Royal Caribbean Cruises (RCL) 7 Nov 172017 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Royal Caribbean Cruise Line's Third Quarter 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the conference over to Mr. Officer. Financial Chief Liberty, Jason Please go sir. ahead,

Thank us today operator. Good earnings morning joining for you thank for and call. you, our quarter third

Chairman International; Operating Relations. Officer; in Richard Bayley, of President Adam Joining Investor York of Michael Mengolini, our and Royal our CEO our President Caribbean Goldstein, Chief here Officer; Carola Chief and me President and Executive and New Fain, are Vice

to www.rclinvestor.com. a on During few which be this call, posted website, we have our referring investor will been slides,

Before I forward-looking you which slide. started, we our is to first refer get to like would our notice statements, about on

website. for to defined non-GAAP During XXXX. of filings will will be recap will do booking guarantee we this an a can will future and certain overview be providing guidance of will note begin our business. basis. our are our Unless constant-currency update other comments described a information on and found and then third making Also, provide metrics update by quarter close results, not state in do current forward-looking. circumstances and otherwise, are which that Richard a and the of strategic I follow discussing risks thoughts as disclosures. on all and involve environment a year early quarter provide Please we XXXX. reconciliation with fourth then items as on are the for I full not all historical call, are with the adjusted we the performance uncertainties. our do SEC change. filings These that adjusted our we statements metrics, Examples non-GAAP be financial undertake of in

open your call the questions. We Richard? for then will up

to on always, been am commenting Jason, an I you, I'll to eventful unusual other moved things, as we of and know to impactful an certainly that quarter set everyone. eventful such it. this start hurricanes an unusual pleased on the give year by an but that and such need I the country was comment most commentary. of It's storms and some summer. I morning, Thank this on has experienced of set good

would I unusual hit unusual well. major with storms circumstances, row were was. under Each be of as just storms hurricanes like path exactly that how our Firstly, to but routes. highly these unique to these in series reason major five It's for this a emphasize trade of followed a any matched another storms

to when destruction to exactly devastation seemed storms the was The these exactly most heartrending. misery. and the and most know where Somehow to cause hit

damage bear You at pain can't the experiencing look all our friends without every still are day. to feeling the and had

in estimated the million. have $XX the they XX-year season we storms the That direct and in most excess our far expensive we that us, hurricane makes but was history, of resilient. are cost by it For of

communities You to Caribbean been but largely in the to in Texas and and devastated. problem mainly homes Florida are can to the have without the a rural restored. tirelessly see worked is rebuild is so return We electricity hard the our residential the how has the now water areas. and Caribbeans trial, now a to can They and have every friends greatly better normalcy. that in in Communications worked were improved and is and getting attest day situation living the

I some partnership the areas a progress can and making. with almost the tourism Friday, of so from I economic back bringing tourism chance the be we positive cruises our highly local so hit St. the had that resumed the that important here. to and to pushed Magens get how frankly month. economic the has force agent is their the will Overall, us where visit to go, are rapidly call to critical hardest dramatic Bay They iconic been am produced cruise to to a back government a where original as just driver St. to impressed on areas, results. of happy community largely later returned the few appreciate to tourist seems in restore to people effort. out San focused rebuilding the going infrastructure continues returned has just been has and and The and again already possible. impressed recovery forward. This The recovery calls we ago the We to tourism effort and also are very very destination state. than especially done they snuff. return They know there I've have and anyone very travel as enhance Maarten they Juan month else speed and that our Thomas, am up a are have this and weeks. the our word operating to yet tourism they will a as will report we port everyone guests that Fortunately, be reinstate in better quickly this

While be impact exposures this their that the so this hard were industry's dealing employees, challenging The are so it's we able logistical to repair, limited, give to humanitarian so damaged to for suffered tourist of our worked our in home. proud like good region been thank residential period, been damage long. assistance so a the many needs in daunting. having is issues areas that partner I'd own at during while visit who also back with that to up. our but to area. areas to less that am response cases, many necessarily has mostly Their do were little our are under I cleaned and great still have providing

month and so normally special thousands normal communicate had we do we of arrangements provisioning example, to working of in period. the to nervous (XX:XX) any September For had to ships, than reroute make with just new would We make expect in more three-year arrangements travelers.

Hats efficiency. them. all Our smoothly did team it off to and

looking was down the interfered like destroyed, storms than the to force stronger be spent to normal process. having with area. in to but constructive at rebuild situation better one the there of to slog and resurgence fix am of they Cruise time bookings drivers impact hit turn our we, not determination, a the intend ever. countries were than of but Caribbean, aside, will get that a at hurricanes only before that road going the convinced a bookings. Obviously, on the Caribbean I now be clearly get the in I'd what will. to they in undoubtedly our the be the will storms. that tough to the There an Royal Caribbean, It's tourism that were is As there, emerge

The Caribbean the region recovered. surprising precipitously, quickly very both bookings bookings the pre-storm and hurricane rapid, back remain in what levels. is During bookings period the There our of are several storms, but all rapid. to these for period for the bookings but beyond. also in in exceptions, recovery drop-off was None of how the was period surprising, virtually are but our Today, weeks is outliers. dropped the that the is

skin fast would rapid these recovery in whether storms. was. to view, such down They're important with seem We've recovery an lasting bookings living take else. Now, long call something forever. events, curl recovery just they about continue geopolitical less noticed Whenever would a and something has time, are seem a incident quicker. Even unusually event in discouraging extended could of now and believe common events. that beyond period. but It significant so in concerned say their lives recently, event lingering weather, more process of society well they way this They appears those would distressing it acts would More much have seen a incidents Years events that cultural happened, the an that People move aren't We this the would of seems Instead have today one-off respond obsess incident a public or more seems effect, little interested move on implications much a a become stay change. I change. on seem are reflection change our still may in issue a people strong broader bookings In for pattern to the actually audience. to a after people be formed reached we would to the impact. ball unusual we've bad normal, are the such and to towards bookings The that impact point it, general recover, ago, It's did and as the and societal front impact. fall for point. to to inured less have long they whatever on. and From it's to but events as with Eventually, them. seem but really seemed to have a up the ordinary a people see sanguine for seen to time. page, apt relevant left it. events that a response. focusing to such be in persist the a the People that thicker still about to of

much able couple forecast the this thought a reasonably cultural we we year midpoint that the commercial raising allowed our On is and that view, certainly with $X.XX aggressive a at the we The soon. performance guidance to much us profitability for for we also better existence. negative would doesn't to still the with be to we anytime very so such of hand, reach pleased background, milestone. fact surprised market share. and is little society storms it's that $X.XX, has shift withstand and guidance it that willing from when reflects more of within our It's strongly performing a such been of incidence stay a level to our interfere are ago, the helpful. how to interesting of as range this day-to-day Against expect probably to we that if we fleeting other normal more didn't things $X.XX in the achieve upped purely events, us months an impact a were Indeed, a the this able of $X.XX the we a It's to our still extremely being to actual if past. have hit nice this than EPS frankly are is of response allow constructive this From point year.

forward and [Technical produce Our exciting ended we've Double-Double program already Double-Double the momentum press release continues for. that achieved Indeed, for it hoping XX. as we the September is gratifying note, (XX:XX) to were to XX months Difficulty]

last all this XX%, our twice ahead been earnings the months, schedule. for have our XXXX exceeded three XX more ROIC and than Specifically, months our EPS of

pull all I to initiatives of As you purpose grateful program make to how teams by to our for galvanize the their overwhelmed our employees the well Double-Double the efforts same responded so extremely was successful. in direction. know, the and I'm program XX,XXX the to and am

until victory Double-Double declare see this that to a won't program while for of energy we XXXX is that the us. to we is a Double-Double, goals. program leveraged Since home that the continue the over, the of want discipline culture Now, year and a has been energy, also that including by passion, wanted very set but the by indefinitely. program broader We the run created strong final develop instilled

improving improving program suggested calls drivers in the this per Vision for scores return with earnings by on as for goals success XXXX our the double-digit double-digit the it XXXX invested our us We calls made new XXXX, employee share brands' World more journey help should for over and Fund. than These these for of guiding the are years. engagement ratings, only see focus The calling outcomes. achieve on the sustainability Vision. further We're achieving raising further focused already-excellent commitments XXXX guest calls Vision As calls, the our coming our earlier organization while capital. drivers Wildlife

strong strong appears be economy and consumer of shifting the that due having back to to high to partially year comment important is, prevalent The trend. environment Now, among and another very of confidence to to current booking level like the the course, we're consumer on consumers. a environment, I'd

which the shift past, However, On the shift for has reflects a calls long a we've cruises trend for industry. curves time. way cruise very Implicitly, equation in discussion the in towards the Usually, focus of of side. demand also building a these as that been has been are supply/demand used the the most the almost weighted supply viewed given. a much significant the of side by the public, discussed was the

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to to be impacting a point I make to seems first consumers want phenomenon The relates that generally.

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that to accommodate. have we factor societal have Another norms changed is also while changed,

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a the specifically for of For designed to that dramatic Instead designed ships and in and built. ships designed as transportation, being form of XXXXs, example, shifted cruising. way there we in XXXXs were were the ships was shift a

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stripe We of have nightlife. every

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through misconceptions geared of often For such influenced about pervaded lens inaccuracy of stereotypes. common won thing many has the of But misconceptions the the effect, and strange We, changing being of waned. years, in Many a of marketing then, complained we converged. understood not sense have profoundly perceptions war. thought of happened. This correct and the to cruising product properly our old population. outdated our about evolution our perception industry erroneous communications. in all these consumers' of of was and the image. old consumers the industry, In were prevalence our The cruising and outdated tastes changing The

at the crossed are while are remains numbers people from every a have still now issue tipping consumers these as point for especially generally. beyond firmly itself suffer an before. there their margin, there as issue desirable moving embraced who many cruising the as has the but who are option day. and Yes, out misperceptions, never at This We we have younger cruising true established Today, this generation, it. look a and we is old relevant dwindling vacation

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will somewhat equation Looking online. high demand. confidence increased period with strong forward, we an coming this consumer a a XXXX we play the important with demand driving good has a as supply/demand enter part good supply economy, believe higher particularly year of been

year Our of growth. continuation a yield for would forward next bookings indicate

However, to strong naïve continue of would continue it the us XXXX unusually to be assume indefinitely. would that

Seas. some happening new Now, our Ultra for before changes past of to ship the comment on market. the of Chinese Spectrum the other will of steel and Seas, our and market, destined where we I'd make Quantum turn the in August, for the Like Jason, the I XXth sister name, business. XXXX. Seas This the cut China Quantum we of she call to its This her back debut in Class ships, ship's our like confirmed year the is she Ovation is in

investments significant it this While in strategic that world the in put road, made, pay the believe We position. experienced we dividends. recently market the have of developed leadership committed and part team management we remain the and will we assets good to the strong believe us has we we have deployed that this bumps a have continue to

off fall is in debuts XXXX. Edge, the next the and which also of of year, Seas, arrivals arriving which I spring of Now, show wait in XXXX, new can't our to Symphony Celebrity

and We which capacity also that upgrades increases capabilities. Azamara Azamara Club our will recently there announced our Cruises join Pursuit our brand,

We fleet innovation. we future. renovation these brands, solidify programs in on, in and Royal and and major position upgrading see Celebrity will you the much introducing Celebrity about going are believe as also major Amplified our so why efforts hardware help two Revolution. further can excited With that are leader our for We Royal

of again the Jason, turn at who so admiration express vacations my appreciation so worked to back delivering skill hard such employees I I all our want to microphone and with my and to fantastic Before to many.

is the Jason? With their future indeed support, bright.

you, Richard. Thank

Before of key getting the on results, into I our impact the hurricanes to want statistics. unprecedented discuss the

related year. quarter morning, are the fourth in million share the impact The $X.XX per share to for the a full impacted total the storms, especially statistics. by key our hurricane third stated for we the the from lost of $X.XX APCDs, causing quarter and As in approximately noise this release for some our per $XX

expected the revenue and strong in onboard these aberrations demand. quarter virtually I results to strong products, guidance, the North address trends, the aggressive, wanted and guidance Overall, Europe, underlying is strength business. previous China happening impact by we hurricanes. talk demand last-minute additional for from I'll While had We the and when viewed recap combined the to offset third America fourth-quarter with our pleasantly were all are full-year I but as our reasonably what surprised and about

at where the we to roughly are the humanitarian expenses, storms, related Looking our had for we expected efforts. year except ending previously including costs

reasons. However, may for different look the two metrics

the Firstly, and which the from quarter the I timing the you but absolute through remained storms fewer APCD now cancellations, quarter. caused addition, as of in per our the caused The cruise expected, the went results some us to of walk resulted fourth up. shift storms for APCDs. will the amount in expenses to third third costs cost

results quarter summarized have X. slide our third We on

offset For the close-in per quarter, $X.XX $X.XX which hurricanes. income more guidance. hurricanes. $X.XX the results related products, previous demand core generated adjusted the better of the combined to These than timing we of from was impact from impact a include costs, Better-than-expected the negative our with than share, net

for Our higher quarter, close-in mainly guidance. net for demand of products the point packaging. the China, and and X yields revenue outperformance. driven than than yields revenue Internet were was North increased midpoint by up our shore X.X%, Europe the excursions better-than-expected X% drove which America Onboard Strong more

our overall While for were the the similar as yield average. impacted impacted to yield the of the to the quarter revenue storm-related revenue absolute neutral losses sailings essentially quarter, were there negatively

were excluding costs, up cruise fuel, Turning to costs, net X.X%.

guidance, better driven than reduction in came than cost by an mainly metric timing. in higher by On the APCDs. basis, in expected, absolute cost driven Our came

of share the environment for the trends seeing XXXX. in we are balance I will Now, demand

are Caribbean moved August As Gulf you Caribbean normal, to virtually back six did trends. demand we would five softer to in beginning while weeks the expect, bookings as of hurricanes for softened experience and late to sailings and the Caribbean

strong above including levels earnings and last remained demand for itineraries Caribbean. year's all However, the the our total bookings have excluding last since and throughout been call, both

we remain such, and on for a are As last point fourth this than volume. rate much the and book at better up position nicely in year quarter both

affecting will in full-year and you is guidance. full-year slide getting I discuss early up to cruise revenue our hurricanes, improvement are and the our versus year. X. underlying combination through expected which in the The for year. XXXX, the approximately guidance take will driving guidance are XX up in Net QX is fourth-quarter for guidance guidance of Before the points. to which outperformance impact X% yield year X%, Net the be QX I basis thoughts to fuel, prior of expected approximately on XXXX, for our now in the an yields approximately our is full costs, our for strength be despite by the excluding business increase negative

in generally actual As with our the the are are hurricane, excluding but slightly of guidance. million, guidance, fuel storms. by previous $XXX per-berth the earlier, relative down to prior anticipate costs, our I line distorted We noted figures expense

better the to We for to through at position, of from the three interest $XXX to which Based remainder exchange impact been $X.XX years for $X.XX. of book established Double-Double this more on a adjusted negative to and year is $X.XX fuel hurricanes. $X.XX joint goals, remain In XX% in from summary, price we a able the strong and are of expected range we accomplish prices be on a stay solid able the onboard currency ventures. metric to were our $X.XX rates, performance to earnings better-than-expected prices, rates per ago. current We range per our track share EPS hedged We've guidance within exceed than of despite revenue at year ton. our fuel the our a trends,

yield terming under Double-Double XX-month mentioned, we the that targets these for deliver success, and is combined culture control financial further our our program by The established and reached engagement, Double-Double per profile we three-year our to earnings and improve Vision. moderate will are provide formula our modest trailing share end capacity basis, growth, have on and cost for Richard the strong with foundation As the advocacy The growth, return on a targets. customer new improving employee double-digit XXXX disciplines expected of already XXXX. double-digit

These I returns. the increased earnings to our our combined million the capital guidance, would by program shareholders. in continuously fourth-quarter Since $X.XX quarterly Before new our of shares. $XXX for and actions, last company $X.XX improve walk I dividend per upcoming like repurchased the to XXXX reflect through Vision, you with further our to share elaborate and our on call, completion our returns Double-Double our commitment

Now, let's is yield our net to increase slide anticipate fourth turn to guidance We the on X. for quarter, X% which of X.X%.

XX redemptions cruise the basis expected are fuel, quarter. costs, hurricanes our of to mostly on Juan Net QX by third is While San did yield for extended negatively not up certificate X.X% figures per-berth departures. and in approximately excluding approximately quarter, the impact points, crew the period soft bookings impact be the reducing future of

investments due into this the increases shifting to the planned share cost This earnings account, by quarter all in due and the to have this quarter planned $X.XX significant exasperated for cost a third cost to Taking APCDs per lower-than-expected in our increase and fourth We be was quarter. revenue-generating we the $X.XX activities. metric from expect adjusted hurricanes. per to share

preliminary for some will Now, take insights you XXXX. I through

trends last it's This lot year point and than early booking at time that to for that particularly XXXX commentary our I are are book last trends, of we currently higher same encouraging early on and year. full-year seeing were APDs load still when position is factors better this too While consider in provide XXXX. will even you share a a record

be providing be We consecutive earnings fourth for do specific expect will year yield our quarter of call, improvement. our XXXX but not we ninth XXXX until to guidance

XXXX for next our fleets, of our expected the I will comparables is is a to that to approximately new for will improvement shipment are that their more of deliver note cadence some wanted brands and difficult XXXX. to considerations year, There factors will moving Before throughout X%. next capacity few cadence into which yield influence our a typical overall to make X%, of three XXXX, approximately yield increasing a year. welcome In not

take We of Celebrity late Sea in spring, [Symphony the Pursuit welcome Seas] (sic) Symphony the of summer December. of Edge delivery introduce in will in Azamara and (XX:XX) the

In the yield of of from first benefit Seas. Legend addition, year-over-year the sale see the a in we'll XXXX quarter

benefits hardware As four such, we will see XXXX. all quarters of in

QX in of QX XXXX Also, than earlier and We half the have days will in the did QX. yield boost yields QX. Easter yields timing which will at expense drydock XXXX, will help more first we in of in the of hurt in

Now, overview for an about deployment programs deployment in year. and provide of the the next year in to of fall in like Caribbean the summer count the our of half total new Seas for and Symphony Northeast. Caribbean itineraries will introduction of include will I'd our the you next

the sail Before of Seas heading inaugural season in in the the summer will of Symphony Mediterranean, Seas her to the Freedom replacing Caribbean, Barcelona.

will As Seas' itineraries prior the of resulting reduction XXXX. Asia-Pacific the Europe capacity will slightly back than to a slightly in transition the in Caribbean short-term Spectrum our region, a XX% in versus is XX% capacity, result, XXXX less will our be up of total capacity for XXXX. Approximately the which in arrival in XXXX. Mariner of to of market spring, China the Seas account in

operator for a I our Now, question-and-answer to call the up session. would to ask like open

questions. your The floor now is open for

from Steve Your Stifel. comes first of Wieczynski question

know When outstanding consensus are be Vision. I of around share first all point, growth XXXX. kind Good this, XXXX. but the well. guys. question morning. to of is to actually results. hate going to I kind glance down, break already These is a EPS Hey, XXXX the the does me it I saying seem conservative guess you're $XX of At you you're first going Yeah. doing only this XX% north for it XX% think at through with Hope

So, of what you can help in embedded your analysts about maybe us aggressive think help or are think us getting the you've thought-process? with drivers either too some

surprised you Hey, not by Steve. hate the also We won't and question.

I of cost to a that believe our specific past not growth, is that look I'll Vision, to specifically in we growth, specific what say but moderate a formula So, we're I what what control, tell moderate XXXX by XXXX. the that We're think, the expect that in is you, is number, target kind seeing yield we good giving seen is as at from double-digits foundation would we've capacity success. earnings we again, the of be which the

we're think double-digit based don't to that again to trying on is number. you that to What to coordinates I So, are earnings. get that do a specific guide we're trying pivot the to formula organization

many to that Steven, hate I are XX% first just rates. and you, that, – yes, won't there I aren't add XX% but giving targets think if only with three-year to could said and something all, you of companies we it's growth Richard,

the fleet, crew, good our of performance satisfaction investment employees, success, think to targets really for think that's the manage for intended financial ourselves really first like in business. something it's that I programs be also the emphasize of place. intended these – cetera. the use really I the And to pretty community. guests, our we engagement is the But how drivers This on our good that our I on et we aren't to focus for the to of of that drive

got would so, the Double- internally, financial us And come metrics it success Double, think make that, was but the I of the things to really that of the out everybody was pushing successful. that

financial emphasize our it important are we feel need excel. us I I also and understand so, have continue it quite But well will And to people. to think we those say, I just to and metrics XXXX would drive that about the I and what of as to to just think would part that's communicate that. to like good program needs

wants a seems now something Okay. it there this Jason investors that out notion And or right Rich you there's Got then, this guys address understand if help take be first question, if us for to perceived but there could don't I bunch from XXXX this, weakness and second you. quarter know given Can seeing maybe at impact. that you're the storm Caribbean point? that's of

the yeah, remarks, to there Caribbean. our demand in five weeks obviously of mentioned we around were and six in as specifically softness Certainly, that Steve. would be sure, Yeah,

XXXX. that actually nicely both Caribbean expect the lead to on is add volume basis that that what for were said So, rate a you up and on I and rate would we've quarter for first quite both be to we contributing I to and would volume we the up that.

in. pike? obviously potential sneak any down Okay. potential update been pulse out a one you you're quick an around Can obviously your the changes terms of And more and there Washington, Got Richard, chatter if have how of you I thinking us when there's on coming you. D.C., changes. about in can policy lot tax just guys give

I would that. think maybe on comment Adam

in watching obviously, and happening probably company industry Hi, Steve. every Well, is carefully very what's Washington. in like we, other America,

our that. We're and are CLIA, changes any association, point, this expecting this is advisors at a not fluid tax industry situation. but clearly Our spearheading

The day. and watch of Washington. politicians we're years to the of last is screen of still radar success proud we've on industry scope the over a where XX growing our We and that the very industry, have small for the seem although to the in be things come cruise types we're every in

this at So, for is point, us. positive outlook the I say would

Thanks, results. guys. Great

from comes of UBS. Robin Farley question next Your

Thanks. Great.

that interested was North I of one Europe question in in and because on better So, the came the strength Europe. America, and close-in commentary QX but China China and each in

the better will of First tough American about I that I component or (XX:XX) just be think to just you're for think and North in year do – make to the driven airfare growth where thinking that us price Thanks. last that. just going? China expect would because curious in on there to was then, with full close-in China, Europe, strength, are And your what had sort next conversations then, yields you changing than of thought? positive of one be charter is you year lack I commitments capacity actually sellers sort those about the And and in sourcing would that ask is about next European the fact help growth going because minute I words, or about European guess the have airfare just it other sourcing, to year supply European would to to expect going was to by strength has the

just first we don't being I'll of there haven't lower this talk the Hey, take his year. Michael for next on what Robin. about year China guide yields capacity point point – and specifically China with on view we and he by or for market. I'll Obviously, let

it's around was comment seeing even creeping talk third demand quarter had to expectations was in I'll strong up, it and And about XXXX. a trend better close-in but the also So, been that than into that relative quarter. let the fourth going we and the our Michael with expected we had

of there the capacity rumors Yeah, bit if an to South opening the kind little China that. a the and there's on all we're market encouraged in and Hi, up be in will XXXX reduction we're with to regards by Robin. hear also announcement waiting Korea

you we American of So, feel typically looking work promising. to market and some source there's European well out feeling China when doing markets. on you very the sourcing have know we're together as all about distribution two but time quite switchover those more and been tend closer the years, XXXX. we've building of European bumpy always North up if XXXX you get opening years and And for the sources factors is channels, of we the quite in Europe, sailing, then the then combine that good at on and that It we out product. look the good into we On

the very One of it's forward Harmony Symphony that the Europe be bookings encouraged will we've the XXXX, of will and at Barcelona. be in got sailing course, and for Symphony We're out of outperforming is things into of moment. the Seas the by of Seas introduced

mentioned one not Okay. double-digit make earnings, just earnings growth then, Great. sure that I the double-digit double-digit you – rate. it's clarification just maybe earnings, on want final And to really

that just by a clarify curious repo how you So, what to that, above would I'm much including that mean that. that means share at actually I'm Thanks. in I XX% assuming want be least and $XX you're which share, earnings growth.

Yes.

it So, Robin, relates now per the the target to double-digit XXXX. is target, between share as earnings and

capacity specifically get control we And to then, and target double-digit the goal off moderate earnings well, earnings, moderate the but as to to you to good share growth, rate a Now, see yield underlying of repurchase, growth is is as based double-digit cost the need it growth. earnings. how relate have performance, around

Great. Okay.

Now, that's Thanks. helpful.

Thanks.

comes question from of next Your Greg Badishkanian line Citi. the of

Great. Thanks.

Just two questions.

your expect think and go to would bit deciding passengers North to is where then and to the a say, The like lot strong. started you Caribbean? Do the to second sort about normalize we of first, American booking are, not regions stronger or passengers trends And maybe so – cruises some Caribbean of concerned were or (XX:XX) foregoing you Europe some then, that going part a when other let's little fully of that elsewhere are Alaska? booking the

pre-hurricane trends Hi, on Greg. levels. booking to return normal We're already seeing

happens terms a year give that do we seen people other regards So, we've then, take other than idea the Caribbean, normal with of anyway, are correction regards in I in take the that already of occurring kind place. and seen idea. maybe but trend anything with destinations, mean this, noticeable that a of And to to switch that booking out people that destinations haven't

Right. months Yeah. very and you long be that Is Caribbean normalized? it fourth demand is that spur quarter that for of first the And and to XXXX. in in would few activity, quarter assuming then, level next to elevated should of expect the just things the promotional that's How the assuming I'm then, also elevated? last

promotional Yes. short we've activity as XXXX. how bring as a we into been it's lesser. kind more or funny we're booking at After I up. I our passed, cadence we period promotional regular look but you mean, now, have gone and quite into our of don't hurricanes time, typical promotional of that push we into calendar is greater activity any QX has did that any feel like for the

also normal as a its it's our price integrity So, reminder, that's helping that return we out. us really And, of program very levels. and course, with to pleased just we're have

Thank you. Perfect. Okay.

You're welcome.

Your next of Jaime question comes from Morningstar. Katz

discussed question Royal consumer a behaviors evolving they that know some you and lot surrounding guys earlier. expenditures mostly the have mentioned capital actually, I was tie Amplified And you everybody. given of that, going that morning, up of and into surrounding I bit I Good that those to efforts a Hey. program. assume a this be Celebrity Revolution bumped have

spend some delta planning about to bit the technology and little into is majority Thanks. of a what the of talk of you're you will that going is maybe So, to some that that if then, and launch? tied

modernization some of few that the cited. we've two very and that successful It's last of ones programs something the Most So, found hi, Richard. been in are with doing Jamie. you ship been It's over the we've that we been years.

So, this that. is continuation a of

Some of terms things what want. consumer ships we've of done very really our in trends are on newer the impactful and that just they

that's so, a very it. part of And much

is There in some particular investments, actually. it of investments, related to it we also of which Excalibur. digital our call bulk the that's technological So, that is our

about talked So, we've that.

those be more where have investment already today about tomorrow to in the we day, we're increasing. or see detail, been in lot technological but think see a going that I investments. need We we talking a frankly an making lot, but We've

And so, to. the you're of that referring part increase that is

any you on just market. that middle-market the And that are like there? and bolstering Obviously, there's a curiosity, the high-end Thanks. wondering then, high-end coming out and the between confidence in ship part spend I'm you for are Thanks. consumer, consumers of your Azamara seeing guys that guys some consumers are of sort seeing if new bifurcation there's the of better

how Hi, seeing Jamie. really confidence from kind of and in It's all is coming a over onboard lift mean spend we well market and really the Michael. consumer think reflected all segments doing. we're stock I that's in

everybody the the moment. spending mid-level, a more is at So, bit whether or higher-end it's customer little

we to you I much example. like more remarks about across spend things seeing Jamie, than think which see just trend add, mean the is money you're thing as in one board on our I is an And, retail people talked experiences on in one

or excursion not it's you Internet that's of gift than are and where shop something across the is my shore of in experiential higher-end, that really nature things change just around or see all commentary in more So, out the this beverage classes. kind

ships with square allocating things of versus or forward do the with going zip space that retail the the Does other lines? footage parks like how you about change think space to activities versus

generate bring really see through naturally that gravitating to. and space two start see Hi, into the we modernization, how talk when that's Amplified, changing guests really thinking now a that about of going areas of that our does. lot Revolution the when Royal programs, program out it we've is guests Jamie. the to we is Interestingly, and better we thinking Yes, these revenues Celebrity reallocated you'll the that to really in spend ships

Thank so Excellent. much. you tomorrow. See you

Thank you.

of comes next from question Bernstein David Beckel Your Research.

because or Thanks how or you trying of secular to with And do organization X% which of would said the yield bit seemingly Richard, of painting actually growth? question, the for Are events, Hey. that the one-time get to suggest spending positive a pivot obviously you trying kind strongly. maybe industry little not wondering, aggressively trends, like yields high-level this a the wants of goal rates to X% square in range? to range to them I'm moderate to question. You you're just of long-term to that picture higher-end improve, I you're the coordinates. strength for what pivoting more jump in, certain to but them internal year, maybe a appears very whoever but general, be push have you to very Richard that of continue a at it could to a sounds, like certainly

Well, you. David, thank

how bit summarized I needs realistic be industry underlying will to my little you quickly do strength the think things. can and I that you one view the those I continue. of accurately. I think is think powerful move that a just think about

to pivot obviously, level maximize trying we organization that. a want of to direct What will And website the to the clearly travel is we are to to cruises. organization and strong yield the improvement. so, increase. that not yield to in drive will our think, agents hopefully continued want to we We buy result And things basically our and to consumer provide to that

large really are yield increase, moderate we saying strong that to don't I results, yield improvements. by staggeringly get trying So, we think to telegraph need

accomplish we the intend this an we that. did growth. break effort out can are every very results increases, know if relatively line we we get yield to moderate can where exercise bottom to industry X% how to that obviously if range, strong as X% in But really We of year, we

That's one on follow-up helpful. I appreciate China. quick that. And just

touched pinpoint by you it widening in as efforts strength recent more to but like or briefly, to directly relates You can distribution activities anything in that seen strength or that relative market? it expectations, made mentioned your influential certain channel you've you've you the your particularly all on to at

David. Yeah,

I various of the of market we've base think channel, of the focus years us. in we progress for we've the market and pleased put that the then sellers, been put beyond and a years particularly, China many actively on resources the couple made of do we of for the that. channels intensity We've very wholesalers, the quite certainly direct lot results and the developing expanding last development a lot we we development increased of that And into with to it's example, the been there. the typical generated, done course, of well for

we're results beginning back come, So, over to past the – I to think, years beginning seen of us. into the we've see the pay we've market that several work for put the

you. Thank Great.

comes Felicia Hendrix Barclays. of from next Your question

a stretch to asked be for I'm get word there in you the then? Hi. to said he it by and of at the wondering I maybe question up earnings wanted Thanks. there's if anything or follow from would Steve call on maybe XXXX different double-digit you getting way, way. just Wieczynski's the that that beginning another preclude a XXXX in it Vision to by would

even for for XXXX, yet let XXXX. haven't given So, we guidance alone

Very demanding.

know. Very demanding, I

on but cost moderate of we that, period. think yield would earnings reach growth targets, share on before, that that the on improve we'll and on one our ROIC. look during kind to at good and that there you do focus to I our we're continuing stick going think yield cost I can the we sensitivities per get as you those double-digit again, being of and control to, Obviously,

states And with that narrative your years. Thanks. that There's could supply in next that certainly your the sticking community optimism for of business. Okay. growth a the the implies time that obviously three the increases Vision, XXXX investment limit over trajectory

variable in you how the your role discuss played think to your supply I So, you extent years? impacts and it next a several a just growth was outlook over as wondering what can

Richard. Yes. It's Hi, Felicia.

Hi.

think I was obviously, So, I that point to was trying emphasize. a

You have at of that. to look both sides

the is and You in it. have in side side I to that. a with it increase you, supply demand the of And look at clearly factor agree supply absolutely the of the

I the attractive new the think demand they confidence I'm yields. attract are for bring than that believe ships and more is the increasing also they in expressing compensates that people I reason because and higher that, more that more

the So, next all I year bit this know has tried think as it we've Vision side, is to and little to than been. the – you includes say, taking the and look supply that that a into which, few the at we've tried next years put we XXXX higher together, account about

the be giving into Thanks. and then each also taking And I color Jason, of dry-docks And, housekeeping. a the you then, you the quarter kind do to then, cadence my thank quarter the you second second for final to wanted account that clarify, expect is up down? be just be yield because of us on quarter do quarters. up just of expect or the year and shifting just next could less to Easter

dry-dock yields to and out, in shift pointed would QX four than but to would impact. because the as be we in higher that expect I the quarters, be in expect you all of say we Easter QX in up it it be

Perfect. so you Thank much. Okay.

it. got You

Shojaian next question from comes of Jared Wolfe Your Research.

dry-dock puts morning, the takes to well. and have hurricane for against, that Legend comping year, you're for also thanks you everybody, next about the we and Hey. then have you costs on think you as called Good days my gain question. and tailwind more If but taking out the

next year next ex-fuel? rate a growth D&A XXXX on and about should as So, terms will the year, of thoughts that in to far as as lot is reasonable we it then, think XXXX NCC, how well? And like XXXX, costs look for any think

well, not All give going to for right, again, XXXX. specific we're guidance Jared,

are that is going of headwinds we think the did It as will strongly some I our continue. company really in the assets of What on coming are we do to to part that considerations are headwinds every I DNA but, and have manage Edge, and ingrained Pursuit, because tailwinds. side, you is like year in think it year about the much the costs, of will comes very elements with obviously some said, effect of for can I manage you of play good some D&A year. Symphony, key of through course, some the not into D&A. that we're next impact a of you latter that new And there is job us which to tell the are talking the the in those there's the Azamara

expect would had we I more So to D&A rise because than in XXXX, XXXX, new no obviously capacity.

then, Thanks. Okay. just And question. one housekeeping

impact about is the credits you how accounted we having see will me future XXXX or credits talked that that's cruise help just impact in you the yields You Can for well as those just an and it quarter. fourth from an impact? in and immaterial the of those understand

certainly passenger provide called we our had a impacted cruise able to the it's we mean relative them, sailing that certificates. if take of all because changed immaterial Effectively, had future or to had weren't would and I up revenues.

they would negative the as recognized be in revenue in have the as been – when and future. quarter redeemed, – a taken of So, third then would get would certificates impact be those that the lot future that's those

Okay. Thanks.

Your next comes Instinet. of Curtis Harry from Nomura question

been days of questions higher questions, mentioned my quick Jason, Two have you the drydock in most everyone. half. Morning, answered. first

in is be, be comparisons dry-dock second relatively Will more be normal XXXX, sense the I'm days will versus of in to to the in in of higher overall in What they from half? feet Just days first trying will levels or trend a the most XXXX? half? drydock close the XXXX, get XX,XXX XXXX

Yes, hi, Harry. No.

or we of XXXX versus more capacity growth are – say the the of what kind days in the accounted I So, them XXXX, I XXXX, days dry-dock for the most half those numbers to certainly But the typical in would that dry-dock provided. are of that saw but we are year. in are mean, first in

other touched haven't my we then, And question, on Cuba.

Given what the Cuba inquiries I there a Cuba lift cruises it, cruises and that the been touching any, you're that for have it? degree any warnings, getting but a to as are on are of getting would those to doubt pricing travel result impact

good a business Initially communication very calls and when media, to Everybody partners. Michael. It's trying Harry. guests the for normal few seek a and we and this product. from is just returned our was of Hi, days, but Cuba hit obviously things spike all the after received to literally in travel clarity,

it That's good. for Thanks. Very right. me. All

you. Thank

question Securities. of Your from next comes Tim Conder Wells Fargo

congratulations, and you the organization. and whole Thank gentlemen,

a an so Just the you whoever couple even You've for clearly, talked forward an this. that you domestic it's follow-up compensate last more wanted And the Wi-Fi going are Richard, tomorrow, mentioned update, here, happened to about the any into here. I in How mean, forth, then, I that update XXXX grown. the said and that's before rollout than think has been that take millennial capacity, years XXXX. Can looking here wants but, started growing to question the here that that way that it of get give into cruisers? what's you grow, here, in XXXX? on us three ask the changed demand's mix? XXXX and Has and we'll the early and more looking accelerating in or much fleetwide to Maybe with particular, you being also but the into has first-time Excalibur. going

year-over-year, to to new of the acute developing decline back pleased with the well, in of an the before market we've you fact, and – made for cruise to brands, and cruise past particular Hi, for increase been but years. part a where very And question in and over past if we millennial got regards the were a situation with take new three a we've I'll that progress good Certainly very cruise year-over-year. the go focus three-year in to Royal, millennial. new three in we've over that millennial Tim. first saw we years, seen and actually the and period, on we've all the

part cruise we're that journey. and and focus on of seeing So, marketing that's our good progress continue very kind and millennial we communications of to and much new

apologize, Any versus a any of there as I mix color to – color you ago? millennials give can you could the related years percent three

the you carrying several several past Tim, kind over give XX% we're we to about Hey, did ago. just years, than years a sense, of more millennials

end you'll of pretty detailed XXXX. rollout the Tim, by to obviously, XXXX, delay the Excalibur, that everything see us the half of much of end probably corresponding digital some of for the rollouts. XX% a or new almost to the XXXX But path that previously said. operations on still of weeks in are XX% going your system, question disrupted by end good mess up seven on tomorrow, overall, a we of the more it's be, of had course, and expecting six caused this along a we and the did by The bit, and hurricanes

So, by that's and going the much pretty large, as as was, on disruption frustrating track.

Thank you, Great. gentlemen.

Okay. Operator, we have time for one question. more

Okay.

final William comes Your Blair. from Zackfia, Sharon question

have I'm snuck in. Hi. morning, to Good glad

Good morning.

questions. quick Two

equity the lot up a income, investment that year-over-year. was On

to to or option at? your passengers know what Internet like don't is you I now any quarter And are really I on I you that. and a don't you've this taking at taken sea? feel but penetration are we driving on now given if that have looking the you touch recall, have maybe every Internet that available cite guys secondarily, could percent was of metric before, And what price if them that So, up

Hi, Sharon.

that around is Internet then, combination grown it's over more give of of a side, keep income really kind on we our the story it and up the drivers really both in joint equity ventures. is on but that ships. the don't a penetration as obviously the and line. below joint we leader are be a people would rate now Internet those TUI driving the time, number it's side, of introducing On underlying things new use venture on percent And the we no, bandwidth mainly and has terms Pullmantur how have the but also it with as that, attract that our well to of

you. Thank

Great.

Okay.

Carola your for be call for all day. you thank and care. your might in available wish follow-ups and and you interest a Paul, you we So, great the the thank we have assistance will with Take really for participation you, company. today any all

concludes gentlemen, for conference. participation and This thank today's you in Ladies your today's call.

You may disconnect. now