Royal Caribbean Group (NYSE: RCL) inches down in pre trading session on Wednesday as the firm said It was on track for record bookings in January and March after the company reported a smaller-than-expected quarterly loss due to pent-up travel demand. The latest sign of the industry emerging from the pandemic-induced pause encouraged the firm’s investors.
Cruise lines have reported strong booking volumes from affluent Americans for the so-called “wave season,” which runs from January to March and during which operators offer special cruise deals and discounts for the entire year.
North America sailings were booked in line with record levels for the entire year, according to Royal Caribbean, while bookings for European itineraries increased during the wave season and were higher than in 2019.
“A big question for investors is what the shape of the recovery looks like, given the macro challenges, and positive commentary around booking dynamics during the early part of WAVE season is encouraging,” M Science analyst Michael Erstad said.
Booking volumes for the cruise line in the fourth quarter were also significantly higher than in the same period in 2019, before the pandemic outbreak shut down the industry.
Occupancy rates have strongly rebounded since the pandemic-era restrictions were lifted, and the relaxation of on-board COVID-19 protocols has increased spending on casinos and spas.
According to Refinitiv IBES data, it reported a fourth-quarter loss of $1.12 per share, compared to analysts’ expectations of a loss of $1.34.
According to William Blair analyst Ryan Sundby, the company is making progress toward returning to sustained profitability and more normalized operations, with booking trends, load factors, and guest mix all returning to historical levels.
However, the cruise line forecasts an adjusted profit of $3.00 to $3.60 per share in 2023, compared to an estimated profit of $3.31.
Inflationary pressures and supply chain disruptions continue to put downward pressure on costs across many industries, including food and beverage, according to Chief Finance Officer Naftali Holtz in a post-earnings call.
