Two of the biggest cruise companies in the world shared different outlooks on how they see the rest of the year going.

On April 29, Royal Caribbean Group released its first quarter results, revealing the company is seeing strong demand for its products, ranging from Royal Caribbean's Icon of the Seas to Celebrity Cruises' Celebrity Ascent. 

The surge in demand isn't slowing down, either. RCG reported that they are 86% booked for 2025 and warned of higher prices for last-minute cruisers. 

"Bookings for 2025 have remained on track, cancellation levels are normal, and we continue to see excellent close-in demand," said Jason Liberty, Royal Caribbean Group President and CEO, during the company's Q1 earnings call.

Record bookings continued into April, with Liberty reporting that the company's bookings were greater than during the same period last year. 

However, Norwegian Cruise Line's first quarter results weren't as positive. 

Norwegian Cruise Line Holdings (NCLH) posted its earnings the very next day. Revenue for Norwegian came in at $2.13 billion, below the estimated $2.15 billion as per data compiled by LSEG. This means that the company's quarterly revenue declined 3%, marking the first year-over-year decline since the second quarter of 2021. 

Norwegian also reported adjusted profit of 7 cents per share, below estimates of 9 cents. Consequently, NCLH's stock tumbled 9%, as reported by Reuters. 

The company warned of weak consumer spending on pricier voyages, citing growing concerns about a possible recession that may be affecting spending.

One area they are seeing softness in is European cruises. 

“[Europe] was actually booking really, really well till about a month or two ago. And then the American consumer seemed to be a little skittish about doing far-from-home travel,” CEO Harry Sommer told CNBC.

Now, the annual net yield is expected to increase between 2.0% and 3.0%, compared to its earlier forecast of 3.0%. In contrast, Royal Caribbean raised its annual profit forecast. 

Despite the disappointing Q1 results, Sommer believes the cruise industry has an advantage during economic turmoil because of the value proposition compared to land-based vacations. 

“You know, you may have a weak month, a weak quarter, but consumers continue to take vacations,” Sommer said. “It’s sort of one of their God-given rights, and they enjoy them...they come back.”

While the US economy might have a few question marks, Royal Caribbean doesn't see any slowdown on its end.

Royal Caribbean Group released its first quarter results and blew past expectations and raised its full-year guidance.

The results indicate the company is seeing strong demand for its products, reinforcing the trope of experiences over products.

"Our strong first quarter results are a testament to the enduring appeal and attractive value proposition of our leading brands and the incredible vacations they deliver," said Jason Liberty, Royal Caribbean Group President and CEO.

Royal Caribbean Group’s first quarter results point to a company thriving, fueled by record bookings, improved margins, strategic investments, and newly regained investment-grade financial strength.

First quarter by the numbers

Royal Caribbean Group saw good indicators all around for its products and showed a healthy return in the quarter.

• Report Q1 earnings: $2.70 EPS vs guidance, $2.71 Adjusted EPS.
• Total revenues of $4.0 billion, Net Income of $0.7 billion.
• Adjusted EBITDA $1.4 billion — margin strength is key.

About 2.2 million guests took a cruise with Royal Caribbean Group in the quarter, which is a 9% increase year over year.

Record breaking demand

The first few months of any year is known as "WAVE season" because it acts like an ocean wave carrying bookings throughout the rest of the year.

This was a very good WAVE season for Royal Caribbean, and that continued into April. Bookings in April still stronger than last year, showing momentum is sustained.

The company reported "record bookings during WAVE season."

"Bookings for 2025 have remained on track, cancellation levels are normal, and we continue to see excellent close-in demand," said Liberty.

Even in April this held true, "during April, the company's bookings were greater than the same period last year, including continued strength in close-in bookings"

Executives continue to believe that consumers are spending on experiences (vacations) over material goods.

How Royal Caribbean is pulling this off

Royal Caribbean Group's formula is a mix of cruise fares rising and people willing to pay them.

That pricing power is evident in onboard revenue and pre-cruise purchases, "Guest spending onboard and pre-cruise purchases continue to exceed prior years driven by greater participation at higher prices."

Strong close-in demand at higher prices is what they've reported in this quarter. Plus, continuous investment in adding new ships and private destinations generate higher interest among consumers.

There is quite a line-up of big projects coming soon:

• 7 new cruise ships by 2028
• Increasing from 2 to 7 exclusive destinations by 2027
• Celebrity Cruises River launching in 2027

Cost control and investment upgrades

Another factor helping the company this quarter is its strict adherence to cost controls.

"Our strong balance sheet allows us the flexibility to continue to expand capital return to shareholders, invest in growth and innovation, and maintain investment grade balance sheet metrics in a range of macroeconomic environments," said Naftali Holtz, CFO.

During the quarter, the company was upgraded to investment grade by S&P Global Ratings. Plus, they exercised significant debt reduction and share buybacks.

On top of that, they have a good amount of cash on hand, with $4.5 billion in cash and available credit.

"This quarter, we continued to opportunistically reduce debt, while lowering cost of capital and recapturing a portion of our Covid-era share dilution," Holtz added.

Hinting at a strong year to come

Royal Caribbean Group isn't making any bold predictions for the year, but they are seeing good signs to come.

The company increased its full year 2025 Adjusted EPS guidance from$14.55 to $15.55. The increase in earnings expectations is driven by the better than expected revenue performance in the first quarter and the benefit of currency exchange rates and lower fuel costs for the remainder of the year.

"With our industry-leading brands, state-of-the-art ships, exclusive destinations, and a fortified balance sheet, we will continue dreaming and innovating to win a greater share of the growing $2 trillion global vacation market," Liberty said.

While there are economic doubts for many companies, Royal Caribbean's results show cruising is one luxury people are willing to prioritize.

Royal Caribbean Group is on a roll with another great quarter, and even better outlook for the days to come.

The company shared its third quarter financial results, which were better than expected.

Net income for the third quarter was $1.1 billion, compared to Net Income of $1.0 billion for the same period in the prior year.  The company also reported total revenues of $4.9 billion.

The driving force behind its strong quarter was higher prices on last-minute cruises, continued high demand for cruise extras, and lower costs due to timing.

Another factor was balance sheet actions taken in the third quarter resulted in lower interest expense and the company's return to its pre-Covid unsecured balance sheet.

In a statement, Royal Caribbean Group President and CEO Jason Liberty celebrated the robust earnings, "Our exceptional third quarter results and increased full year expectations reflect the robust demand for our differentiated vacation experiences."

He's already looking ahead to 2025 as a year where Royal Caribbean will grow significantly more, "We see elevated demand patterns continuing as we build the business for 2025, and although the yield comparable will be a high bar, our proven formula of moderate capacity growth, moderate yield growth and strong cost discipline is expected to continue to deliver strong financial results."

Third quarter results

There were interesting statistics to come out of Royal Caribbean Group's strong quarter.

In the third quarter, across all of the company's brands, the occupancy rate was 111%. This means cruise ship cabins were not just sold out, but more cabins had more than two people in them. 

Royal Caribbean Group saw higher pricing overall, but European and Alaska cruises saw particularly higher prices. In addition, the company made more money through selling add-ons, such as drink packages, WiFi, shore excursions, and more.

Strong demand is a major factor, as Royal Caribbean Group is actually seeing the demand and pricing environment accelerated since last quarter, exceeding 2023 levels. 

"Consumer spending onboard, as well as pre-cruise purchases, continue to significantly exceed 2023 levels driven by greater participation at higher prices," the company said in a statement.

They believe their success is due to vacationers preferring their new cruise ships, existing ships, and private destinations.

"Support our growth ambitions"

Another important success for the company this quarter was the company's return to its pre-Covid unsecured balance sheet.

A balance sheet refers to a company's assets, liabilities, and owner's equity at a specific point in time.

Royal Caribbean Group has spent many months paying back loans, refinancing loans, and structuring its debt to not hinder the company's operations.

Like all cruise lines, Royal Caribbean Group took on a lot of debt during the 2020 cruise industry shutdown to stay in business through a variety of loans.

Royal Caribbean Group CFO announced, "This quarter, we achieved an important milestone of returning to a fully unsecured capital structure while also reducing cost of capital and recapturing a portion of our Covid-era share dilution."

He went on to say this change allows them to, "further support our growth ambitions and expand capital allocation." That's an important indication for cruise fans who are always eager to see their new plans.

Capital spending is the category of expenses the company refers to when it builds a new cruise ship or builds a new private island.

As an example, the next private beach experience was announced during the third quarter to build Perfect Day Mexico, which will open in 2027.

Demand for booking a cruise vacation is so red hot for Royal Caribbean right now that it's likely we'll continue to see an upward trend in cruise prices.

While there is variability in how cruises are priced, Royal Caribbean sees a willingness on behalf of the consumer to not only book more cruises, but pay more for it. The company had to adjust its earnings forecasts because they're getting more bookings than they expected at higher prices.

During Royal Caribbean Group's second quarter earnings call, Chief Financial Officer Naftali Holtz cited an example of bookings for Caribbean cruises for the coming few months.

Caribbean cruises in the third quarter will make up 42% of all Royal Caribbean Group sailings, and a lot of people are willing to pay more to go on them, "this product is booked ahead in both rate and volume and the strong yield growth is driven by new hardware and higher pricing on existing ships supported by our private destinations."

Translated from financial jargon, that means Caribbean cruises in the next 3 months have more cabins booked than normal, and the company is making more money already because people are willing to pay higher prices due to an investment in newer cruise ships and itineraries that visit Perfect Day at CocoCay.

Willingness to pay more

The top reason why you should expect Royal Caribbean cruise prices to continue to rise is because customers are demonstrating they will pay higher prices.

Looking ahead to the rest of 2024, Royal Caribbean Group CEO Jason Liberty spoke about this trend during the earnings call, "all the yield improvement that you're seeing in Q3 and Q4 is really being driven by price."

"I think it's a really strong indication that not only the willingness to pay more, but these prices continue to increase as we build and manage demand."

To put it in perspective, Mr. Liberty indicated Royal Caribbean Group's revenue for the second half of 2024 is 25% higher than it was in 2019, which was the previous high water mark for the cruise industry. 

If 2024 looks positive, 2025 looks even better for the company. They're taking more bookings for 2025 than for 2024, and that means the higher pricing trend will continue into 2025 and beyond.

"The strength in the commentary that we talk about on pricing and pricing increasing, it very much applies to 2025 and beyond," Mr. Liberty explained during the earnings call.

"So we feel very good. We're in a very strong book position for 2025, pricing is up and increasing are the trends that we continue to see."

"I think we feel really good about 2025. The pattern show pricing continues to accelerate."

When you combine sky-high onboard spending, prices, and demand, it's a formula for higher prices on average. That probably means less cheap cruise deals on the horizon.

If you're reading all of this and think surely consumers will buck against the higher prices, it's not something Royal Caribbean sees on the horizon.

One Wall Street analyst asked about "pricing sensitivity" from customers because of comments made by land-based hotel operators.  Royal Caribbean rebuffed that notion based on what they're seeing on their end.

Mr. Liberty explained, "the booking window continues to extend, so they're planning further out, their willingness to pay more for these incredible vacation experiences continues to increase."

Part of the reason why he believes cruise bookings are stronger than land vacations is because of the value gap between the two types of vacations, which Mr. Liberty estimates is around 20%.

For consumers, it's a sobering prediction for what the future holds in terms of prices, "the trends that we see is just continued acceleration on the pricing side."

Bargain hunters will need to be agile

While the trend is moving cruise prices higher on average, it's still possible to find an ultra-cheap cruise. 

Royal Caribbean prices its cruises largely based on supply and demand, and there are going to be deals out there, especially on sailings that have less demand.

First and foremost, Royal Caribbean will see the highest prices on its newer ships, such as Utopia of the Seas or Icon of the Seas. That's because new ships always command a higher price because they have the latest and greatest features on them.

Generally speaking, you'll find lower prices on older, smaller ships.  

As an example, try Adventure of the Seas out of Port Canaveral instead of Utopia of the Seas.  Or Freedom of the Seas out of Fort Lauderdale instead of Icon of the Seas.

Some of the best cruise deals are on longer sailings that take place while school is in session. Transatlantic crossings remain some of the best deals from a per-night cost basis.  

Transatlantic cruises take place in the spring and fall when cruise ships migrate from North America to Europe and then back again.

Read more: What it's really like to take a transatlantic cruise

The reason they're cheaper is they are longer, usually 10-14 nights, and a lot of families cannot go on vacation for that long a period.  Plus, families can't book them because their kids are in school.

The other strategy for a good cruise deal is a bit of luck.  Sometimes there's a last-minute cruise deal that pops up, and other times there are specific sailings in the coming months or years that are priced lower.  

Spotting these cruise deals can be just plain luck, or you could also rely on a good travel agent that monitors prices during the course of their daily work and can alert you when they spot something good.

Read more: 10 Secrets Royal Caribbean travel agents wish you knew

While I would not expect cruise prices to drop across the board, savvy consumers should be able to find some deals.  

But for the newest ships, don't expect a lot of wiggle room.  It's why booking early is still the best strategy to get the best price possible on these vessels.

Royal Caribbean Group continued its trend of reporting strong quarterly earnings with its second quarter performance.

Thanks to strong demand and favorable timing of expenses, the company "above expectations" results for the second quarter.

Demand for cruises remains a constant for the company, which cited stronger pricing on close-in demand and continued strength in onboard revenue, as well as favorable timing of expenses, as reasons why results exceeded its expectations.

In a statement to the media, Royal Caribbean Group President and CEO Jason Liberty celebrated his company's strong performance, "Our momentum continues! We met our financial targets 18 months earlier than expected, have our balance sheet in a strong position, reinstated our dividend, and ... we are just getting started."

"Exceptional demand for our vacation experiences has accelerated our performance by generating significant yield growth over the past several years," added Liberty. 

"As we look forward, we remain intensely focused on driving strong shareholder returns by delivering a lifetime of vacations and taking a greater share of the rapidly growing $1.9 trillion global vacation market. This is underpinned by our formula for future success – disciplined growth and moderate yield growth while controlling our costs."  

Inside the second quarter

Total revenues for the second quarter were $4.1 billion, with a Net Income of $854 million, and Operating cash flow was $1.6 billion.

The average cruise ship sailed in the second quarter at 108% capacity. Occupancy rates over 100% are a good measure because it means there were more than two people in a lot of cabins.

Royal Caribbean is seeing high demand for its products along with high prices remaining in place since the last quarter. 

In fact, booking volumes were higher than the second quarter in 2023 and at record pricing levels. 

The company continues to be in a record booked position for 2024 sailings. Consumer spending onboard, as well as pre-cruise purchases, continue to significantly exceed 2023 levels driven by greater participation at higher prices.

"We have seen strength for all key products and are already taking more bookings for 2025 sailings than 2024," Mr. Liberty commented.

The company was particularly proud of the fact it achieved all three of its financial goals. For the 12 months ending June 30, 2024, the company achieved all three of its Trifecta goals: triple digit Adjusted EBITDA per APCD, ROIC in the teens, and double digit Adjusted EPS.

Loan update

Royal Caribbean Group took out many loans during 2020 and 2021 in order to stay in business, and some of the critical ones are now paid off.

"During the quarter, the company repaid the remaining balance of its ship related debt amortization deferral obtained on its export credit facilities during 2020 and 2021, which removed the remaining restrictions on capital return."

 "Our strong balance sheet allows us to expand capital allocation and reinstate a quarterly dividend, further supporting our goal of creating long-term shareholder value," said Royal Caribbean Group Chief Financial Officer Naftali Holtz.

Royal Caribbean Group's business is so hot right now that the cruise line wants to hire as many as 10,000 new crew members to work on its cruise ships and private destinations.

Booming demand for cruises in 2024 has broken the company's sales records and there are no signs of it slowing down anytime soon.

That surging demand means more people are needed, and a hiring blitz is about to take place.

According to a report by Reuters, Royal Caribbean Group will hire 10,000 workers this year.

Royal Caribbean Group owns Royal Caribbean, the largest cruise line in the world, along with Celebrity Cruises and Silversea Cruises. They also partly own two German cruise lines, TUI Cruises and Hapag-Lloyd Cruises.

In the report, a spokesperson for Royal Caribbean confirmed plans to hire more than 10,000 workers to help staff the three new cruise ships joining their fleet.  This includes Utopia of the Seas, Star of the Seas, and Celebrity Xcel.

That's in addition to the addition of Icon of the Seas, which started sailing in January 2024.

"The recruiting strategy follows the business strategy of moderate capacity growth," an unnamed spokesperson said.

At the end of 2023, Royal Caribbean had around 88,700 people working on their ships, which is 6% fewer than the year before. They also had about 9,500 full-time employees working on land and at their private destinations, which is 17% more than the previous year.

Where will they hire from?

While Royal Caribbean Group did not share where they will hire the new workers from, it appears Caribbean countries will help supply many of the new hires.

In the report, recruiters from a variety of countries said Royal Caribbean has approached them about hiring needs.

The Caribbean Maritime University in Jamaica, the British Virgin Islands, and the Gambia Tourism Board all reported being contacted about hiring new workers.

More crew to meet higher demand

2024 is off to a fantastic start for the company, with total revenue for the first quarter of $3.7 billion thanks to strong demand for bookings that actually put them ahead of their own financial projections.

In the first quarter, over 2 million people took cruises on a Royal Caribbean Group brand ship.

As a result, Royal Caribbean Group raised its earnings forecast by 50% compared to what it forecast in February.

"The first quarter was tremendous, sending us well on our path to a year that is significantly better than we expected just a few months back," Royal Caribbean Group President and CEO Jason Liberty said at the company's call with investors.

"What transpired over the past three months was even better than our already elevated expectations."

88% of cabins for all of 2024 are booked up, according to Mr. Liberty.

New ships coming soon

Not only is business good, but more ships are being built and that means new opportunities for growth.

Royal Caribbean Group has reiterated its mantra of moderate capacity growth for a while, with new ships coming online periodically, rather than a building spree.

"We remain focused on executing our proven targets formula for success, moderate capacity growth, moderate yield growth, and strong cost controls that lead to enhanced margins, profitability, and superior financial performance," Mr. Liberty told investors.

Icon of the Seas started sailing in January and Utopia of the Seas will start cruising in July.  Two new ships in one year is a rarity for Royal Caribbean, and that's a lot of crew members needed to make them function.

Typically, a new cruise ship sources its crew members from elsewhere in the fleet.  Preparing a new ship to enter service requires a great deal of expertise, as there are unique challenges for crew to get a new ship running smoothly. As a result, the norm is to cherry pick the best crew members from around the fleet to staff up the new ship, with new hires replacing them.

Icon of the Seas has a crew member total of 2,350, while Utopia of the Seas carries 2,290 crew members.

Two more cruise ships enter service in 2025, with Star of the Seas in August 2025 and Celebrity Xcel in November 2025.

That's on top of a new beach club that will open in 2025 in The Bahamas.

Royal Beach Club Nassau is a new concept to offer a paid option exclusively to Royal Caribbean guests to enjoy a private beach enclave in the heart of Nassau, Bahamas.

The 13 acre site will feature swim-up bars, live music, two beaches, four restaurants serving local food.

Read more: Royal Caribbean has a plan to dominate short cruises

The beach club will add hundreds of new jobs, both during the construction and operation of the new club.

On top of all of this, you have the regular turnover of employees.

Royal Caribbean Group's earnings call on Thursday was filled with insights into what the company is thinking on a variety of subjects.

While the hour-long call with Wall Street analysts is meant to provide clarity for investment purposes, it also doubles as a way to share guidance on the direction of the cruise industry.

For consumers, there's candid discussion of topics that will have an impact on what it's like to go on a cruise.

Here's an overview of the topics discussed that cruisers will want to know about.

Better demand than ever expected

Without a shadow of a doubt, business is really good across the Royal Caribbean Group brands.

"The first quarter was tremendous, sending us well on our path to a year that is significantly better than we expected just a few months back," is what Royal Caribbean Group President and CEO Jason Liberty said at the onset of the call.

"What transpired over the past three months was even better than our already elevated expectations. Our brands are stronger than ever and demand for our vacation experiences continues to accelerate."

In the first quarter, over 2 million people took cruises on a Royal Caribbean Group brand ship, and that lead to a lot of people paying for cruises, along with add-ons extras.

Demand is so strong that the company is raising its earnings forecast by fifty percent compared to what it forecast in February.

At one point in the call, Mr. Liberty pointed out that April was double the usual business. He sees this as a sign demand for cruises is accelerating. They thought things were getting better in February, but it went much better in the months since.

Royal Caribbean Group Chief Financial Officer Naftali Holtz explained later in the call that having two million passengers was great, but higher cruise costs was a difference maker, "While a load factor recovery was a contributor, most of our yield growth was driven by rates that were up by 14% versus 2023."

Cruises in the Caribbean stood out given that 55% of their fleet was in this market, and the combination of new cruise ships and "much higher pricing on existing ships" drove up revenue.

80% of customers are from North America

The vast majority of people going on a Royal Caribbean cruise are from North America.

"North America continues to be extremely robust, where approximately 80% of this year's guests are sourced," is a key stat that Mr. Liberty mentioned in his opening remarks.

While next year may see a slight shift in that number with China cruises restarting, Mr. Liberty doesn't see a lot of change in that, "we're going to follow the demand patterns and that is how we have we've done it for a very, very long period of time."

New cruiser numbers are up

A fascinating stat shared during the call is how many new cruisers are coming to Royal Caribbean.

People that have never taken a cruise ever are up more than 16% year-over-year, while almost one in two guests are millennials or younger.

"Millennials and younger generations have gained 11 percentage points share compared to 2019," Mr. Liberty explained.

Sourcing new customers is always important, not just for a new booking, but for the repeat business.  He said new cruisers that try a Royal Caribbean Group cruise are seeing return rates over 30% higher compared to 2019.

New Bahamas beach club will be the envy of other cruise lines

Royal Caribbean has said it targets the new to cruise market over other cruise lines customers, but that doesn't mean there isn't a game of one-upmanship to be played.

Royal Caribbean broke ground on its new private beach club that will be exclusively for the use of Royal Caribbean customers, and it's located on the front door step of every major cruise line.

Royal Caribbean International President and CEO Michael Bayley pointed out, "The beautiful thing is the Royal Beach Club in Paradise Island is positioned pretty much at the entrance to Nassau."

"On a given day, there's 25 to 30,000 cruise guests coming in on multiple different cruise brands. And of course, when they sail into Nassau, the only thing they're going to see is the Royal Caribbean Royal Beach Club, which is going to be absolutely stunning. And they will be unbelievably jealous knowing that they can't go there."

Royal Beach Club, Paradise Island is a new land-based offering for the cruise line, and it will have an admission fee with a limited capacity.

Mr. Liberty confirmed that other Royal Caribbean Group brands will be able to go to the beach club too, but no other cruise line customers.

Almost everyone is using the mobile app

Interestingly enough, almost every passenger is using the cruise app now.

About 94% of cruise ship passengers are using the app onboard, and that's important because it makes for an easier cruise experience for the guest, while making it easier to spend more money at the same time.

"We are removing friction and unlocking travel planning by investing in a modern digital travel platform, making it easier than ever for guests to book their dream vacations while allowing us to expand wallet, share our digital experiences, delight guests," Mr. Liberty said.

He touted a number of new features added to the app in the app, such being able to book flights, better cruise booking choices, tracking loyalty benefits, and more.

Read more: 14 improvements Royal Caribbean developed just for Icon of the Seas

Middle East issues not affecting European cruise demand

While the geopolitical problems in the Middle East are troubling, it's not stopping people from taking a European cruise.

Europe accounts for around 15% of capacity for the full year, and close to 25% during the summer.

"Despite the fact that we had to modify some of our eastern Mediterranean sailings that were previously expected to call in Israel or sail through the Red sea, our European itineraries have been performing very well and we are currently booked nicely ahead of last year in both rate and volume," Mr. Holtz said during the earnings call.

As for the issues affecting ships traversing the Red Sea, the company has already re-routed a number of ships and has, "contingency plans for a few other sailings that may be impacted in the fall."

Ordering more ships?

One analyst asked Royal Caribbean Group about the prospect of ordering more cruise ships given that Carnival and Norwegian both placed big orders recently.

Mr. Liberty was quick to point out that new orders don't take into account options and slot reservations.  

Options are opt-in ship orders a cruise line can elect to take that is built into the original ship order contract. Think of it like a sports contract where the player signs for a few years, but has the choice to stay with the team instead of returning to free-agency.

Slot reservations are a way cruise lines pay to reserve space at a shipyard in the future. There's no order placed, but just in case they do place an order, there's capacity to build.

"I think we feel very good, not only about our current order book and about the potential of that order book to grow moderately, but also our access to build those ships over an extended period of time," Mr. Liberty said.

The year 2024 is off to a great start for Royal Caribbean Group's bottom line.

Royal Caribbean Group posted its first quarter financial results, which saw Net Income of $360 million, with total revenues of $3.7 billion.

"Wow, what a great start to the year!" is how Royal Caribbean Group President and CEO Jason Liberty started his statement off in the press release for the earnings report.

"Demand for our leading brands and the incredible experiences they deliver continues to be very robust, resulting in outperformance in the first quarter, a further increase of full year earnings guidance, and 60% expected earnings growth year over year."

That demand he talks about is what drove the company's financials into a better financial position than the company had originally anticipated.

Strong demand and strength in onboard spend pushed first quarter earnings ahead.  In fact, there was better demand anticipated during the lucrative WAVE season. This is an industry term for the beginning of the year when the general public books the most cruises of the year.

Read more: Royal Caribbean is making more money than it expected. The good and the bad news for cruisers

High demand persisted across all of the top cruise markets, and on top of that, customers were spending more on cruise extras.  That combination lead to higher revenue, as well as Royal Caribbean Group updating its guidance for the rest of the year.

First quarter by the numbers

Here are the key stats from the Royal Caribbean Group's first quarter.

Cruise ships sailed at an average of 107% full during the quarter. That's up 5 percentage points compared to the first quarter of 2023. 

Occupancy rates over 100% are a good stat, and it means there were more than two people in a lot of cabins.

Total revenues were $3.7 billion, Net Income was $360 million or $1.35 per share, Adjusted Net Income was $478 million or $1.77 per share, Adjusted EBITDA was $1.2 billion, and operating cash flow was $1.3 billion.

About half of the first quarter yield growth was driven by higher ticket pricing on the fleet of ships, with the remainder driven by a combination of guest spending on extras, ships sailing with more passengers onboard, and new cruise ship demand. 

As of March 31, 2024, the Group's customer deposit balance was at $6.0 billion. 

Record booked position

Once again, 2024 is another year seeing more people book cruises than ever before.

Royal Caribbean Group is seeing "very strong" demand and prices. Overall, this has been the strongest WAVE season in the company's history from both a demand and pricing standpoint. 

Prices for a cruise in 2024 are higher than they were at the beginning of the year in 2023.

Plus, passengers are spending more on add-ons and making purchases before the cruise at a rate higher than prior years.  The company said this is due to, "greater participation at higher prices." That essentially means more people are buying add-ons and they cost more than the used to.

Mr. Liberty called out the new Icon of the Seas as being a difference maker, "Our existing fleet along with our new ships continue to perform exceptionally well, highlighted by the market response to the launch of Icon of the Seas, which has exceeded all expectations."

"The momentum continues with Utopia of the Seas and Silver Ray, set to launch this summer. And, just this quarter alone, we announced an order for a seventh Oasis Class ship and the expansion of our Royal Beach Club portfolio in Cozumel; and we officially broke ground on Royal Beach Club Paradise Island.  These strategies will further propel our leadership in the cruise industry and push us to new heights in the vacation industry."

Despite all the challenges of the last few years, the cruise industry is red hot right now. So much so, it is advising its investors to expect a banner year.

Royal Caribbean Group expected 2024 to be a very good year, but it had to revise expectations because business is doing better than it predicted.

In just the few weeks since Royal Caribbean Group reported its 2024 earnings outlook, the company issued an update because of "robust demand."

This is more than good news if you own stock. It points to many trends cruise fans should expect in the coming year and beyond.

The best wave season ever

Royal Caribbean isn't just seeing high demand, it's experiencing the hottest start to the year in its history.

Wave season is the industry term for the time of year between January and March where cruise bookings are usually the highest of the year. The name refers to the fact it acts as a wave to carry business through the rest of the year, similar to how an ocean wave carries water far out to shore.

In a filing on Friday, the company said the first 5 weeks of the year have had the best wave booking weeks in the company's history.

In short, new reservations for the third and fourth quarters are better than the first two quarters by half.  More bookings in 2024 have been made for the year in quantity and pace. On top of that, more passengers are buying extras for their cruise at higher prices.

Royal Caribbean Group CEO Jason Liberty explained, "Since our last earnings call, robust demand for our vacation experiences has significantly exceeded our initial expectations."

When a company files anything with Wall Street, it's important.  For them to adjust forecasts of how much money they expect to make, it shows a significant rise in their business, especially just a few weeks since the forecasts were given.

Don't expect cruise fare cuts

Royal Caribbean Group telling investors it will make even more money than it first advised should be a sign to anyone that going to book a cruise this year there's plenty of other people competing for those cabins.

If you found cruise prices high in 2023 and were hoping for a reversal in price trends, it seems more unlikely now.

Mr. Liberty told investors on February 1st, there are half as many staterooms left in the first quarter of 2024 compared to the same time period in 2023.

When you combine sky-rocketing demand at higher prices, there's little impetus to drop cruise fares much.

Cruise fare pricing depends on many factors, not just booking trends. However, it's likely those tailwinds wont compel price cuts like the industry saw in 2020.

Updates and new ships are back

It's not all bad news for consumers, because Royal Caribbean doing better financially has an ancillary benefit.

With Royal Caribbean Group expecting more cash, it means they have more financial flexibility. More cash means money to pay off the massive debt all cruise line accrued during the shutdown of 2020. But it also means they can afford to do more too.

One of the first things Royal Caribbean Group did when things went bad in 2020 was to cut capital spending, which is what the company calls big projects. This includes new cruise ships, refurbishments, and private island development.

As Royal Caribbean Group's financials improved over the last two years, it has started to spend more.  It re-committed to a beach club in Nassau, and built and opened an adults-only expansion at CocoCay.

The best sign that Royal Caribbean Group is ready to spend big again is the fact it placed an order for a new Oasis Class cruise ship. Considering cruise ships cost easily a billion dollars, it's unlikely they would voluntarily take on new debt if they didn't think they could pay it all off.

Moreover, executives let slip they would amplify Allure of the Seas in 2025. Allure had upgrades planned for 2020, but it was cancelled (along with Explorer of the Seas, Liberty of the Seas, and Adventure of the Seas). 

These are all signs that Royal Caribbean Group seems poised to start spending on the things that cruise ship passengers love: new fun and fancy things to do. While nothing is certain, the fact they've started spending on big ticket items that were fiscally impossible just a couple years ago, says a lot.

Book now before prices go higher

If your goal is to go on a cruise this year or in 2025 or 2026, you'll want to act quickly.

Given the trend of prices going up, booking a cruise early remains your best strategy, as opposed to waiting for last-minute deals.

Traditionally, sales on a last-minute cruise were a strategy cruise lines used to fill up ships to avoid having unsold cabins. 

Read more: I paid $99 per person for a Royal Caribbean cruise. Here's what this cruise is like

Just like the reality of price drops being less likely, I think last-minute sales are equally improbable.

Booking a cruise more than a year in advance has always been a tried-and-true booking strategy, especially for new ships when they first become available to book.

As it gets closer to the sail date, more people book cruises and that means less cabins left to book and that tends to drive up prices.

While a last-minute deal isn't impossible, given the current booking environment, I recommend booking a cruise early rather than betting on a good price in the final weeks before the cruise begins.

Having trouble finding your desired cabin on a Royal Caribbean cruise ship? You are not alone. The demand for cruises is stronger than ever, which means that cabins are filling up in advance. 

The five highest booking weeks in the company's history were in between the third quarter earnings call and the fourth quarter call in February 2024. 

"As a result, while our capacity is up 8.5% year over year, we have less inventory available to book in 2024 than we did a year ago for 2023 and half as many staterooms left in [the first quarter]," said Jason Liberty, President and CEO of Royal Caribbean Group during an earnings call on February 1.

Royal Caribbean Group is the parent company of Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. Between the two, four new ships will have launched by the time August rolls around, including Celebrity Ascent which set sail in late 2023. 

Celebrity Ascent, Icon of the Seas, Utopia of the Seas, and Silver Ray will be able to accommodate over 18,000 passengers with every berth filled. 

"Bookings have consistently outpaced last year across all key products at much higher rates," said Liberty.  

Read more: Royal Caribbean talks record demand, Red Sea attacks, competing with land vacations, & more

Record-breaking wave season

Within the cruise industry, "wave season," which is often January through March, is when cruise lines tend to run their biggest sales and promotions of the year. 

According to Liberty, Royal Caribbean Group has had a record-breaking wave season, meaning that both rates and volume are booking significantly ahead of time compared to 2023.

Caribbean sailings, in particular, are booked further in advance. "The Caribbean represents just over 55% of our deployment this year, following a 13% increase in capacity year over year," said Naftali Holtz, Chief Financial Officer at Royal Caribbean Group. 

The growth is a result of Icon and Utopia of the Seas, Celebrity Cruises' increased summer deployment to the Caribbean, and the expansion of Perfect Day at CocoCay. 

The increase in demand is being seen throughout the cruise industry

Similar comments were made by John Weinstein, Carnival Corporation's President and CEO in September 2023 during a conference call. 

He claimed that Carnival Corporation was ahead by about ten percentage points compared to 2019 and that they, too, had less cabin inventory despite a 5% increase in capacity due to new ships entering service. 

Moreover, Holland America Line, a brand under Carnival Corporation, recently reported that their one-day booking record was broken on January 16. In a single 24-hour period, they received more new bookings than any day in the past 150 years of operation. 

Read more: 7 things I liked better about Royal Caribbean cruises than Carnival

Royal Caribbean has opened bookings for Caribbean sailings through April 2026

It's not uncommon for cruise lines to release new itineraries years in advance. 

However, with the recent price inflations seen on new ships like Icon and Utopia, the opening of these cruises gives more choice and flexibility, especially when it comes to the cost. 

A cruise onboard Icon of the Seas in April 2026 starts at $1,823 per person, whereas a sailing in April 2024 begins at $3,089 per person. 

Even with the high prices during Icon's inaugural season, cabins are still selling out months in advance. According to Royal's website, interior cabins on the April 13th sailing are already sold out. Similarly, there are only balconies and cabins within the Royal Suite Class available on the April 20th cruise out of Miami. 

Earlier this year, we asked our readers how far in advance they book their cruises. At the time, the majority said somewhere between 6-12 months in advance. 

Looking into the future, it would not be surprising to see a shift in answers, especially if cruisers have a specific cabin category in mind and/or want to secure a lower price. 

Renewed importance of booking early

Today’s news reinforces the importance of booking a cruise early, rather than waiting. With the record demand Royal Caribbean Group is seeing, inventory will be lower than usual and that means fewer cabin choices, higher prices, and less last-minute deals. 

As an example, my fiancée and I recently booked a cruise onboard Icon for June 2025. At the time of booking, which was in mid-January, we were able to secure an interior cabin for $5,125.60, including gratuities. 

Now, Royal Caribbean's website is advertising the sailing starting at $5,821.72 before tips! Within just a few weeks, the price of a sailing over one year away increased by close to $1,000. 

Another benefit to booking early is that you can reprice your cruise up to final payment. 

Let's say that I notice that the cost of my Icon cruise decreases. Right now, I feel as though I booked at the perfect time, as the price increased significantly. If it happens to decrease I'll still feel like I booked at the right time because I can take advantage of the lower price!

While Icon of the Seas was built with families in mind and features more rooms for larger groups, older ships weren't built with the same mindset. Whether you're seeking a cabin for five or two adjoining rooms, you'll have to book early to guarantee that you get your desired selections. 

Booking early also helps ensure that you get your preferred dining time. On Royal Caribbean and Celebrity ships, you can either select a flexible or set time, with the latter having early and late options. 

Families with younger children may prefer to eat earlier, whereas groups of friends might want a little more flexibility around their shore excursions and evening activities. As any given sailing fills up, so do dining preferences. 

On a more practical note, booking a cruise early gives you more time to save up, as you'll only have to place a deposit. Whether you want to splurge on a more expensive cabin or have to account for airfare, by thinking into the future, you won't have to worry about financing your trip at the last minute. 

Last-minute cruises are often accompanied by higher flight prices, which usually negate any savings received by waiting to book. 

If you are on the hunt for the best cabin availability and lowest prices, you will want to book your cruise as far in advance as possible. 

While not impossible, the likelihood of you scoring a fantastic last-minute cruise isn't as strong as it was a few years ago. By waiting until the last minute, you aren't guaranteed anything, especially a spot onboard! 

Read more: Pros and Cons of booking a cruise early vs last-minute