company recorded a loss contingency of $130 million in the fourth quarter related to a Helms-Burton Act claim which the company continues to vigorously defend, it said.

Fincantieri floats out Seven Seas Grandeur

Details: Written by Teijo Niemelä Teijo Niemelä; Category: More News More News; Published: 03 February 2023 03 February 2023

The float out ceremony was held at the Ancona shipyard for Seven Seas Grandeur, the third luxury cruise ship that Fincantieri is building for Regent Seven Seas Cruises, the luxury brand for Norwegian Cruise Line Holdings Ltd. The delivery is scheduled for November this year.

Like the first two vessels of her class Seven Seas Grandeu registers 55,500 gross tons with accommodation for only 746 passengers, with among the highest staff-to-guest ratio in the industry. She is built using the very latest in environmental protection technologies, while the interiors are particularly sophisticated, with every attention paid to the guest experience.

Besides Regent Seven Seas Cruises, to which Fincantieri delivered Seven Seas Explorer (2016) and Seven Seas Splendor (2020), Norwegian Cruise Line Holdings Ltd. operates Norwegian Cruise Line’s (NCL), which will receive other five Prima Class ships from Fincantieri, and Oceania Cruises, for which the Group has in its orderbook two new-generation cruise ships which will start the Allura-class.