Royal Caribbean Cruises (RCL) 3 Nov 222022 Q3 Earnings call transcript

Good morning and welcome to the Royal Caribbean Group Third Quarter 2022 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Michael McCarthy, Vice President, Investor Relations.

Good morning, everyone, and thank you for joining us today for our third quarter 2022 business update conference call.

Joining me here in Miami are Jason Liberty, our Chief Executive Officer; Naftali Holtz, our Chief Financial Officer; and Michael Bayley, President and CEO of Royal Caribbean International.

Before we get started, I'd like to note that we will be making forward-looking statements during this call. on uncertainties. expectations based to are are and risks statements management's and current subject These of could number our A factors current materially to expectations. from differ cause actual results well release Please our of these SEC issued as description our this for refer a filings earnings morning to factors. the with as as do We statements undertake update to change. not forward-looking any circumstances on on we be discussing non-GAAP are earnings and defined, as of at will certain all which www.rclinvestor.com. and Also, a can items our release available found be adjusted our non-GAAP financial website reconciliation measures, Jason will by providing overview strategic the a on business. begin the call and update Naftali will latest results actions recap environment. our our and the on second current booking follow quarter with a and on an update of

start our We highlighting this open will for program. Trifecta your then call call will and the video the introducing we Presentation] questions. [Video with first, But

Thank you, morning, and Michael, everyone. good

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we equally guest to distributed brand to cruise, and across result our XXXX. the in new for what to similar was a loyalty, saw mix As quarter new

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markets, than a consumer looking and unique guests This day. amazing a of delivered what point see we are and provides products, seek have XXX,XXX and continue demographics, and experiences. quarter guests positioning This we engaged dream every on globally vacation hunger variety across psychographics household ships The to of million a at their $XXX,XXX. across for X.X brands our median above brands attracts our experiences. healthy, a a on guests behaviors. financially highly vantage And strong Overall to us with vacation income our sailing broad we more

booking seeing channels our dream elevated is apparatus activity help vacations. design we commercial as their across Our customers

before more This us those APD Consumers an related with set willing onboard they about even engaging led planning are X-point levels. memories. XXXX to create has purchases versus their penetration to ever in much pre-cruise to revenue with XX% guests are and in higher sail. experiences vacation, earlier increase than the to purchasing Our spend

rich strong offer Our seek the more spending All guests experiences onboard significantly this compared activity. nearly to categories. we across into all continue our XXXX is ships translating to booking

in strong quarter close the saw accelerating both sailings in for During third sailings for demand we and XXXX. demand

more talk ships are Next, a let little our to me join the that about year. planned fleet next new bit

superior It well Seas, late delivered of the was to of will and is details eight opened week accretive to metrics. vacation will and the us ago, market the a factors nothing of allow onboard which of experiences. be and January of and experience a response of will innovative everyone continue can ultimate distinct short where our in sale The its for our and as an significantly game financial to its ahead stateroom of experience first Two weeks revealed version key amazing yields ago, changing our The margins. new ships itself, deliver Icon remarkable. overall about kind the Our will XXXX and be destination to with differentiate on their ship debut. XXXX we experiences offering new vacation. as configuration amazing the allow accretive ship's portfolio, ship will Icon have be to array a load packed neighborhoods, each in for

guests raise On we the even previous the the each booking for ship, and day while With know new bar overall, bookings, and single-day far wasn't of the love. our the industry first we and close. record in travel our surpassed what company brand enhancing it

Icon, the energy late of world. cruise larger further its will Oklahoma, from capacity markets drive be Texas, coming ships fleet fourth us expands entire terminal first a we and onsite to terminal summer. with Oasis Galveston, in the the southeast ability zero Nova cruise In energy the Texas. Silversea terminal the significantly solar region, will be in days, Class The addition will of the In XXXX panels the attractive the The and open accommodate first in join terminal Silver into [indiscernible] new region. new Celebrity the and to quarter facility fleet the join also needed in and to to will brand facility generate XXX% our will flagship the access in of the give

is normal While our XXXX planning we for shaping be are to a business. typical the cycle, to strong year up return early still in and a company

or across on which dispositions. will join net Our of overall fleet during this XX% our capacity joined have compared period to will the new grow XX XXXX, account of brands ships

to in XX% compared distance deployment across single About high U.S. in a markets Internationals, by of our almost XX% XXXX from driving XXXX. we XX% XX% deployment have to XX% digits sailing experience half Almost home just Caribbean compared over Asia the and in of with guests Perfect to unchanged in will product Caribbean population at deployment, low XXXX. China the yielding Europe no of overall upsides with Day within representing Caribbean on short planned and Royal relatively Our market. itineraries CocoCay is at XXXX, port up Caribbean is the the

as sourcing we guest strong almost America see customer. from demand to from We that of North continue XX% expect to come XXXX particularly

strong model brands sourcing partially global dollar. and to guests the mitigate allow attract the from nimble yielding Our highest appeal us the and impact

resulting volumes past occupancy few targets, the pace we in the twice While has many been in months acceleration XXXX QX, higher demand a as than bookings the same for did most XXXX during remain period notable as in QX, sails. XXXX booking on for strong over achieve for sailings. substantial change bookings We considerably received and XXXX sailings in to

ranges all well every As XXXX record booked historical accelerating bookings are prices, quarters of four at a with result, week. within

The and resiliency and years back be our three were fully quickly running. allowed last certainly the recover While up business to challenging. us of

the platform and has best ships is best best operating people. it than been brands, with Our larger ever and stronger

remains demand, alternatives we of capabilities both to vacation we have addressable grow an reach planned proposition customers. to us allow gap The our commercial more strategically other our new land opportunity are itineraries quality cruise incredibly value and and as to to attractive appeal loyal market. and cruising the to to close Our

We we in record expect out to XXXX. continue XXXX EBITDA yield close adjusted to a for as us to and deliver accelerate business the set strong foundation and

success formula for Our remains unchanged.

reach our Naftali. bright. to it financial to With as moderate I'm to Caribbean proven over as strategies, I recovery enhanced cost financial future Trifecta the platform is demonstrated and and our ability lead strong have as in of seek profitability well The superior moderate yield in balance Group the records. performance turn sheet. new and growth, we to trajectory Naf? will the and program strong on confident that, we controls our With the improve growth deliver capacity As Royal past,

morning, Thank Good everyone. you, Jason.

we million. morning share This Let a of high-end EBITDA me quarter. or range. reported begin $X by the our of $X.XX results for and million above shy per adjusted of was was $XX net $XXX Total discussing revenue the billion guidance profit third approximately just our

this levels just record demand Third XXXX and varied was to management. averaging financial and better up especially summer in We was compared August to Europe successful has Both with completed total us return result third XX XXX%. than generating outperformance recovering health the the redemption, positioned revenue up performance XX%. about to currency close itinerary demand continued Also, quarter record passenger third X% and onboard FCC under after XXX, in consistent higher of close the onboard peak protocols, our at as outperformance Strong cruise as our of per quarter load Alaska continued lower at factor finished revenue day Caribbean to priced brands average our our by factors and and as a for earlier and mitigated with expected, constant expected a experiences, of Alaska to XX% revenue brands strength negative of load beyond. at quarter sailings. well XXXX. the sailings on factors towards impact easing the vacation from of and operations for strong ramp cost Europe The

With pricing. maximize complete, full has always as recovery point been of up ramp our record optimize occupancy we our goal revenue to almost yields Our yields. we the are XXXX nearing and our to

improvement currency Our improved in quarter. similar a cost by quarter, third yield in the X% the and fourth and we expect

we in expect to late factors ramping continue historical as yields first load to half in XXXX We up of spring. return the

not do are quarter-over-quarter. the been fourth expectations I period. up, as quarter plan we fourth about factors million than quarter load continuing load third Next, factor We third factors a family quarter. to load we over This and year comment XX.X peak the Historically, on travel. always during with our will have the to overall operate due higher occupancy expect upcoming APCDs capacity the ramp quarter, to in to summer decline close

factors break and Let quarter load expectations a down little fourth me capacity more.

a in to the our two-thirds winter transitioned result, During North our ships quarter, as America. of and their itineraries capacity is

capacity late Australia Europe, between remaining split voyages. mostly and Our season is repositioning

slightly We sailings, sailings continue to expect with sell of on about which are quarter. the lower to just Europe factors for occupancies Caribbean triple-digit late load season XX% a capacity

the result factors to Australia in and expect first to We time XXs. to three as are returning years, load a for the to build low mid in

expect XXXX. return late overall to by We to occupancy of level historical spring

was deposit about quarter the customer XXX than billion, $X.X end Our is of XXXX. XX, million the our third as balance balance of which September in higher at

as volumes. levels. In the to deposits a million year, versus The this of fleet In the related stronger and we total balance QX and are and our end APDs costs impact As net typical fourth end to XX% of see by we other included year Future is is crew by to nearing our new fuel XX% be per now continue this for to decrease about was to customer currency the costs of constant FCCs Less year. as up, related smaller in returning our expect Cruise balance X% 'XX. we improved expect transitory deposit deposit ramping our full as the transitory businesses $X.XX protocols XXXX, we XX% cruise to smaller staffing seasonality ramp sailing FCCs. that and QX. to around adapting second occupancies compared world, fleet in credit impact full help Similar the is also to cruise expect quarter, service customer the that significantly and are than declined more we Guests to in APCD costs inflationary of quarter food still Shifting the with XXX between occupancy previously customer of were XX% continue are protocols, and us of excluding costs, in quarter reported one-time related have per fuel relate about to redemptions. seasonal for the and shared, them booking costs and but next third bookings over up. Net to quarter manage legging actively to we costs We APCD we to full levels ease. pressures mainly costs. the

demonstrate experiences ability mission while are delivering the manage to pressures, teams to focused staying guests. Our continue that by cost on of our the vacation our incredible expected

fact, scores. to about benchmarks increases through In consistently able we the year-to-date, while categories, have achieving third high various across all abate of as we consistently NPS a observed been market

well to XXXX. as We both enter inflationary will mitigation we as as continue strategies focus cycle, monitor on the

but coming Regarding fuel, earlier rates off fuel volatile. we still of the seen the have year, in highs are they

expense. have and fuel of volatility to the cost partially us improve hedged consumption which continue rate, mitigate We is and helping the

in consumption APCD fuel the and compared higher the costs. points and for to expected fourth of protocols XXXX. XX% related in be NCC are fourth includes per transitory hedge basis, quarter constant the percentage returning few operations quarter XX% to low to expenses to excluding today, digits on currency quarter of is to and crew This the supporting related to is fuel Lower of ramp easing ships As fourth mid-single a up by improvement hedge XXXX. and of protocols health operations. costs for

to fourth actions to XXXX. In expect ramp and and the quarter up margins to improve addition, we during the from benefits taken into continue materialize, pandemic them into

half weigh liquidity. expect of actions ended our we to to cost mitigate sheet, pressures, our Shifting the these in XX. with balance continue expect billion to through we the to on $X.X inflationary partially the quarter first We

free Our expanding liquidity position margins we our flow. on remains to strong and and further focused are EBITDA enhance cash

Our return ultimate sheet grade to profile. is the an investment goal to balance

by early and of During maturities. maturities XXXX proactive remaining actions billion commitment. notes the refinance of refinance that a XXXX XX August XX $X.X Morgan to $X.XX maturities we quarter, to previously issued and were third took billion Stanley we of billion backstopped Since address $X.X unsecured multiple

for XXXX. upsize were a that we loan well it extend term improve also year We million was received XXX to term million mature All by transactions these investors loan the to and XXX extended in been pricing. able have and commitment a scheduled one and to

Our to access capital investors. strong, our and remains execution with and performance our resonate

or early While rates down were we have to earlier are included refinancings than in allow redemption higher to for able what we maturity. year, to the prior issue pay features

of For to and generated which cash from amortization, XXXX, hand with cash down billion debt scheduled our expect ECA are $X.X operations. on debt we up made pay maturities flow predominantly

turning to guidance. Now

fourth and million The rates, brands, adjusted expect amazing interest rates, focused and strong of to based EBITDA XX, $X.XX. building fuel the share total 'XX. loss as XXX per XXX our in adjusted of revenue, position generate we experiences rates well million to approximately exchange of quarter on $X.XX billion currency on to for demand For quality current and combination $X.X and of

expect We on highlight moment a load first profile late changes the 'XX yields up want continue and cost in return based in to half base. certain historical our to take of yield our factors to spring. ramping to I by

several divested ships brands, the Azamara as as across the Pullmantur last years, several well other fleet. Over and we small the

but have net not short our In China 'XX an reduction Caribbean in increase profitability. addition, deployment slight we any is a and yield, for The product. we did overall effect planned increased have in

but profile, of brands additions compared and overall to per 'XX Silversea These Celebrity add expected for cost being percentage yield have to and those higher mix additions berth. in our also as return result are XXXX. in ship to New a our larger

more sourced exchange to revenue in a years. with prior in down versus just for XX% With rates, reduces are foreign over exchange itineraries Our non-USD average on XXXX. versus shift X% expected American to rates North said, be of a about currencies our basket of currencies that exposure our quarter to

We are about Trifecta excited program. very the of introduction the

demonstrated on before, with ships our proven should XXXX, capacity our grow an basis we and new By to to by is markets. once introduction our brands across X% XX strong result in performance. As formula the of compared XXXX financial again expected annual

We result of more NCC X% capital expect benefit operating yield drive costs. profitability X% in down $XXX 'XX. and change excluding yield per of will to every our relentless to triple-digit an Increasing fuel as will triple in in in digits million on new us in customer flow Every ships and additional the to $XX disciplined as investment benefits, will APCD XXXX in million and efficiencies revenue, cost pay least allocation sheet of strong return result focus improvement at and grade by EBITDA growing with balance together per debt in EBITDA and allow cash APCD profile. generate well to

our on stay to will by on expanding executing sheet. We strategy and the improving strong margins, achieve results focused growing balance financial yields,

We have done it before.

we brands, Group. We open ask the and best of our call future will people brighter have to Royal the best Caribbean a the operator build that, I With as the the assets best for Q&A.

Your with line Instructions] open. Steven, [Operator the Wieczynski your Steve line question Stifel. is from first of is

good guys, morning. Hey, Yes.

when quarter. Jason, I you like when it say I nice So, know

out of nice and I'll get So go and that the say quarter. ahead way

it say time, didn't You Steve. last

would point? status. like with what I guess into return coverage EBITDA rating back are not kind your it I investment interested you X if mean does conversations about if way, 'XX, what’s guys like in I know, you embedding if to to that grade. guess, here, point is leverage going that Trifecta from like think is so and more had do most going that the the at leverage or is profile agencies But interest I'm it look grade I a as forgot. to perspective And to around, of of that the number I higher, about have mean, Saying to you another say about investment math look at a Xx what in get yet let's by program, your billion is what this we this be

Hey, Steve. morning. good Naf. Its

where our excited grow And to focused us very we we continue generate deleverage So grow cash before, by Xx we coordinates And going sheet, with grade which you math be you're their your unsecured if and us, Trifecta in some first And And will agencies, sheet, rating help to help both an in around EBITDA, as was XXXX, much but well. investment think on leverage. of as were, any for. we topic those that means difference in there ratings, And also you've our been that coordinates balance capital all, as versus and with of for goal done, remember the allocation, that's the flow. we're been around, sheet what balance how conversations and about is looking debt. addition the yes, gave very of we're are indication being having to balance pre-pandemic. paying an We’ve we're hasn't the of down it. with kind was

thinking and Okay, about, what yield you in wondering what spend get the even get forward, are that And going start like, Are guess I the forward? about patterns great. this Naf. trying yields growth, consumer down and you if at here moderate stay you ticket looks Or to at Thanks you breaking strong down? embedding what terms onboard? of how moderate is, can yield you to is, side do I'm slow forward moving point? I that growth then, what kind does I'm for between onboard still consumer call think that moving you guess that guys of when And onboard think

money experiences and well which versus for in those there's the venues more of as as And obviously, mix at Yes, able the we onboard has outsides been insides, services mix grow We've been side, our also terms new and like-for-like on our ships for we over able Steve. different When as on as spend have a helpful take us inventory they'll our we've to look time, things been great ships, yields. on. grow to better onboard. to question, speeds guests, inventory have

about average, on So when a typically as X% yield growth, we about it's low we think think we I side, to in the single past, cost digits. on think to it X% the said it's flat moderate year. And

is we be see and to looking not as to us as -- able grows. business able the times the think perfect, to going that continuing What that's the this and is be we to going how at said been we've should we which do if, our our business we that environment this I've in consumer manage accelerating. have So as We're I be to my And is know perfect. done in scale, be in you'll might in that grab that. market remarks way, operating

this And in just well of is we XXXX. not that's a back past sometimes period bit on highs of choppy. getting when getting at over And back, why time X-year market this accelerating looked us X.X, little our kind

in And might records, of one XXXX quick confusion off think talk going an EBITDA or out different about And out I that question. in housekeeping there. X.X can I is EBITDA ask about, thought there's real processes you when be billion I 'XX, there billion? guess base there some X.X

Yes. X.X. It's the former

guys. X.X, Thanks, Appreciate okay. it.

going vacuuming, the question, I you're thought me I to about on Steve, guess. housekeeping ask

UBS. next of Robin line Farley the ahead. Please go is Your from with question

Yes. Thanks. Great.

or how how for from down basis just a if tracking? that of mentioned sort XXXX terms is go to levels you up of compares I percentage of it's on ballpark price there. a 'XX. knowing record in price that it But You give at could could that wonder

to the yields it we've this the early think forth think we year. you still about provide would costs is past, talked I kind program and from how it's early, next Robin, how But kind Trifecta for so of of about and for Well, guidance. know, be us

use as still book a call. of February January principally what tool. is while coordinates -- of accelerating or providing business, early, be with will it But guiding come those still that's early we very it. So there's we're exactly it's would and what the comfortable building I -- happy We're we're more kind have

question. to going probably you're Then next my Okay. love

Robin. question, I love that

some Is X% follow a maybe have one-time what don't we're of about sort anymore, protocols at was just 'XX. sort up that you ramp expense of of to like expenses similar the X% to that expenses, looking the and meaning the about increase in of

your where And get you're being 'XX, maybe in of that versus of one-time lower, those we to about uploaded actually excluding greater scale fuel efficient better being fuel being which ships? perpetual expense, than if when it's all lower And and is but some so, just your was not sails, just it more QX, ramp the mid-single given and this cost, expense is 'XX, think point that 'XX? in cruise potentially better some your you down costs, forecast talking and could in like

Yes.

lagging one-time But into I'll in in And, as think we're going is what increase again, this here. think, in providing formula, to still all the we costs was how think not is, we I back Jason So early And, to do expect saying, of, we Trifecta profitability. we're fourth as cycle. those guidance which follow that terms them our quarter. how our be we year, things planning this obviously, we about it, incur we about said,

working We're that see hard impact the margins of to to it. And, and are of we to really continue business. making the sure the increase mitigate inflation. We continuing

cruise and time. And of we I that growth. the that's mean of now I've to past, capacity we've And, just the should this, in inflation. the lot certainly look us over getting And a increase done is into we taken of lot, products. of our we a capacity of in heavier Celebrity course, those net are which the a be in of terms capacity a lot XX% action able higher Silversea, have some described taking efficient here, weight same leans during in of more But the increase, course, cost Robin, towards to appreciate vein, that get add, mix coming lot been a at we wedding as much helping have of, combat course we as a when

can think go So success for about as we XXXX. of that formula that kind into we

great. very Okay, much. Thanks

Cleveland with Research is question next Vince Please from Company. Your ahead. go the of Ciepiel line

Thanks my question. taking Great. for

near First, a term bit focus. little more

on at looks And by in as of well thoughts more your like of this your XQ what's occupancy biggest for of the to implied curious, contributor think progress second marketing? occupancy XQ, outperformance? your what's kind shifts, half the teens low that of recovery strength do year. the peers you're as Looking is driving percentage that? it is geography, outperforming Is a mix you in What almost brands,

returned quickly. I ships very Yes. in some like things inside strong in for speak But you I brands, happening our resulted ships, competitors, do that our at I we think business. I Perfect what's of has of CocoCay Well, the think think business. leading really their of out our can't for acceleration terms obviously, there that we Day laid assets, having an leading brands, us,

While demand in what loyal QX less what brands, ran. season that's the everything we shoulder time. load to intent mindful on see cruise, return, typically is which new mean, into rates you about been of we which price, for season, course, very we're could action do. looking But or know, a the factors certainly in normalized have the moving shoulder price because and lower are factors be to is also why are of higher the integrity, see first load we lot not as about if wanted we has of more has we're of QX, no take we talked in I period and to guests to our in terms And QX,

it's we would And business over book quality so as in building do time, a enter regular a now year. as we way a XXXX normal up just

you versus then and Great. gap longer thinking term, base. Thanks. pricing opportunity land of And ahead value the

on been industry of so some that which of makes COVID, existed gap gap Some for even the given pre-COVID. pause long, was but has sense that through exacerbated

curious in I'm to that better more it few product close to how kind of you improved is gap? the the have So last meet to awareness marketing the guys need? product the raise years help Or just consumers

to business. quietly a honestly the say, and I've are with sitting and delighted such waiting I gave pleased can excited somebody me extremely you the what direction of great Obviously, here Vince, we been question. the just ask question. for

you, and to of we're children neighborhoods, shoulder-to-shoulder under older all and future get and now with a kind for And the that the just we and is because family parents Perfect pre-k pull we're not of of target Icon I accommodations Day And have round, and really the introduction six families family earlier, been the Jason I on had bookings Seas surprised the in from obviously, Icon, really the experiences mean, with and were can many the phenomenal. kinds have the travel first this product absolutely squarely have is Day, what year actual that the course, commented what of where I'm expectations, high neighborhood kind for think, weeks in for brand singles, the us. even of as results presence results out and American us the and Icon which families, class accelerating. for for That the hardware, activity with Obviously, into that first absolutely kind of going stats we the seeing combined is trouble. brand phenomenal. Icon that Icon which and destinations, a beginning and 'XX, to product Caribbean, and and with kids that into of plans squarely of in those is for increasing And we're young market, our of those late and demand may aggressively. offering into the were because ships that standing those The that journey Royal young certainly on the market, the what with week in including with along with I Perfect Icon their certainly private moving couples But give of for space which huge products they scale new which and we Royal really is is we're the a we're taking it's in market Surfside, course, destinations. global first leading of new families, footprint. where many enthusiasm young years a on you. Orlando, And scale. has for strong on is focused brands, focusing the we've experiences more booking and with terms families. and called far see now -- and new is way a new is 'XX, you have

everybody a And else. sitting we're with So maybe it's what I that There's and the a I on a And, Michael on. for the you What on you again, demand with that continued conversation huge actually say me overheard been second plane. Vince, we've the first seen share direction think, told if plane in that of that's you Icon could week. I'm into would week, correct, now amount overheard you and product.

something It's conversations going random of about going on family land traveler our hear share based saying but with from their Icon. agents book Disney bit were little me to behind we was a and stealing a just to they thinking it market the from often

to speaks gains some yes, maybe So there. market share

conversation, of theme. but a part One broader off

to I assume just comments, just to to the the Michael's add with XX% of obviously, our of it Day, says used that. this XX%. brand modernization be everybody But land Yes. Royal The we've to significantly, introduction And that closed gap seen actually very fleet. about Perfect the wanted based gap vacation,

should loyalty gap more frequency from this here And relevant we are so in in our that them close we're I more need lot you're weeks a awareness. And all us, there's offers more that need and our what of think the programs. that gap just how vacation. our further talk improve opportunity we'll to Day closing yield us also And be We our to over we probably that to very the guests. bring and time. front guests in of Investor need about with see one-to-one, hearing coming in, here to increase based just so is We land putting to to individually,

So not motivation to But we're happy for great go after. about that serves gap. as it us

of Best luck. Great.

Vince. Thanks,

Thanks.

Your Please the of Brandt with Montour next line go Barclays. is from question ahead.

a trifecta trends of questions. is terms getting My everybody. protocol of in broader bookings on first my question that morning, speak for how could volume if this you there. on out Thanks post good help, Hey, people it waiting eased And was taking huge you relaxation, or it would bit a a and even from pent up to be through is happen, that if there helpful. for you. could trended accelerate Thank just congratulations sort the it or throughout of sort the broadly adjacent quarter then anything could did you add spike

But in me has in comments. let the before maybe waiting jump protocols. Brandt, for Jason just that change all we were Hey, some

excluded protocols significant brands announcement. of of number But the were was when who of Our terms the we and off, very cetera. market those immediately significant fell quite -- And and we've and our in literally, the the that product was because I think accelerated. that calculation almost people volume people, in our XX already through saw a were that what in the expanded the calculation is continued and of addressable about increase market doing pre protocols on et booking. the we we American from in requirements, these bookings. I And think that to And has volume continued by million coming market that just addressable saw seen well, overnight,

same we're you protocols some they're was months. we're confident There the around in it the the away story positive fall now, all obviously Australian and look where So in market, if there's pretty the still -- operating. going still is step. it's weeks a pretty much but to world, in place, globally, very And coming

seen with very normalized extremely positive. huge customers of amount environment we've really into entered we've the a has a So enthusiasm respond, honestly, been and

add, Yes. of and a of I to what's all coming this, there's because I know, lot forth. so out happened always with want just protocols

very it's the it which what lot the ships. experience want booking as almost think we 'XX. we're as back our is the and see of if and And in But We're into activity -- spending very, I business quarter what important a is like, is healthy. is it's just usual. the psychologically, money is experiencing note we were business stepped to we next course, that accelerating, just to we on 'XX. operating, consumer to similar And of wise, after it's

equal I change Great. yields feel takes, on common just going versus distill XXXX Pullmantur, a That's to it. guys And went a like XXXX, the denominator if here. in need hear. loss for question then is I'm sort and 'XX. have you're general, net But when excellent just it. otherwise But versus know of the does where there, to for out puts up net been down add it second add and we I shift negative CocoCay, mix to Azamara, Got positive the yielding everything a my change guidance or of mix going physics, to a in through PhD North you America, But exit to give higher in all in mix don't it China. for guys to have not I it you up, you would

yields will our that have. are expect is will our we XXXX. we're be there in manage always headwinds, we said be know up are allocation our not I our And structural as better expectation, Our effectively And some going are XXXX. our to we And EBITDA in going to yields costs, capital our managing as going top-line. be on pointed cost there that and and out effectively. we that the our are expectations we're to But headwinds accelerate. expect And

Okay. Thanks, guys.

on I the appreciate asking 'XX wasn't mix Just just comment. but up to if I suggesting focus if -- were do 'XX, mix that versus I versus it your was But the to that what would benchmark? shift wanted take was clarify, or I you 'XX what down versus to just a about. alone not That's to benchmark

Yes.

For forth and for out to the new ships of the sure us. and exit so that combination of nets a positive Azamara

Perfect. Thanks, everyone.

with from Chaiken line Suisse. Please the Your is Credit Ben go ahead. of question next the

first inflationary half of suggesting year? continuation the cost just guys quick a half incremental you next about you of is Hey, the clarification, Just of some mentioned of are that in a how seeing first kind it into are you Is next year. today? the going? trend Or what

Yes. hard right. We pretty environment some complex. a bit is seeing The are actually it's mitigation, little but

seeing is we're So we're today. continuation what seeing what of

especially to now, has to just We're see kind space it, mentioned starting come there. Yes, our not think what commodities, starting in add protein but we're not impacted to seeing those of inflationary to it things are where the costs on so stabilized now is and down. is going the I are that really commodity up

you. Thank Great.

you. Thank

question go Fargo. Wells from with the Please next of is Your Politzer Daniel line ahead.

we morning, commentary my taking everyone for a just I wondering bookings unpack could if more. was good bit the thanks Hey, and questions. little

you highlights you'd it it books as the percent exit this some things for you of year? that typical on out? Europe? And the Caribbean? As what Is call look both XXXX, the of are the also, following what's have across Thanks. Is you year,

sure. Yes,

Board bookings. But That's strength a in the most in yes, So on see the is think trends seeing We booking in of these see any the the somewhere we puts like ahead entered a and the be we what part, bit XX% the year the of Historically, of want XX%, a we change products area. of with of a we've the see more focused curve to the in strength focus where strength in just across bit little Europe, activities. lot little our demand strength and see but mindful in would for as more most seeing between takes We on get the their I China consumer the contracts. terms where Alaska. see lot it Caribbean. seeing the we're Caribbean and over Mediterranean strength into that a most and have these of Typically lot business and don't kind we we in booked related was of business because point year we're of the go Naftali time of We’re there this is year I lot and we're of -- some that would XXXX. the charter of assumed next we comments I for made have made, a

on is of how for more of we turn will to going which And terms have very product. XXXX, not how a closer feel that on into feel very put more But we're booked. with little comfortable bit we short in yield year us product booking to comfortable percent in little position that were positive the but a we're a growth. weigh going So we the in bit a only

so much. Thanks it. Got

Your of next go Wolfe Wightman Fred ahead. with Please the line question from Research. is

that the lagged, and Hey, quarter sort was a morning. Europe comment was There and can of the you the guys, sort But in I breakdown European about Caribbean just into Alaskan, up to us just good occupancy while laggard think and a we know into help of for that plan. that other as next on catches with occupancy or that a Is XQ then figure ultimately that markets? be do going year? that move that the think you the

this Yes, mentioned No, We earlier think think the in I is year, what we -- -- really Hi Fred. the that think just call. happened we prior of in year. and also we a it given phenomena this

we which be quarter a is season have, the don't forward, little it's fourth as I Europe, that in So look we as Europe expect We do really XX% normal. a we is finish to this what lower and in for better occupancy. actually mentioned late we expected did typically expect bit we than

dropped I the acceleration in for better that impacts Fred, that doing the shift that to happen come Europe just had that in think high we But commented announcement that made third yielding and us but from than resulted was very add the didn't And the ramp anticipated your mix up product overall a has not real in. just so and time. when trigger back when quarter And requirement is to U.S. impacted late citizens the spring bookings unfortunately Yes. finally U.S. the and testing until was over in it yields.

Make sense.

it season the that the which about for while. significant pretty I Just came pretty really beginning a whole that bookings a to that also think curveball so Ukrainian had you to when the think for of situation was -- much that add we at

sense. assumption quickly no online China? assumed ‘XX. what just if in then ‘XX targets on for that But the China comes you Make And for China guys back

Trifecta in that in plan, In It's have China XXXX. real considered expect very at this we not there's -- around be actually we no that end point -- minimal assumptions we our our will of time. the before

Okay, thank you.

ahead. Katz from with of line Jaime is question go Please next Caribbean. Your Royal the

from it's Morningstar. Hey, Jamie

Jamie was Hey -- I was I Jaime. getting excited

transitory maybe is control years? next the the have to as out curiously back what of are to and there delineate things few able I over are be you would pruning these First outside best cost opportunity that

think to of a to Well, that being then just and that result more reduce everything, able an the side which is costs. just some continue going And our which lot and sometimes things of chain evolve costs and our is for and opportunity nimble so to ability doing think of on structure. automation some do very also on costs the our I globally opportunity lowering cost improve into our versus more efficiently to inflationary there's lower and in freight out to comes can by can that us things our us locally supply we platform forth also source

it's kind I take you grow scale business we or grow of creating And a guess bit Yes. step also continue and if little the the capacity that as and to back a really the operating leveraging higher leverage.

the So we margin. can expand

point. good Yes,

then, I'm booking maybe at between guys Royal income just Caribbean course. pricing or pattern look Of curious different And any probably about differences you them. bifurcate any you as differences patterns the seeing think power if of status? and sort as different demand you brands, Silversea, Thanks. demographic we are I know is But there are won't there

in who our we to is the that out certainly market is there. in drivable something probably is pre-COVID. to about guests doing think this saw I are further actually definitely and Well, cruise brands think mean which or they that's than trend Yes. vacations surprise you helps Silversea certainly just brands the tend fly obviously we're see that and we eight earlier port see COVID of book three willing Silversea when and are But yielding seeing. booking very us I a to been bookings coming a would example all only into is for mix Well, guests well. now plan we their of guest curve out, much The more the for benefiting not thing starting I higher our Europe the that hours home can six, the seven, have see add is drive you guest currently to their

Thanks.

Thanks, Sure. Jamie.

from question line come Today's Golding go Capital. with ahead. of a Macquarie will Please Paul final

structural quarter. dive Thanks I wanted congrats marketing, on figure unlocking? follow-up? TAM from just a then in and normalize looks so admin to easier to is per the to I trying line. and the acquire outside returning out Thanks. should here of Is much quickly to we addition proportional cheaper selling And levels, this so have it about to customers I'm into if cost sequentially, perspective getting unit? flat it It think a wave relatively marketing

to Yes. No, we that's investment spend last We're market, it always of quarter which be at sales money expect right levels. expect as to channel, but don't and about normal be in think terms -- we we thinking to marketing. we best our earnings and this normalized in said where's the I expect even in which the we generally

related SEO costs And us to have of ability but has go demand -- job that really paid to and I cost know been done point I guys the our generate shows have think up we're you well. I and much quite there's is our one-to-one getting to for And in other activities our marketing efficient that go not spend having dollars in positioning has to that. additional our ways strength demand efficient all brands the in our just follow. do finding teams The to caused very elements the a Yes. great which of think we're to which deployment the which gone or marketing customers, an more inflation up

any and de-leveraging and different relative of for reduction And I thinking order expense carry there carbon amount initiatives, Thanks and I'm thinking efforts some then, color. the priority presumably about mostly to would of those the costs was Trifecta that initiatives? some which if about was of ROIC earnings of Thanks. sort light in your wondering among capital.

wouldn't have I they put in Yes, different them -- priorities.

earnings our leverage the Of and consumption the At to technologies the to footprint. that time, all can ROIC, very course we've reduce reduce interrelated. on we carbon same the down and they're what we be can our employing EBITDA quadrupled margin do

of -- environment what's we best what's how decision-making at is all them. about when the to and for making, best of that we're for make that we the decisions optimizing investors what's for our not and best it's sure the make lens So those look customer,

Thanks.

you. Thank

Great.

a you So great and company. will follow-up. available in everyone for any for a Michael the Thanks wish thank lot. participation day. all you your be interest I

you today's all Thank call. for conference joining

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