Royal Caribbean just reported it's had the best start to the year in its company's history, and cruise fans are a big reason why.
While some areas of travel are reporting troubling numbers related to an economic downturn, Royal Caribbean Group sees its loyalty program as being an economic moat protecting them.
The company's fiercely loyal cruisers are proving to be quite the powerhouse. Consumer habits shift a lot across the economy, but Royal Caribbean’s loyalty program is helping it outperform expectations.
"Our unified loyalty programs connect all our brands under one ecosystem, encouraging repeat travel and unlocking more opportunities to engage across ocean and river cruising along with our exclusive destinations," said Royal Caribbean Group CEO Jason Liberty.
The numbers shared during the company's first quarter earnings call on Tuesday exemplify how well customer loyalty factors into the cruise giant's bottom line.
Loyalty is driving revenue
Usually cruise lines tout how many new cruisers they attract, but this time Royal Caribbean Group executives focused on repeat business and how it's making a difference.
Nearly 40% of bookings in 2024 came from loyalty program members during the quarter. More importantly, loyalty members spend 25% more per trip than non-members.
In fact, Mr. Liberty shared repeat cruisers are now twice as likely to book through the Royal Caribbean app compared to non-members.
That's a big factor to have its customer loyalty leading the company's economic charge ahead, and a sign they're doing things right.
Deepening loyalty through status matching
Royal Caribbean Group also believes one change they made is having an impact on keeping customers in their ecosystem.
In May 2024, the company unveiled status matching across its brands, and that is making a difference.
They're seeing cross-brand bookings increasing, and that means more guests are trying different styles of vacations without ever leaving Royal Caribbean Group’s portfolio.
"The ecosystem is working. Cross-brand bookings are increasing, loyalty members are more likely to book in the app, and spend significantly more per trip," said Mr. Liberty during the call.
They call it "a commercial flywheel" because it turns as the customer becomes more invested in the RCG brands.
With each cruise someone takes across the brands, it fuels a fuels deeper loyalty and more engagement.
When you add in new ships and private destinations opening over the next few years, it gives loyal cruisers more reasons to stay inside Royal Caribbean’s world.
Star of the Seas will launch this summer, followed by Legend of the Seas next year. Plus, there's going to be new beach clubs and Perfect Day Mexico opening over the next three years.
Loyal cruisers are so valuable with economic uncertainty
Repeat business is always good to have, but much more so when the economic situation is not so clear.
Generally speaking, when there are economic concerns, consumers may cut back. However, the public is reluctant to give up their vacations, especially among committed cruise guests.
Surveys show 9 out of 10 consumers prioritize value for money when planning vacations — an area where cruising beats land vacations.
Royal Caribbean sees no signs of loyalty members trading down or cutting spend.
"Cruisers are more financially secure and more likely to protect their travel budgets during times of uncertainty," Liberty said.
"When financial concerns impact lifestyle or spending, travel is not the first place consumers indicate they will pull back."
