Royal Caribbean Cruises is to continue reducing capacity in Europe despite reporting improved overall profits in the first quarter of the year.
The parent company of Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises said demand for a two-month European summer 2014 deployment of the world’s largest cruise ship, Oasis of the Seas (pictured), to coincide with scheduled maintenance dry-dock in Rotterdam had been “exceptionally strong”.
However, the organisation said: “Despite this micro-deployment, the company expects to further reduce its European deployment year-over-year by another 10% and also expects that European itineraries will be approximately 25% of its overall 2014 capacity.”
The number of Royal Caribbean International ships in the Mediterranean is being reduced for the second year running in 2014, from six to four, while three vessels will continue to run ex-UK sailings and one will operate northern Europe departures.
Announcing first quarter net profit of $76.2 million against $47 million in the same period last year, Royal Caribbean said both onboard revenue and ticket pricing improved, contributing to a rise in net yield of 3.6%.
Booking levels for 2013 are on average 5% ahead of last year with improved load factors, despite the impact of negative media coverage of ship troubles at rival Carnival.
“The overall demand environment is in line with the company’s expectations from February, but as usual there are regional fluctuations,” the company said.
“Bookings from North America have remained strong since the beginning of the year, with the exception of a modest disruption to Caribbean demand which the company attributes to adverse industry media coverage.
“Despite the difficult economic news in the EU, demand from European-sourced guests strengthened in early February and the company expects pricing improvement from the region for the year.
“Demand from China has weakened somewhat due to itinerary changes related to the territorial dispute with Japan.”
Chairman and chief executive Richard Fain said: “It was a gratifying first quarter.
“Ticket revenues were better than expected, costs were well controlled and it was encouraging to see record guest satisfaction and noticeable improvements in onboard spending as a result of our revitalisation efforts.”
Chief financial officer Brian Rice added: “Our brands have continued to generate solid demand despite a soft economy in Europe and recent adverse industry media coverage.
“The consumer continues to recognise that we offer a great vacation at an excellent value.”