By Granth Vanaik
(Reuters) -Royal Caribbean Group on Thursday lifted its full-year profit forecast for a third time and said bookings for the next year were “significantly outpacing” pre-pandemic levels by a wide margin, sending its shares up about 3%.
Cruise operators are reaping the rewards as travelers gravitate to cruise vacations that are cheaper compared to taking a land-based holiday.
This has given the companies the ability to hike itinerary prices, especially in North America and Europe, as occupancy levels now approach pre-pandemic levels.
Royal Caribbean said occupancy in the third quarter was higher than that reported in the second quarter.
“As we look into 2024, we have booked over double the amount of pre-cruise revenue compared to this, year with more guests engaging before their cruise and at higher prices,” CEO Jason Liberty said on a post-earnings call.
Royal Caribbean now expects its annual adjusted profit between $6.58 and $6.63 per share, compared with earlier forecast of $6.00 to $6.20.
“We cannot find anything to pick at in this report, and believe this is much better than expected,” Barclays analyst Brandt Montour said.
However, the company said its full-year earnings per share would take an 18-cent hit from higher fuel prices and a stronger dollar.
The company also said the ongoing military conflict in the Middle East is expected to hit its annual profit by 3 cents per share.
Royal Caribbean also expects fourth-quarter adjusted profit between $1.05 and $1.10 per share, compared with expectations of $1.
Its quarterly total revenue of $4.16 billion beat estimates of $4.08 billion, while its adjusted profit of $3.86 per share also topped expectations, according to LSEG data.
Peer Carnival in September narrowed its annual loss forecast and posted a third-quarter profit, but investors showed deep concerns around steeper fuel costs.
Rival Norwegian Cruise Line will be reporting third-quarter results on Nov. 1.
(Reporting by Granth Vanaik in Bengaluru; Editing by Maju Samuel)
