Royal Caribbean Cruises (RCL) 2 Aug 182018 Q2 Earnings call transcript

Good morning. My name is Thea and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Cruises Ltd.

Second Quarter 2018 Earnings Call. After the speakers' remarks there will be a question-and-answer session. to Financial like Mr. now would introduce Officer, Chief I Jason Liberty. Mr. is Liberty, yours. floor the

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

Chairman Mengolini, our President in Richard Miami Joining Relations. Vice Executive me Carola Fain, of here our and Officer, and are Investor Chief

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

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

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

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

and color prospects Since optimistic that we the very over positive the our quarter direction this next. about successful morning, another we our nicely was we've and XXXX. what about good the year business. Simply improve give some feeling and additional and for been rest only Jason, amazingly on grown then, record-breaking more you, of to an and year could year, a record-breaking happy It's I'm put, started Thank everyone.

still we the look the to on year our the is or how last interesting to focus over whole, it have for months six while Now, back so. evolved forecasts tend on individual quarters as a internal

Our for forecast higher quarters in tell last were you, January. when four our they than of expectations put each the current we XXXX together feeling. nice that's are quarterly initial I a

but Of course, that flux, we the a builder. drivers in are seeing our is expectations confidence quarter in the over overall are that strength of the always real of yield each year improvement original fact

remain total below-the-line firmly the beautifully. items our at doing Looking picture, under continues excel, cost control, to are and revenue

unexpected second and some performed quarter strength and as markets usual, The from benefited worse-than-expected. bookings, in better last-minute some

substantial from quarter second some other costs and timing also The items. relating to benefited differences

of the Again, quarter's which manage on one, these beat business In types and of half. fact, annual more an the roughly our was second reverse due swings timing to to half our will than are in irrelevant differences, business. simply basis we quarterly quarterly a

discussed. this especially we against good simple and a it differences timing continue parameters. extremely is moved so year, rates when the story with is the have foreign simply reasons that business still strongly than quarter's is point-of-view more we Having operational within and to previously but on fuel of This for is good be headwinds From business usual, have expenses frustrating, to believe both exchange deal us. will

fact business strength powerful our negative it good about the of is is, for the feel as that more forces. such than compensating frustrating we As very

talking about image well the position to results people hard since a myself this a to performance in of pedaling are Caribbean I Royal example that new duck through outstanding time Symphony worked particularly surface. our how of keeps for International how that Now, water, activities no to once the the to continues a debut the image stellar records are described would Mediterranean. setting find year today. performing recalling seeming Seas the retain while is the deliver market fierce our a calmly shipped the underneath the one its It's latest marketplaces. guests. be I first sees market. see have and glide gratifying ago again of the The of that I know respective we their for in brands new spectacular pleasing our Her in goes

service, of careful the and achieving the new when team cruising record the activities, public level of in The resonating luxury ratings prices. also well Royal ratings. she to is truly the series brand. on the been roll. her perform what is but these which Her the with ship testament new Celebrity power very sets to execution incorporated International For and has has Cruises fourth remarkable new modern wows, pivotal Caribbean brand high a of a is a is have her so propel innovations amazingly nicely the platform has to the record and is helped and record-breaking apart and shows

often market, Azamara that offering Cruises all first an interest is is a Edge TUI helping the on industry. marks it. unique, amazing for on new and line TUI We the but And manner. propelling agents. today Of strength with today that rest cruise the brand rare We enjoying have top guests that to often experiences its all-inclusive particularly one The strongest such the from result is of set focus well. TUI surpass the heights. it around bookings global And for wonderfully. cruise on to we strength. only goals one particularly very to in It's evident. helping now are. addresses this all excitement from gets Celebrity is surges and it's the to fleet implementation Celebrity and and and cruise stars Azamara ideally performing is align to course, Cruises' is of not clientele, outstanding but also continually travel voyage German perfectly continues tough our strength the brand recently, continues more Cruises ship, It's well, future suited to Club have growing in strong on go the doing innovative and Pursuit auspicious destinations the as Her the is her they but that high-quality,

As not I case, picture. said the when this of growth. to ought look half very rates and on to before, demand by against it the which the equation, which supply at is to demand for by look exceeded capacity, dynamics encouraging picture essential focus moderate supply strong both is be growing the yard constrained side, at think In and be which we very normal demand is assessing sides only

fact low. go that past, attribute still of was become is of One people vacation over I seen somewhat of consumer to maturity. to we looking effective cruising in world still has vacation these niche way many so reaches as amazingly are a mainstream increasing to continues experiences Nevertheless, But our as around by the base. goods to factors that increasingly a changing been the alternative. mainstream of the more In more market. today industry change drive this responding the a we a for choice. a demand rates material long have the before lot desires Penetration industry cruising have and are relevance and of our

visited went this especially tourists and is around the our for to perspective, world. that and cruising XX million last million to at the million go. ways Orlando continues We Las period, have of XX all the same of industry Vegas. tourists year to demand a about an to grow In entire carried City for rate. in this put cruise really XX Just do The attractive result brands the

We continue and are demand itineraries. that the to our responsive do products, with to features, determined best to to growing be utmost

we higher forward, XXXX, they're have booked a than ago a did of we year XXXX prices. Looking at higher and booked percentage for

want we're very this sounds reemphasize reasons are this. important about that While far happy to is to appear I this two people and for There very as as the metric from some one believe. position, good

choices metric of is result often this we First, make. the deliberate that

that of so market reflects and we as to be recall to was the year. top we looked one were reduced it's suites our example, convinced our In able – better we also worse-than-usual, higher For were market the that on even was following year would deliberately actually We going prices where sales that. to strong advantages category it I book that optimism position but our about it right improved. case, the take part. say of I'm happy get

of is of structural. possible Another example sources confusion

Thus, traditionally our their dedicated of prior our bookings stats as our booking inventory last For not forward of it that we that these while markets expect many reservations we're our later. other This systems to accordingly. do our know operate have revenue happy simply based that but and well, years, markets example, sign about example they Obviously, management does really problem. we definitely than a book markets, higher will reduce combination factors. to but year, on to is a well relative XXXX we more as is next make a optimism later are of year

now much very insights very art I on as some well has the where give like remains a it But yields been science. partnership. record would is art an revenue Forecasting impressive. track further our as an to Silversea's you

as us rounded and, agents while side, Silversea commercial company how more vacation option. a the efficient relevant can therefore, more reaction Travel grow strong. extremely been see On become has making more the and also a

As digital eager close I opportunity closed to before partnership, deal Silversea technology on with on prayer. had our We yesterday of we times day the market the progress portfolio we announced impressive. is Excalibur, take Exciting like it the at the answer the project this ahead. you an platform. was a to top mentioned on gap a work and our when track is update to to segment we The want just to brand this integration. and on and in is also program a that its we're

today approach a a they us end Edge. is we most of approach also methodical, of the the of impact continually of the will vacations. move distinction rest out a but trajectory connected frequently. implementation, fleet and on over rolling that interesting We're on year taken have softly the the Symphony be on version the Celebrity and monthly of softly, December this We is early to One upgrades Seas that this more this or agile basis complete app errors lot most more correct milestone taken finding app the by by features and arrival. quickly, having add The allows year. introduction to to even of next in by of of frictionless to new our the We before end half remain

believe this our life of of XX% on scale the platform dramatically that purifications we over fall. By IMO about are buy AEP or operational our to These on for the the cargo, emission the but Symphony after regulations the our buying line. given be air. i.e., the by removed which out will all been that and or this our you that into change lastly, rolling large being easier essential frictionless, public-facing two Seas employees reduce regulations limited been meet that new fuel by require not don't the figure had in remind fuel the emphasis later will are materially have to any regulations, already before of mention ourselves digital Celebrity the the a our XXXX into coming cruise sulfur which XXXX. our the and force sulfur our sulfur back Today, used also date. term a ships, has that XX% ways: on would other in aspects so data this success. And in We the success better future it on systems, much refinery and way, removing before expect expect we AEP we on trademarked amount by the I belief of has are the systems. turn of cruise I We using they or that emit analytic the and call the to at Edge work, recently tools, basis behind-the-scenes of has and important, removed basis of even want sulfur making Jason, digital it for advanced fuel investing I see that

observers costs the regulations various fuel our technical reasons, new could believe In many actually come regulations that force. reduce once into the fact, for

are continue but topic costs systems, it's course, fuel Of mentioning to our We these is improve and and off levels partnered our in in the investment massive enormously without Wildlife even Fund industry have to to our benefits. paying our of a required have have AEP we teams in World and that of shouldn't conservation I do because reduce consumption. fuel find the further. energy proud work environmental with done the energy leave both lowest efforts investment it this ways to already

are and emissions And We'll our AEP continue such systems energy to to less energy to energy use needs. Jason. use to back towards reduce the good, other While microphone the way get generate to in measures environmental first the lower work is turn with to best remaining and lower place. that, I our footprint Jason? of

Thank Richard. quarter slide are our of about results talking These for will second I you, summarized begin by XXXX. two. on the results

our is and higher For of XX% the share, earnings guidance time the year. approximately same quarter, per $X.XX we generated than which midpoint adjusted higher $X.XX of than last

for basis higher for were areas Onboard which is onboard a driven The dining fuel was an costs demand Internet was is timing. but as basis the year-over-year points half manage we Roughly we basis beat timing year. to expected, and beat It the large the our happens the quarterly up and This spend. were quarter costs unusually driven XXX than as than the increase is it by mainly of this guidance. beverage, X.X% excluding said, rather Net XXX better points better-than-expected revenue so for revenue. our previous view shift, annual little quarter such just in an to differences full our approximately specialty earnings but yields cruise deliver timing a on these by quarter, than up revenue relevance which helped often a basis. for surfeit our has X.X% stronger-than-anticipated in Our have net had onboard close-in costs. quarter, of midpoint of due changes, that X.X%

in quarter back increase the will of an variance half in that the year. reappear as the positive costs in second the cost So occurred simply our

we the negatively impacted In better also quarter driven ventures. experienced and addition mainly outperformance costs revenue an $X.XX to our joint and prices was a by below the which dollar stronger fuel within quarter, A line, the share. higher by

in our shareholders the in million $XXX $XXX quarter, dividends front, and On we million shares. have call repurchased the last we during paid since

better-than-expected So the in summary, our spend spend, results close-in strong of beat quarter. ventures relating to demand, drove the better timing the $X.XX onboard and joint in

both volume our to expect with half rates. strongly line this in on factors year. we at outlook. back booked each environment the very impressed or given the in to year strong be The at record on what point the seeing update been and levels. with you products short at year. is in last of are with very currently for load like we're Now I'd at booked seeing above core for expected trending for the our record with we booking levels volume We've also XXXX XXXX booked increased business of are remains market demand where don't in particularly rate the demand the in capacity We ahead closer-in our Caribbean

the balance nicely up for deployment. for in year factors normalizing these load are the when ships of However,

on Now Demand markets the core I'll provide sailings each an you of ahead Caribbean. bookings for starting been of last very has trending Caribbean update with year's with strong strong levels. our the

market. Our the Caribbean the Caribbean Seas of short year, the in to reimagined half addition the the for capacity the up due back of Mariner of is mainly

Seas for onboard frequent in best modernizing a was short are alternative our generations strategy to vacations mentioned of behind a as Richard to As Caribbean younger consumer the for shorter, last the The getaway our more trends. Mariner class call, segment opting response the Mariner to offer ships. and those particularly and are activities, is is very Mariner Seas excited we of XXXX. positioned well entertainment options booked very dining Oasis Seas for the and on this the with about similar well of the

to Caribbean don't night of shorter are are the While products. we seven than those more closer they load short expect receive away, to generally first than XXXX that Mariner in for to of half of six many bookings months sailings factors Seas' are products the

XXXX the for Atlantic, months. side XX% record turning of summer for other with demand European strong the European global than into the itineraries and capacity On XX% during more is sailings of breaking total account season markets. across our Seas last but the the achieved and European this than comparable. better fleet despite of also show the source has year better Symphony the star definitely difficult XXXX pricing of year, from we've been another all pricing a

Asia-Pacific Southeast second our the position XXXX itineraries, in our winter a well yield for and exceeding XX% overall sailings Regarding and products. in performed also growth Australia for they be booked full-year very account quarter, we and continue our China, of Asia to generating our strong expectations. strong China capacity

is booked expanding for of volume contributing and the and year in back China addition, have our the in is network. teams factor exceptional made In A rate distribution both the the XXXX. ahead progress nicely half into

on provide thought I would few it's way to about early While too next I color make any comments specific XXXX. a year's performance,

As earlier, for are I strong position XXXX. we a booked particularly in mentioned

each rate and We volume trends Caribbean, of of demand are great products have core these our both and signs ahead booked for Asia-Pacific in dissipating. and European no we

Richard indicators mentioned, mindful metrics to be citing these are performance. as as we have as of choices always a Now, result and of when them deliberate

start talking Bahamas. island Perfect are CocoCay Miami very will to and the private would like be year highlight on new of exciting as about the operate; resort our to an atypical and waterpark innovative XXXX, terminal two that new While we XXXX and Day stunning cruise I ventures also in in will our

innovation also this. DNA to support two and of our growth these projects company's and the are As new destinations the is his better and in remarks, mentioned proof Richard in of creation

our tailwind headwind a XXXX. provide for costs will for and As in yield such, these ventures a

XXXX. guidance our guidance updated of X puts This that to per $X.XX guidance for to and talk share. we the $X.XX are includes some turn would slide about April Overall, like highlight. to reaffirming full-year to I takes our let's Now updated

$X.XX, of the in year. booking On which of back the mentioned, half back relates trends, the costs are to an the now the expectations to strong planned of increase driving of our the we year. by beat for the I that earnings quarter spent half half puts the in be Also, approximately side second previously are timing which

prices On half take year dollar the higher $X.XX April the impacted stronger the of back our fuel the and by approximately side, since have call.

by the expense approximately our for Silversea increased investment. have the we interest $X.XX price account to for Additionally, purchase

in headwinds from summary, is fuel. our and in FX further accelerating helping So the offset business strength

be to Cruise per As previous is in back we approximately Net our improvement driven it our net increase which the relates X.XX% in in to rates, and X.XX% half full exchange expected in along our key to yield This to the From guidance. including range to QX line guidance. fuel with our current the expect XX our with metrics, revenue up fuel of perspective, are share be This basis summary, XX% approximately on $X.XX, being based adjusted point year. in we expect cost the current interest the $X.XX revenue is for versus earnings the in outperformance a In of prices, range X.X%, with year-over-year in outlook previous expectations, a an increase for currency Costs by increase our previous to represents the line and earnings. the of year. outlook quarterly business a

we million and expense fuel year We hedged. for XX% $XXX of expect are the

is third the Now on slide four. turn guidance which our quarter, to we can for

compared the and quarter expected are yield earnings from fuel outlook the the XXXX. for on fuel interest expect in $X.XX and Cruise revenue a third of X% be expected of which our excluding rates X.X% This on Based on quarter prices, current guidance exchange effective approximately top Net includes above, of $X.XX impact in for currency X%. currency Costs are last per down of expressed to adjusted quarter, to yields to per rates be third call. for to earnings and quarter net to third share. is the be the We increase negative approximately up approximately the the fuel range the when share $X.XX

of the which in we to will this Now before a we I begin on would to like closed month lag, consolidating be talk briefly Silversea, three their about the means operator, the will operations turn I call XXXX. back fourth Silversea quarter reported which week. earlier with

So year, results. fourth will quarter part for results presented this our September August and be Silversea's as of

I the relate costs to our includes financing commented, As purchase of $X.XX previously guidance that price.

considered results items for in August the operations and accounting have related purchase for and forecasted guidance. been However, September Silversea's our not

of their impact Silversea during earnings share. noted we As adjusted XXXX materially corporation's the the do per the transaction, results expect not to we announcement

yield and plan to adjust we related accounting purposes, purchase one-time adjusted this and demands the costs and metrics. other comparative One of relate a and brands. on non-cash per related visible metrics. yields entails bulk is impact relative For our cost Silversea earnings from year result as expedition that higher the our and an will our ultra-luxury higher berth brand transaction financial to cost adjustments of to non-GAAP

mean impact consolidation higher bottom per to is a Silversea in and immaterial, for will average of our higher operator call near the the While And ask for that, be berth. with open will question-and-answer session. cost company line up I to the the term expected yields the

.

will question Steve first with Wieczynski come from Stifel. The

little question it for here, and a it XXX the morning back disagree the the bit been basis the maybe in the XQ being capacity little about? maybe else slightly little great realistic be the cautious half But yield is there thought the is. points congrats what be that fall be and beat by around in Good consumers just guidance a And might you something quarter. this with have Europe is first around weather around much quarter guys. I Caribbean need a activity guess than nervous guide guide, guess is, your us given quarter Alaska your fourth you like you'll Hey, quarter implied the here yield how seems you being around we third year more around have to guide. but conservative and could quarter, could I you close-in are question third have given midpoint. the higher second the would thinking a on of for being or bit since especially at more you're we

I'll the for beat. say of it's whether for Well, balance for you to as year, of thank I relates best that I do not where the is second we provide how I in fourth start kind and see thanks or would based the coming and time. quarter or conservative, position, based to really the of guidance, quarter would for book are – off quarter bookings off have it of the – this the our our word our caution the the in. would guidance at say I off information would we just we try the

I be we particularly quarter we year. we the for a where we're I'd out add. actually and of had now of third like year giving quarter, of exuberant last would our forecast ahead, think to just thought is Remember, the when actually, the at the ahead guidance Steve, we made we're beginning –

year's very nicely. actually So the progressed

The second us. to quarter happen. surprise a beat can That was really

last do You sudden frankly, quarters that's to it's minute little did it and, in absolutely unpredictable And in a bookings quarter. surprise bit happen was a lovely. that where it's this a last have But and – surge us. there's

XXbX-X? guys $XXX million are question, can you But ask help can Thanks, understand remaining question, that guys. second us but of going personal great. Appreciate bought know since call. your And a using how forward? help us you you Okay, Richard, it. going I the why – last back worth you you you understand I'm about authorization stock then unwound thinking to And maybe your

Okay. I'll the start off million. with $XXX

continue we some and way that as at repurchasing that see for think opportunistically behave said in us you I way. will the time, we've share As look to

there's on to credit. But and always of So our price as that's answer – will how being share proceed investment-grade leverage are maintain on debt repurchase timing. more side. our sure let and that Richard Obviously our structure as opportunistic we we capital I'll us is we making type personal kind structure not combined that his continue our with discipline the of being And specific ratios share kind question. the of or any conscious about

on view. so went didn't Thank now. sort I while understand, few that. I've you, like continue things, Jason. just that. comment ago. a surprise sell but not have of in a not I can't price it's see – differently things to gone do sell the from the times bought. anticipates as We that a Thank you, to a put The in regular certainly stuff happened I like in because quite allowed on that I anybody we've to don't these frankly, down this. XXb in do usually market this I the in and place program that's happened But I that, maintain we stopped to Steve. I drop levels couldn't and and and I'm share some to to Frankly, has think of the continue and something past past. seen frankly, to of than market but would the program, that, couldn't put and And a just state when I point place I to

That's it. Appreciate Thanks, guys. great color.

Thanks, Steve.

Instinet. will come question from Curtis next The with Harry

Hey. everyone. Good morning,

there rest follow-up the for were the the in some or quarter? Just assuming if have you cushion in mean you've the question. In could I'm how fourth a overall, third be, of in on that And year, that. the the left do Caribbean storms example, a much variability fourth for to quarter? built first I just lot sell there

pretty we're the you mean and quarter especially of exactly I linear I on that's it's one – a call, quarter When a quarter. third north XX% certainly at fourth area, think booked at right. well, Yes, for I of look mean the going the to time

in obviously up take that's this of our back information our did And into for points. XX time. so again, yield it's strong we at going think of have we this based the the And point is but, best by guidance confidence off I why basis year half the

back second to markets was and your but you the about a by When good. next year. And is be example, the you to going supply seeing while to Europe next be growth question relatively the really I that growth flat going a supply Caribbean year looks Very little bit, that major mentioned increase. for into the Caribbean, chatted down largest

So will looks, pretty how question you given level of some early us on absorbed? that can U.S. from particularly give growth? feeling capacity customers, comfortable you that that Are my especially is, color Europe Europe, be in

could which and would than say European strength would levels so products as And basis, – would products. that shoes, XXXX the that European to the I in again, certainly further consumers on Yes, and your and even certainly have we that especially out for books further Europe consideration. certainly probably consumer in if in setting North for that Europe we're in we've record mean in even rate capacity volume we are our that really consideration XXXX out American more outward want strong year-over-year probably in you're the periods, because XXXX, American you is strength consumer talking like Europe North over deployment at other from saying exceptionally consumer. and is is first, do products our about seen in a further and

They that. of their the other of demand the A products, position in next exceed book do year. that is following Americans lot that in advance believe fare. time right. is while to supply book relative consideration is that there air very advance. in meet North capacity for in the year Europe to that's European booking more is they much we So or the certainly vacations because elevated And That in for our

very Thanks much. okay. it, Got

with The Barclays. question from will next Hendrix come Felicia

Good Hi. morning. you. Thank

or you the points. quarter you're I'm driven are the XX was third or net by raised second that wondering So fourth Jason, in just more half yield the guidance in by upside seeing seeing you basis quarter?

balance the actually it's Yes, of both.

said, next than had are quarter is seeing, Richard quarters, increases those course, especially both anticipated As quarter. and in in quarters higher and our we of trends that some them we're those around Europe, the being, confidence this of underpinning

given of and the you issues kind called the people Okay I and even out though things increase double-digit third are think still are so having just quarter in better conceptual Europe, with there. Caribbean,

challenging gives that is concern pricing anything any seeing there more of than competitors promotional being terms you So you of achieving environment kind from or in are you expected?

in I I – about really of at of been year. that have with or But there's I of look the that really the on something the talked we expected for it. a we we as through this concerns when pretty expectations, it outside look about things which it's interesting had earlier Caribbean and it's about from booked product to book is like-for-like which you mean our chatter as year. shorter you what we I yields. is at Puerto But course you think obviously last was think this know it's weigh Rico, more when line time, the year lot this Caribbean add continuing can

Okay, great.

we Yes, conceptual you about know talk issues interesting you Felicia, and do because understand it's that.

we're of this that's and quarter, just also which are in as interested relate to say, where – back own I the know seeing have doing looking really at forecast quite be for we So mentioned a we're you're we're in, time. And we have thought this which strong just on ahead forecasts our to and we're and both our asked how little little just bullish more really a in, year, about own actually at coming markets. what you next third coming we would year, just our you I not own been we're specifically expectations

then I have And Thanks. some housekeeping, Jason. just

and getting was once a than about just we our interest D&A It some might income Just $XX as about was other Silversea we then questions in your for line think look What what higher give XXXX, million parameters also, about of consolidated? way modeling expected. a the can you that? like And lot P&L. been us we've there is is for

sure. Yes,

D&A side, on the the the and So interest and XX. July of can off purchase annualize the interest was $X.XX based is date, side, you which price $X.XX the

So that you can annualize.

for too because it's Silversea to to up that's balance that sheet will books our activities impact side, through D&A the go build early and to on comment need something that onto will be. the D&A On purchase what the we accounting the

come some call, about expectations this and third yields of will costs will and like to year year. in also the the back the quarter that as likely for look will we as some balance look So everybody, in like dialogue what following on well

relates or to really and other this the to gains – that side, our what's expense really other year-over-year driving income ventures a joint line. that's the of On income relate series a difference that few in and

we thing that should one-time Is or a going think about forward? that

I at as mainly quarter. that would look a thing one-time in the

much. you Okay, so great. Thank

You got it.

The come Research. David with Bernstein next Beckel from will question

to sentiment. of wondering Caribbean for in about seeing any hurricane turnaround were with to during the and little But the all evidence of and perception region of of if around Hey, I health just sorry wanting concerns of sentiment then you could the consumer respect question, thanks hesitance maybe think of seen terms about so for the season. and be in the quality bad consumer the Caribbean is that. some fear you about the be Caribbean at have the a in a destinations consumer you another question. another the talk of hurricane to not Are season? This region the the was I

really David, Harry's also for the and planning of we places on back unusual year's hurricane storms, – particularly levels, comes the but think us. Last which I on both about amount was what they exact season particularly would to forward. Yes, that impactful be question looking were went, several that

in simply forward begin an And impact the midst have that we was and ever while expecting have So had also more sentiment. the storms aftermath. immediate talking last were fall where an quite one because for we seem then year reoccur. did we period actually, than did had you're the impact the quickly, But we of really dropped midst consumer it it not to worst had to anticipated. essentially bookings did of the and that recover that It to respect about but the time period bookings of – kind the it the we're to had obviously of we've impact, with that hurricanes on on a

I has the do think be also storms. more it the we that so destinations And think attractive concern impacted us more be there of and -- would be this less would year, both

to period, which more right, impact now seen, of an I did is impact, very do to not it think we'll think I now. it longer that recover, recover, you're think looking have gone, longer, did but it lapping very we think, we much this fall. but but forward that think But largely we take completely much I have it dissipated of as took

I from dig That's bit to curve on want little very second you. your question, And commentary booking in helpful. earlier. my Thank a just

that bit strength sort increase and in obviously the at the agree which this prices of market don't a obviously you with, in maybe Given today, see investors – not investors point? pull why the curve little

constantly practices Well, we to – our our are that our curves. and activity booking and the are work management revenue way relative measuring we

think do around in. I believe harvesting constantly we are think his in. push optimally onto earlier, – as is that harvesting not we demand debated we're should something inventory that books when continue But I that as is in but comments, this are internally. of that said it demand versus it's it that's comes feel we, certain our some that we debate, has Richard So that bringing and to it we more is selling the But optimally coming do of that we perfect, something out categories, especially more

Thank you.

will Research. from with The Shojaian question come next Wolfe Jared

good my for everyone. Thanks question. Hey, morning, taking

Hey, Jared.

seems guidance I pretty you've year growth want as out still next healthy exit going to growth, X.X% as hangover several ask seems called about the are pretty the about like comps fourth quarter times and hurricane easing implying the the from that is demand strong. rate environment into of a yield

but why obviously. yield I'm looking things can't to me know of aware need be guidance, I anything you're there's any give understand prepared sort or we other of something supply not help it the not pertains to stands So year maybe understand the back as similar Silversea you any for should of aware resemble if today And in trying accelerating as it guidance, one-time next of. that any be if some to we can to year had reason necessarily to just just XXXX there's half growth XXXX, maybe that excluding

is about implied than Well in math X.X% but higher mean – I talking would, tells me, that you're first, somewhere little think I least I a ballpark. at the I the it's my

I obviously think of lot a lapping we're QX. noise on that

is QX about, a Europe have think little quite bit China We and doing as well. more we I talked in

in is I our So fourth think confidence underpinning quarter. that stuff the that

as Edge comes lot fourth which quarter. I think the of going in, there's the year latter comes into the tailwinds in a especially of great part

picture. in coming Symphony the then we year more have Spectrum the and into have and We Pursuit

the in the on confidence think growth on a I year yield certainly of we and just books have that in So hardware where underpinning lot first things – that standpoint, a terms of half than there's seeing do in of the are year the the of more we in of half back we're obviously XXXX.

Thank you $X.X up I it. helpful. by guess CapEx, That's Jason, you. took Got know billion. on it just And I

couple billion FX then $X bridge $X.X gap has Silversea I of help like seem should would obviously know should that which purchase, weakened, And the Silversea for think and leaves I which has doesn't was a I the another really it you new billion. builds. still But think.

is driving So that increase? CapEx else what

that and that Perfect numbers – modernization just the investments bit round. Well, $XXX is are into the made investments you like investments, related destinations, investment Yes, there's and on then as there's rounding. money There especially fleet. $X of are million And our builds new on we Technology into. sure. little said, around to really two more then so Sure. These into that order. Great things planning which billion investing That's question. the relates a Silversea. we're balance, Day really

rounding up. over you're So $XX million trip if we

Okay. you much. Great. Thank very

Jared. it, Thank You you. got

Katz next will from The with Morningstar. question be Jaime

pretty commentary the Good on morning. had network. distribution commented you expanding positive The progress and sounded China on in

ahead that where and in process are curious in you you have you guys the that are are guys to key momentum sort maintain taking the steps market? So the I'm what of

Absolutely.

very very more a there and that's destinations for First, fortunate that on like we inventory additional add more want before. sell are in time have products evolve we like year to team that brand, to also been very even Tokyo. which to experienced what and distribution Spectrum focused the longer marquee assets helpful. add that manage diversify then over very excursions shore two consumers period evolve Chinese crews. been I day, area. and they've to been every we strong us of next also do we and assets fly a ports, past more long gives with been of market think is periods quite has a strength that we're that I for ability that And that year in and mean has really team the that being very have we've we more continue obviously more strong on when we has of the able and that that we continue ground or example, to successful the getting to sail And That And want weren't for time and to also more able to to

for think enviable I consumer think, combined of appreciates China kind very, brand the said, so So year the as and while again, we're I outlook of still in bookings has positive. terms assets in put how that far us they're all in early this appreciates that's XXXX, on on and really coming those out I going our things well that played a has quite and seeing a position – has in us for been the

better I expecting what third on quarter at end we is guess And fourth the Okay. of quarter Silversea, have we'll then the that be should guidance...

Yes.

capacity ...with release than higher and currently Silversea costs higher the press so it, today. implied in what embedded higher is yields, growth in

That's right. that's exactly Yes, right.

We will.

got You it.

Thank you.

with question The be UBS. will Farley Robin from next

Great, thanks.

be it would looks On it of a wide increase, of (XX:XX) full ask, from is sort sounded year sort be the last going left the range. the the a always but to like was math it that so X% quarter I anywhere X% guidance, just by to could QX implied

like of midpoint the X% range. of kind you're thinking sounds it more like so the And to X% that, maybe

And EPS entirely guidance, Just to in Silversea yield higher is guidance guidance in anything from just wanted then your your yield that. also is mentioned higher this from the now expense clarify, is or you've interest but clarify wanted Silversea to operations? the existing

Okay, yes.

bit obviously X.X% not way that point to a QX I was we it on in X% way. any mean time. though just any commenting it's the side, will the off would guide my was in So I I little math, when being

relates it thing there only relates the is interest is in Silversea, is to that Now, guidance Silversea in our – it the $X.XX earnings to expense. as as from impact

improve that product do that full it's very a we it's is also certainly fourth elevate a nothing that's remarks, nothing our impact that's in in for earnings metrics. will there is to as will in our our in is our negative yields going yields there to a is as – the expect I my the There our our So quarter our year cost, yield, this be nothing in earnings, guide. into yielding said high in and incorporated but our

and into we course how of add there's more – as – do nothing to what are. that provide So read terms things, in transparency impacts those I that's typically would those will we of we

Great.

the So from half all yields pre-Silversea? core Caribbean today second Royal is in increase standalone

contemplated numbers. of in is There any Silversea XXX%. those zero

happening what's of some that's there mentioned with the also of some up source would yield-driven more the performance. of just Great. You Thank sort guidance the of were the raise called because and just that by at gone things, with has but than that also demand midpoint there EPS the Is Then you you JV the TUI European well? yield as performance for looking out clarification. suggest, brand? gains, your so the

Yeah.

equity numbers, products. So what's guidance, outperformance line. and and driving those TUI TUI total European in equity Pullmantur or so is But or are the is those the not sourced very doing our side, And pick-up – into guidance on the doing consolidated very our course TUI it's the are of below yield side well. in cost nationalistic

mainly the European So commented to is we're cruise very I to the with strength happy consumer also continuing having inventory. as and consumer compete that with how show also American and they're for for broader on they're our North business, performing

like questions sourcing are on European specific product versus... new of that Can than front you is that German even in they terms product how of know a what's things increasing of there makes to seems same about just I I the like your driven breath the you and kind are it then ships sourcing. but are of don't in Royal this been talk their that nationalist as by terms that. some European going difference if And them then Caribbean for I have very Europe final – so capacity clarification market the to in year, other you in different think know Europe Thanks. look passenger of specific have capacity much of in next in about

lots that But it mean certainly that Yes, or was have I in day-to-day nationalistic markets I or Caribbean do don't basis. lines out. a how are versus cruise Celebrity do of impact and terms said of you well-said. non-nationalistic. broken can not There trades Azamara really We help what Royal on

nationalistic We the is Caribbean the for think players. reality has with found Royal – or industry the that major us many Celebrity growth are obviously that happy consideration of very niche doing, a that a in that not is is there itself. Cruises TUI right. that's the how on does very that's lot great impact But or not There's exactly I of supply really for or well product really on passenger a vice a that TUI there focused, Cruises the but versa. sails is It's

that, say, just the now of part good some reason the so when that about are comparable, of growing look is, have. really of within and XXXX, as think within XXXX I that is Robin, of while growth because feeling that products we And we corollary Europe to and the you at not lot we that unusual is take some a

everything category doing of we in week, going started this well. will essentially the year in comes of and Celebrity Symphony So And of a new just for extremely ship which next this just a now is XX but the full brilliantly a performing the that's get end just and else. Edge homerun. year is it Seas, we actually have year which at months Azamara very different working Pursuit, is

are though we than part a of simple is more supply/demand. that some or also even from the significantly, non-comparable are growth is the normal unique positives Pullmantur German think as but is you total the factors, negative I us two growing the passenger, have of say, kind that So side, driving there

much. you very Okay, great. Thank

Thanks, Robin.

next The come with Wedbush Securities. question Hardiman will James from

my Hi, Thanks taking good morning. call. for

of you on little different not most Silversea, bit On clarifications. that's been you So mix ready talk everything my about else. Maybe magnitude number, just side, your a to assuming the maybe year, guide geographic questions then guide on the to answered. that benefit mix next about impact, don't but much but a have of if pretty yield income the fleet. I'm we're meaningfully talk the obviously And than other to existing couple

I timing after the So ultimately, did in you change I know increase for guess guess, income other for XQ. at if third I big half timing, was get I to the in massive obviously any embedded quarter basically your there back was any all, a in year. full flat shifts were income. guidance a in costs. line don't shifts if And there income what's didn't know that there I timing other big other

Sure.

about and come and mix though guests obviously probably Silversea, there's advantage to the a our and will Silversea this up regulatory on I today markets which do call. in of that we able have I be one, Caribbean more that in process we closed and They take a mean relates terms from, not walls it certainly to to So next from similar more the talk mean their where come Azamara during the days on – guests so as few even source few prepared obviously of. Royal be where will Celebrity we're ago are Chinese from a

the have But a different of destinations we deployment and to course XXX to mix. goes they about X,XXX. standpoint, on So similar today go Silversea over

very different which a going destinations, is of to product different very about now. them excited part the it very we're having family So

expectations better and other back half had helping little the in year. are currency to them in the the the they not to were what's guidance of revenue those the relates of than Really we and in be it half bit increases. expecting and raising expense, is and fuel we They improvement year expected contemplated the quarter. offset back mainly income the a were As

some how question, into but typically hurricanes whether this or learnings based anything factor you that season a impact that you're is a just hurricane when And but hurricane of it it. going overcome similarly you last you on season, season you've would might do were be going perception seems head like during Got know there's for into awful be what any I me, you guess major it's hurricane of that if lastly that learn fighting? weird if forward. different, to then taken. hurdle see operationally the year's you I the did any maybe every less Obviously sort steps change year's to year, incremental didn't would some we this

whether of things the bad. every That's always about from or business our So, it's we experience, learn. well, one fun learn we is good

built handled that had, the view, being from way outcome probably last financial if purely a the our exactly on impactful. and not and that our year was hurricane exactly learned that we I days and fair of hit the ports response I'm from ended a felt of most good calls amount point they really the be again, you would up it, of sure think goodwill would ships' much up we that we the significantly itinerary actually quite tracked a change

destinations reporting pretty us they've there constantly I an I and chatter, think they bit a think people which responded year back a as did simply destinations experience been obviously for well events these of they went travel had impressed the that learn now are and that may that well. the try do how case. to bad well afterwards, be source we some with assuaging the terms the people agents, that are shows were in concern of should we if little These recovered. and last information And felt learned. how horrific Internet to some always that are people hasn't I we encounter be But though, important them, as of So always well that and afterwards. overall think, but help lessons would

it's lining, the that recover that better understand silver a more is would there if islands think quickly. do I So people

that because didn't really a if than want have other itself. see On another the would extraordinary other terrible have and year anything repeat probably you so that negative we hand, we so to season, simply had what wouldn't was last

who them lot up as because all taken to on to Rico get Caribbean by out said, and and the perception, that than the that broader using in certainly us – tough there was on that one were day a of Puerto how just to of add we're more and it because lot fare Caribbean want hotels of remarkable the Yes Air issues it's is painful in it every everybody all Richard because has I were think recovered little been so and James, people some were it and been it's has forth, a the was well residence. Eastern focus I storms everything mean remarkable island, going and and that's to there here was on more With on bit the talking and it whether a whether logistical impact margins the impact, challenging of dollar the the impact really or kind is but pretty I Caribbean. small the was on and how restored. all the that really broader is the

terms shore-based of By employees amazing our outstanding the a did, comment an was. the way, response just The thing one of and chance but to it wasn't crew, many us, it responding actually job. gives the me demonstrated people in how that that reinforced it news did to which really to the of because

thank a me gives say you question them. to your a chance So to

Yes.

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

final Yes, Badishkanian will so Citi. come the question with from Greg

Great, thank you.

to So greater I related the understand rate. in book adjustment you Richard, make adjustment because seemed XXXX, a to adjustment said. it's what you would you XXXX that of of make cabin terms There to greater a were you to which need in the booked percent greater sounds what gave mix. for should you comments. color you higher gave, was to I booking higher believe mix for than like adjustment like to factors booked make in of it positive on in at mix, color rate. you're type better that – a percentage regional XXXX basically And then almost also you cabin percent The later. where those just and at regional some more Seemed have positive to that bookings that. markets be It would – two be just that

be to why can one down wrong XXXX. you first to specific examples on path. gave of much great, lead were relying intended two so, examples I a metric this They were not Yes, the just all, too

Januaries it the have both I booked may I I've fact, it much because management was from this in of told thought coming In didn't recall, us we I of year rise levels two in we bookings record at said the in thing. revenue our expect just that yet strategic too did view a and if advance were to that right of environment models rise you thought point last and then and in

our coming talking expect, ongoing be do we and didn't those mean I basis. choice take or managers to that's that constant we back that's that of inventory judgment on a an our because give back it And XXXX. the first a to what of more related terms about make revenue less In as and hold two, the of making to

a The other one you though, for XXXX. factor is and it's mentioned interesting it,

For one example, terms outlook. later factor and, positive you're bookings more right, an book actually expect we would – short-term in of our which to be have more would would even that do therefore,

year your be expect given later. things than other So short-term being capacity, you equal, less to books short-term last bookings because would more

But make itself, about why to year. be but that of by trying despite I cornucopia even next want factor as think, was the single one do kind I examples so give And metric could the information reasons available there. that forecasts message I that of read, fact looked that's we of more we are shouldn't emphasize, at the booked a be appropriately to of positive our as more the as to us

or so comparisons little the a should color nervous have people be out differ maybe easier been us XXXX, how that's quarter the the That's wrong maybe that say it helpful. could Okay. (XX:XX). metric down maybe and first if use a at arguably worse you maybe direction, I'm we I haven't it, you bit if does on then but volume, differentiate actually could lead booking but give that to about point, this And because price that's from the you full winter year for – look you Caribbean can of of about to how the –

much I our but I say of on the on Yes, year in full won't too detail the first quarter relates very much into go well. seeing as what commentary we're quarter, XXXX that the will to

Right.

Okay. Good.

Great.

Okay. Carola we might thank any and a you follow-ups for all you be for and assistance you your all today, have participation Thea, day. in we the your Thank very company. interest you will of for available and wish great

for you participating Ladies today's call. conference and in gentlemen, thank

You may now disconnect.