Royal Caribbean ‘well-positioned’ despite macroeconomic uncertainty

The boss of the Royal Caribbean Group has said the company is “well-positioned” to grow its share of the holiday market despite an outlook of macro-economic uncertainty.  

The brand, which comprises Royal Caribbean, Celebrity Cruises and Silversea, registered its “best wave period” in the company’s history as first quarter revenue reached $4 billion.

Royal Caribbean president and chief executive officer Jason Liberty acknowledged “heightened uncertainty” in the current landscape but highlighted a continuing trend in customers prioritising spend on holidays.

Liberty said on an earnings call: “We look across the current macro landscape, we recognise that there is heightened uncertainty, however research, including the direct surveying of our customers, continues to show that the propensity to cruise remains encouraging.

“We are certainly not immune to macro-volatility, but what we’re seeing on the ground, in our bookings and the real-time spending occurring on our ships, is that consumers are still prioritising experiences, planning to spend more on them this year and are seeking value that we are well-positioned to offer.”

More: Royal Caribbean Group reports ‘record bookings’ during wave period

He added a survey of Royal Caribbean customers from this month showed value for money had risen in importance with nine out of 10 consumers saying it was “crucial” for holiday plans.

In the same survey, seven out of 10 said their intent to spend on leisure travel was “the same or more” over the next 12 months, which outpaced major material purchases.

This correlated with the line’s sales trends within the quarter which saw an uplift in demand and pricing, alongside “high-quality customers spending well” on ships, which Liberty said “keeps elevating” and “counters” some reporting around consumer confidence.

“When financial concerns impact lifestyle or spending, travel is not the first place consumers indicate they will pull back,” he added.

Travel was "not the first place" consumers indicated they would pull back on when financial concerns impact lifestyle, with Liberty describing cruisers in particular as "more financially secure and more likely to protect their travel budgets during times of uncertainty".

He added: “We are confident in our growth strategy and the incredible opportunity ahead of us continuing to win a greater share of the growing $2 trillion vacation market.”

He highlighted the group had also made “further progress” over the quarter on shifting its strategy from “a vacation of a lifetime” to “a lifetime of vacations”, revealing 40% of the group’s bookings came from loyalty programme members and the post-cruise booking window for these clients had shortened.

Liberty added that over the next three years, the group would introduce seven ships to its combined fleet, take its total of private destinations from two to seven and launch Celebrity Cruises on European rivers.