Royal Caribbean Cruises (RCL) 29 Oct 242024 Q3 Earnings call transcript

Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Group Third Quarter 2024 Earnings Call. [Operator Instructions]

I would now like to introduce Blake Vanier, Vice President of Investor Relations. Mr. yours. is floor the Vanier,

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

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

of circumstances differ Before started, our are of materially with uncertainties. on morning as based refer do forward-looking management's to from our change. expectations, and description I'd could current as to filings note factors. be these and expectations. we as earnings will factors are Please we forward-looking These to undertake the statements results our number a statements to any actual get not subject this release A risks making for We SEC issued during update well statements like to that this cause call. current

discussing Also, website on Unless as reconciliation otherwise, are and a a adjusted we financial found all adjusted we will constant our are non-GAAP be be measures earnings basis. which metrics release. defined, in can our on all certain of state non-GAAP currency items and investor

of Naftali will overview and business. XXXX. a begin providing with current will environment quarter, third strategic follow updated the a the on Jason outlook for the update call recap booking our our by and

then open will We the call questions. for your

to Jason. pleased over I'm call that, the With turn to

to third quarter results, Royal and quarter the has with good and the Blake, year an This for outlook morning, everyone. exceptional I'm continuing updated exception, you, no been us, third discuss the Thank happening Group. momentum to exciting thrilled all was build. Caribbean at things and incredible our

fourth driven third we the press increased outlook earnings yield full for quarter. an improved for quarter the you the results and better-than-expected our As in by year and release, saw guidance,

earnings year more XX% is up XX%. more to now than be expected Our and by by full yield than

have year, cash allocation. reached milestone while billion support growth track unsecured expanding addition, returning deliver In our a $X.X fully this will to we more financial to flow and that than a and ambitions of are on structure key capital capital

quarter, new During portfolio, private opening the announced Puerto 'XX Silversea's Perfect with in and hotel exciting 'XX of winter our the for expansions Chile, Day in season. we Mexico the XXXX in Antarctica Williams, the destinations also opening incredible X

I goals, Caribbean team of enables want their that results the schedule, of the dedication commitment us results. ahead best are strong financial thank us. to achievement vacation to financial the XX deliver entire months and responsibly for Group Royal and for experiences drive the Trifecta truly financial and just exceptional These our to passion, beginning

best the on With of the our and we and winning private $X.X the market. focused destinations industry-leading global a brands, greater people, fleet vacation innovative share most trillion remain

formula yield to in moderate moderate for growth, and proven plan this capacity grounded strong is our growth capitalize opportunity cost control. Our on success,

are We in Investor upcoming the thrilled during Day year. to of quarter the details next share more first

quarter, impacted get I acknowledge into performance our that to of communities. the storms the I this our Before want local details

Royal the employees thankful South need. relief But in for to efforts we largely those that We are Florida Group Caribbean unaffected. incredibly true our Spirit, were mobilized

Our thoughts those who continue to have been be affected. with

Now discuss on outlook. our and moving to results

key to close-in in demand itineraries, higher exceeded on due strong results of all with our revenue. at quarter onboard prices Third expectations strength our continued coupled

points basis up yields net were As X.X% which above our result, guidance. year-over-year, a was XXX

details about third and timing was adjusted a quarter lower Better in to multiple that guidance. sheet in Naftali will per results resulted elaborate due actions few balance more share than cost and minutes. our revenue, higher earnings

demand higher for onboard itineraries growth our stronger are XX.X%, in is to We revenue. full to expectations into across translating continued pricing increasing year XX.X% yield factors, strong load growth and experiences as

expect now despite XX% last for the of for to an Milton, balance net yield close to the of the fourth year. X.X% strong and of on year, the quarter, increase of of top remain growth Trends we impact X.X% Hurricane

earnings We year. basis EBITDA higher also more and expect that margin expected than at adjusted to margins last $XX.XX points growth, strong is than with earnings XXX share $XX.XX and per

are very shaping the outpacing with XXXX, We is quarter during pleased into up how third for levels XXXX demand bookings with and October.

Our of load growth further the rates, nicely with XXXX. business factors book and us build for in line yield at are prior book we to pricing allowing as higher years optimize

global younger tools, demand coupled consumer Our quality multigenerational nimble successfully model from yielding and us the new segments and attract guests. AI-enabled sourcing and bases brand's allow highest appeal, and with management capture yield our across to sourced

growth, The growth, last success capacity control moderate cost unprecedented our a to strong line drive and yield top for expansion proven flow. continue comparables, bar years high will saw for margin and created moderate growth, growth of yield X substantial and that although cash formula

process, in still anticipate planning earnings to While handle. $XX a the early we very start XXXX with in

growing from favors that for and sentiment with spending. leisure grown a American XX to past categories than ever, continue a pace growth unemployment wage are positive faster has than at lot consumer other our the low macro We than Spend months, spend and with a strong over faster in vacations. driving spend a leisure see categories. customer demand wealthier on households continued travel on most other increasing experiences very environment

XX more months, that by the growing next continue travel other any with research suggests than spending leisure leisure this Our over trend will category.

but cruisers demand specifically attractive high. next active Furthermore, Cruise all now booked value on further for and cruise leisure and majority it intent remains cruise the crews. purchase supporting are remains planning of are travel families Millennials, their an travel. vacation, over-indexing haven't yet, and consumers proposition actively both

destination customers best brands, chips, are vacation leading we and and With experiences and AI-driven exceptional and those deliver responsibly. ships innovative capabilities, differentiated of commercial exciting portfolio the experiences to leading our and excited welcome and our exclusive onboard

is growing, attracting vacation we demographics. market new more into our younger ecosystem, addressable are customers Our and particularly

new cruise In XX% to fact, brand, are to to while this the compared majority our last year year. up time, or same new of at are our the loyalty guests guests either

they booked, onboard than more with engaged are and XX% experiences rates activities into at purchase us onboard higher quickly Notably, sail, than translating buying onboard who revenue pre-cruise spend. purchased onboard APDs, purchases more the AI-driven our only Once board. before quarter make through those in of our Half and spend they channels. was higher double satisfaction to guests third compared and higher on

innovating. deliver been the We preferences. are for demands and us where meet key we that our has evolving experiences vacation differentiator consumer profiles constantly of always A hardware,

serves both This to millennials point quarter, changer and for younger for towards new-to-cruise we Seas, skews incredible important an become that ship product, exceeded quickly has It The the game also for a our guests. onboard prices has revenue. Utopia of short Caribbean expectations has Utopia launched ticket as entry which new brand. demand for and and and been a a well

fourth market agreement incredible we to a to vacation Seas, Icon build to XXXX. of which performance. announced the its the continue class experiences the satisfaction and Following in in will financial the guest Icon Seas expectations and exceed Since response of fleet revolutionized join Royal our has the ship, Star and of icon debut, both anticipation Caribbean our

to be our collection announced X that experiences. our continue we this truly build land-based will exciting destination guests. also incredible initiatives of month, private changing We on game Earlier for

the chill Perfect announcement of ways known Mexico, our that for for, which Caribbean with and the excited Mexico. pumping vibrancy is thrills combine will Day Royal adrenaline of recent incredibly beauty are to We and

located Mexico is perfect Caribbean, to that which to a Perfect both is us and grow area, and guest Day Royal allows also further cruise exceptional have vacation growing [indiscernible]. but It Eastern itinerary. a in only supports than will Caribbean larger half of the their Florida, ambition Coast Gulf large deliver Texas and on day the on has market, and similar in the the brand strategically experiences our consideration, Western every Caribbean including

completion Perfect [indiscernible], of destinations Day our XXXX, opening Mexico XXXX. will in Beach Royal its and Beach Island opening Paradise incredible and join in Club Day XXXX Upon Club Royal include at in Perfect that and private [indiscernible] collection CocoCay

in Antarctica late unique, program, and fly direct create the that guest throughout in enjoy the Chile, XXXX, to Silversea's to their most cruise for guests embarking completion voyage. warm journey personalized is hospitality the on continent, Puerto upon Silversea southernmost developing allowing hotel innovative Silversea's white will Williams, a seamless route world's service

advancing We our Trifecta our remain the Last achieve the and planet sustaining double-digit reduction a quarter, Future in goals, our of XXXX, See and compared This to our original our accelerating energizing financial focus innovation. we further and intensity achieved ahead carbon vision, communities sustainability the of to committed on we year also business. solidifies to commitment now expect one expectation.

As our journey sources. part continue we decarbonize to diversify our business, innovation accelerate fuel to our to of

Celebrity start important Port Xcel Our in completed capable translatic utilizing [ July, ship, of milestones at next newest be week, in Miami transition. are and ] will our all shorepower first Seas, the inaugural our Utopia which energy ship, her crossing methanol BioLNG will using of Icon

proud beginning. is of, this We just have so and to much the be

With winning excel large best respective our from lifetime fleet long-term focused vacations for of shareholder industry-leading the and in who brands each of guests, delivering share the while our focus that most people on segments, and delivering a value. destinations and innovative industry are we their on attractive the travel

Naftali. I that, will Naf? turn call over the with to And

third you, Thank will morning, everyone. good quarter Jason, results. start with and I

guidance itineraries benefits during compared exceeded balance Our of of that by $X.XX. delivered $X.XX from to share revenue taken is of our resulting share outperformance The have our timing quarter favorable in $X.XX better key share performance sheet per multiple well the brands per midpoint team earnings and driven another expectations, we our adjusted as exceptional as per approximately across actions expenses. the

with driven a all especially and driven and stronger hardware mostly We both of net and like-for-like new ships yield X.X%, which finished growth strong was yield growth quarter third itineraries, APDs. key the Alaska by across The by Europe. was

expenses during than compared the given Net increased favorable guidance favorable by the our of price of impact stock more appreciation compensation, X% constant The negative performance the cost currency. cruise is third timing our to that in of share fuel, costs, driven excluding quarter. offset

Adjusted XX% XXX margin EBITDA growth, billion, year. was XX%, points than EBITDA last adjusted and higher year-over-year basis was $X.X

XXXX. increased talk Now about let me our expectations guidance for

with of quarter Milton. another up growth, in We are to to guidance better our XX.X% exceptional and set driven yield also Hurricane is the yield the impact outlook The performance quarter, the have expected the XX.X%. to be in which in yield fourth third includes stronger-than-expected net from increase by year

net be year to Full to excluding X.X% fuel, expected costs. are up costs, cruise to moving X.X%. Now

is market at points of our rates. higher entirely the since given expense and the is Our billion $X.XX for call. prior up guidance, basis stock price the in are by compensation XX% hedged XX increase we stock-based We compared below to earnings year driven fuel and the cost anticipate noncash metric last

$XX.X. guidance to raising are to We adjusted per $XX.XX earnings share

year, the a driven to quarter We're for guidance. and impact by the more color Milton which provide increasing $X.XX than expense. $X.XX and earnings quarter that the on negative I includes our Hurricane stock-based is our more the business want fourth higher little outlook, When by better-than-expected guidance half to from better related excluding remainder third of impact, results. progress performance $X.XX

The Asia plan the Europe XX.X including capacity APCDs Expedition from region. fourth transitioned in of itineraries. their Pacific Now XX% fourth I the ships We and other quarter, to and guidance. their Cruises. Caribbean, our itineraries, our several the now spread will West during be summer have the fourth is repositionings, the across about quarter. XX% about to discuss in of Coast capacity in Many quarter will operate X% In million winter remaining

basis quarter, expected Net XX Hurricane to be which X.X% yields the fourth X.X% includes impact Milton. approximately are to for points up from

proven growth earnings of power and capacity and yield we our growth growth, to cost yield on cash our control focused formula remain flow. As on deliver executing moderate modern normalizes, strong strong

be elevated quarter XX.X% the Net single quarter. cruise would Without and shifting costs, excluding year-over-year the those, costs driven digits. increase in drydock fourth costs to days, noncash The our predominantly stock from in in XX.X%. of expected by up have been higher to costs low fuel, are the compensation third is

approximately shifting expect into to impact quarter stock-based from $X.XX this $X.XX. comp, and all of The we quarter. be third Taking earnings $X.XX per Hurricane quarter includes adjusted to the Milton cost addition to $X.XX in account, from share for the higher

up share while Ray early, as Celebrity benefit and the be which X% will XXXX, another Star a exciting well full third I for as of introduce very Utopia insights in Silver fourth XXXX Xcel shaping the quarter we be in year. capacity as the from quarter of up Now Seas [ and year is to is to still ]. expected

pronounced second quarters new Capacity to is in due dry docks. most deliveries timing ship of the fourth and and

about our We deployment. it are XXXX, growing about of Caribbean X% capacity in will and represent XX%

will of Club X% XXXX, itineraries Alaska our XX% at for will of Beach the Asia in Royal Pacific for Caribbean of about benefit will opening and end account European XXXX which capacity, Paradise itineraries. account the Nassau expect We account Island will XX%. for our

load As Jason years and booked in our higher previous are mentioned, line at with factors APs.

where growth, and strong moderate Our further cost deliver our book strong it delivering position moderate to capacity positions optimize is our yield to we profile on to cash success, exactly be formula yield expansion This and discipline. want margin growth us and flow. for continue

Now moving costs. to

to XXXX, partially still to modernization projects due dry we our existing focus year, we of for costs dry dock In seek compared higher manage as remains have this dock our days XXXX, Our than several expect ships. grow longer to days to to planned margins. but lower

we earnings account, call. proven expect will Overall, earnings formula, handle. all and more with with per a during we this to quarter our share adjusted of details we $XX expect consistent into fourth Taking start disciplined provide cost our growth

ended balance liquidity. $X.X with Turning in billion quarter We to our the sheet.

X And structure. the balance reached milestone key quarter, made progress we last by fully have the significant financial a a Over we strengthening years, in unsecured returning capital this to sheet.

the $X.X points. debt, billion by we XXX basis refinanced During lowering quarter, rates of

mid-year. of excluding the below and XX-month delivered the impact of new on was as X.Xx that a leverage quarter trailing Our ships when third basis were

per us of this million million debt attractive Also quarter, cash transaction and for This a of opportunistically outstanding effectively X.X to price our maturity, at buying average bonds allowed we also back exchanged while shares XXXX shares. $XXX an weighted $XXX address share. convertible

ambitions capital expand metrics. while sheet growth allocation us to support flow cash balance strong our balance further and allows maintaining strong delivering and investment-grade position sheet Our

closing, remain mission. and our our strategy executing we and In committed on focused delivering on

session. With operator question-and-answer that, I open to will ask call a our the for

line will with come the Brandt Barclays. first of Montour Our question from

Congrats solid on another really quarter.

how a you in if can I first exit of and you versus of sort seeing strong And and want yields next And you're pricing kind of pricing and fourth of think inflation, still set think little you're where about year quarter. talk some look act The rate take a -- the thinking just how be? of from cumulatively question sort is as governor level at? about bit inflation you're if you sort a coming trailing broader about that cumulative kind U.S. about down think that? like-for-like the does can Or to do of XXXX sort about

Sure. [indiscernible] as well.

of 'XX fourth about levels. quarter you just to the levels, about kind up whether starting I when think, The it's first, off is XX%. is is compare year XXXX up XX% versus

lot think our Perfect so a of I when business. inside of like-for-like that's that, the It's And not that, normalizing we also just is within assets It's Day, capacity. not things new at which great like growth. just look there's only fully

able And of standpoint, show the while each of there to growth been pricing occupancy the has on bit trends we be day. a continue the pricing standpoint, little growth demand, a to elevate lot on elevate that

we volumes, the willingness to that overall is you trends, see continue what pay more. customer's to the in so And see strong

type an I of this driver. don't is think inflation-related

driver propensity cruise that a significantly think at or of is the is, cruise level. is high I

that now is mainstream vacation value think there's very land-based proposition versus product. to And be cruise a I still the considered experience a vacation. significant

those expectations, destinations expectations. think the our really those business combination for what guests with I the meeting understanding those brands, meeting are So meet our expectations, and ships up leveling the our of looking

see I demand any having continued side. And to allow we of business. we anything, is for the ingredients we're we some If say that seeing see our in the technology hitting anything, any ceiling. leading why way, growth quality tools yield outperformance us [indiscernible] that do in And think, harvest really type demand, to and not, on keep that all

That's a follow-up, that here first intra-quarter, probably then you about a and just talk I you'll announcement exciting Mexico, and super And helpful. that pretty Day on had know Investor Day. quarter Perfect the lot a

I that you And out were level was conflicting wondering into a that capital to sort that for return expect bit gross reports insight to the take. There be helpful. you'd if give was if expectations how of of of some would at investment there us you sort a about the maybe the spend? talk going much could bit of little project, want that little

just off Perfect still CocoCay. the design Day and Mexico. looking in I Obviously, what to sure. a but their Day we experience for Yes, process think we're cost Well, have foundation are of on an with and starting standpoint, in guests Perfect planning for and incredible at spend our willingness

-- port, we'll design what that sizable in I also later the again, all port, in And would at surrounding destinations. returns is the private associated acquire mindful is making you'll for the experience the million. the just on did an guest our see it's port. sure importantly, we're But not we're more all-time $XXX land we're filing It's still very of but We say process. which that focused that significant these But is having very with high. today

Perfect Net Day is our Promoter Score. rated on destination a CocoCay highest

additional ability obviously that destinations. when on And demand are to basically investments And what world, think best brand. international ability pay a we but ultimately from Caribbean the I willing deliver only to vacation demand for our like help to us our So deliver to look capture deliver other just because in markets, that's Caribbean, think that guests financial not guests in we we the the can day to they're I for Royal these great drives know every for greater also that. perfect our returns willing

thing quick to one just Brandt, add.

today, You'll close in and expect see that XXXX. obviously that the of we half first to acquisition, in XX-Q the

be the that quarter. capital in included will our also in next So commentary

of line Wieczynski the from with Our next Steve comes question Stifel.

very another solid quarter. on Congrats

of I but the stages your to and some next just line in thinking moderate what pillars $XX-plus are early me going of guys you that capacity earnings? earnings growth comment. cost that we year, going the in get are $XX handle your company wondering on for I if to know Jason, to you're strong maybe it's are yield think you tell assume moderate how growth, look, control. about XXXX And So about planning

$XX some But is gave based should there year position? mean color with be anything on be as year? side. the from be about else be book we about help thinking any you cost cost good that or I buybacks -- would or buybacks current thinking next would include interest accretive But think next that us we how on to or not your yield maybe share side can anything should us does the plus And about a number? we really

Well, we're I that and Steve, Sure. is company think said well, very line it you our religious about. obviously, something, really

To to need saying $XX costs to would effectively. yield it, have going it's is you on to we're to moderate the, our to get say, -- handle it's really I $XX, you need growth not just us and manage continue a

from great And unsecured getting of leverage back state. the get going couple we're our as to balance to able A been as the of past sheet levels activity course, to interest to to an quarters of pre-COVID, we've well over benefit lot costs. do

I that think So will help drive that.

dividend And when the about buying back does some million able would were think time, in that and shares on being returns, here opportunistically dilutive we've So a us. contemplate about -- to you a we of back mix were say X.X recapture in take had last that to quarter repurchase back when us number, action capital standpoint, obviously, we share but shares. of competitive shares, that not having I course, always to look able buying in which,

something but consideration that early that that in So guide is the it's not is in set -- of handle. $XX the

the Jason, think then can second based guys uplift And you've Perfect maybe from you you. help on achieve might yield to question, back Got going potential Mexico. learned about to able you be us what Okay. Day CocoCay?

for assume I to yield our like just if as look Western on won't yield had we to type impact I Eastern I we itineraries. mean, guess think you trying Western believe impact figure Caribbean same there guys I'm on Caribbean see reason or your start based could at XXXX, CocoCay least that math, is double-digit what that itineraries? mean any a your for to out, uplift of itineraries? your Caribbean about outlook

for. I it onboard get, right. we -- certainly that Well, or say side I a from that you mean see of on uplift a the I we piece pointed we which is what the is to there's an lot revenue there's directionally island but think the on-island we uplift, the charge also of not would things get don't

also so would our club going ] you additional on the course, just for paying go like that People some the unique beach more see to And Mexico. the CocoCay provide things on of pay access whether CocoCay at for. Perfect or into Day experience Perfect that or slide hideaway that or at [ in you're Data you that the of Day to guess that those exist pay to for islands Perfect all have money things island, not we will,

CocoCay can So a of certainly don't that think we double-digit opportunity think course, would pointed And the to something you I more yield because, think generate Caribbean. Western of there to not demand going of we're is what in I do really our kind the strong so that kind learnings things obviously that we work that's we demand. to mantra, take exceptionally and improvement better And will certainly drive continuous apply there's because do well. of things can we'll from

to it's well one is in important this, beach also have Vanuatu, as the we're going the one all is South Steven, of to clubs, Nassau, Pacific. with think in in Cozumel add, too, to have world in I which and going we're

also we're drivers there will things improve that profile. yield value and So our for other also shareholders our be are doing that

from question the of next comes Matthew line with JPMorgan. Boss Our

quarter. Congrats on another really nice

cited, maybe you you're regions trends on October So patterns elevated Jason, just could seeing? you through continued demand elaborate that the across that

to you [indiscernible]. XXXX, to How maybe could on just exactly translates What optimize want for further that the where if exactly being position then elaborate you it Naftali, And booked margin continued means? expansion?

Yes.

team course, So can one, the in. I'll first chime of take

seeing able goes being And for by, successfully through position, close-in it we October, and demand. saw to book We continue month rise. increase have as even in next you're think as -- whether to that pricing saw or month our demand well rise, that year. that We're I of quarter our into able expectations build the the it's we the each to as is whether -- it's

commentary around our what is it that's the strengthen. that to elevation So continues

obviously of a around right? on, couple think, sure Because the we important are hurricanes, focused hurricanes, more concentrated on homes -- having off despite things is news. are their days or making when there the secured have I is they're that And like people

And so there's always a little bit a of softness around that or can come a storm. couple of days in

that But period course at the in we and a what month, happen of position through strong into risen were And not able an a an strong to at assume build helps We when position. but thing us already were the had we next also we think look elevated same above beyond saw September, I only the year. quarter of year. kind the elevated

Naf And book on I'll let comment position. the optimal

Yes.

last and maximize the we we to for build as That's business information we, taking year. decisions. right? next process the tools where to imagine, we couple making are do, the important that make been of on focused the this go have other do, tried of and sure deploying and that try AI years, technology year, Matt, thing all to in book we right can a and we you through the every yield, We So most

and good to drive cross to a means book to of build that good -- we at good pretty And have and demand good continue what pricing business, as where year it We we we runway built wave. the into start feel we of kind is sit. a

the we that if the year have probably But or at said, a and should we we better last regret. Matt, And little look bit The tools some it. have yield obviously revenue table. -- that. when could I would add we the say even point little tools our conservative a we're Obviously, at one back, every We to our look more in day. slowed on would we And bit think Yes. smarter look management had we I left time and bookings. whether before, just back same year get

tools And we confidence position so we're where I building last time think more book higher of were way year, XXXX. and at with line in these our we're same more rates. the in ahead We're at in

we And here to and that booked so look, we're we're ultimately year a most important XXXX on say, to returns. wanting And be beyond. up that's for to looking last and what's wake optimize and able of growth to think our revenue I "Oh, make ahead We're strong drive margin same volume not is time standpoint. sure yield

Our the Ciepiel Research. comes from Vince next question with Cleveland line of

time strategy? a noise, And the a of the hurricanes wave that you early I out at election maybe into when bit noise more best as -- things get the you accelerated Can bookings bookings course there's on like you in kick It in managing next little wanted imagine the look bit pouring your maybe a imagine zoom sounds the you year to how the through of or dollars course in bookings budget recently. think despite quarter? used trends little a call, the term season? hurricane October. through on I XQ since the of comment last what within I like a ad isn't you expect growth to

we guide quarter, typically try to at obviously, position. Well, guide the our a for XX-XX

we marketing of And think the do guests on demand, see is And we great building that teams then who through ships, I that's demand each when been or really what more them seeing course, the from our and our are I -- have good -- a then, off think frequently elevate. and book life. best And feed more our of day. have, occurring. vacations but of it's we're great that not all just patterns having to advocacy every their able that coming helps advocacy problem probably we

have, types So the in that the have been and driving for invest to I that's of And way we we continue doing. that that we're healthy really expect we marketing think to business. going demand marketing our

high-quality So that I on across in demand moderate on saying growth. outside next quarters not channels of guiding year generating or for for obviously think we're yield next different we're different our But the our markets. year focused

And one follow-up on Great. that.

the you here called worth right having cadence out yield time, out hurricane next you can into based growth 'XX yields. mentioned Any Anything small carry-through opportunities year? yield calling a for see at XQ think a little mentioning, last on impact And drive what this still I now? bit anything year, on out-years worth into You of the growth, occupancy? to the on

really the Yes. not there been -- from impact Vince, on so hasn't any hurricane.

call dock just and the really next dry So year?. the I delivery days out to -- out. given ship call not growth, nothing ships of new the and right, of capacity -- that's the some the

Great.

Michael. it's Vince,

Just week the add be on little the on -- elections bit the result over elections, gone impact of when spread but it done of impact literally a no over a be you -- longer effectively election, it period, And a may analysis decades. over matter there's the of which no there they and way of on we've back volatility as go. may to bookings, the during bookings

with line question comes of Chaiken next from Mizuho. Our Ben the

ahead. is you Florida, the half cruise something think And want been touch to just correctly? go on presumably that, you a I sorry, have then you mentioned Jason, Did that Gulf -- market as over. glossed say but I sized only Coast I may penetration? similar Did First, that hear

to similar No, Yes. that. is actually, half has didn't marketplace similar a I the penetration with say propensity Texas I that a cruise. said very sized

Gulf market, Royal Cozumel, supply supply Royal experience that more having allow in Club So only at to that and the experience. lower markets other an and in cost of also Beach like drive not that cruise cruise [ more Mexico have easier assets can will I but Coast a us more the Beach ] think

that feedback I done a And guess It that you the customers it's Or just you lack you've think Texas of compelling. Got work underpenetrated? that gotten or the guys suggest opportunity? really from have how it. about destinations. do seems that being

Michael. It's

we Tampa. add to Cozumel. with short a much Club to and Royal comments, Jason's positive of really mean a things introduce product the Mexico really larger quite out Perfect Day Just that North volume there's One Texas, of come that Louisiana, Beach Florida, market can I few is

offer Cozumel. we short we'll to And Day us. of a great really I Royal be really know from really for Beach course, younger And short families. an that, and is ports Club to able mean product catches that these break it Perfect opportunity extraordinary with

So we competitive really a that's think huge advantage.

will ships. we the And when up success. Texas incredibly Caribbean for the example, brand-new It's and just in product huge and about the efficient, class that we terminal Royal icon offering around large of when opened oasis can been handle think a that's it the you our pandemic, market, out have, came

Club, customers Day we've class ship and short product So operating product when think Gulf out Beach you ports. the think about really that and a of to for offering on of Royal we Perfect all got our great Mexico Texas of

been a helpful. CocoCay little then last Got the it. bit, shifting That's years. of couple gears clearly has over material very And a positive

think Why Paradise you your I that Island, private about not? different it's customer? per why than level As destination, similar next uplift directionally, have geographically. or of CocoCay a will ancillary slightly know

experience. X,XXX club Beach beach be people to day going it's mean exclusive a will I different. to slightly an approximately the have able Bahamas. It -- go the in Club does Royal to be it's Yes,

when Day, is go Perfect in and is, combination a that it's to of for difference cruise. The pay included you the

a great experience go and day You actually having spend additional things. day, perfect Day can you to to without a have can to Perfect

it literally and see the all beach positive with have to Royal buy But I so be as and a a go ticket you'll pay. generator to experience really it Beach with margins. revenue Club, we for club, the will good mean

with the comes Lizzie from line Sachs. of Dove Goldman question Your next

I called timing quarter. costs. back favorable was think, wanted I out on every you've to of looking I start off costs, and

share the discipline quarter? whether also strong of Just in there just kind hitting the a degree is cost fourth curious can that more of cost And which that you cost line? that's buckets of there and kind details if also benefiting

Lizzie, unique here. Yes, is little this so year a

double lot year. a have last dry had We of what we docks,

impacts timing right, get out but docks, from that that So kind especially been always trying supply chain a work suppliers, and year, have it dry of a of timing you're we to lot best those little we're sure tricky, make we out the to that's and the this called the around specifically has cost and of around today. related it,

really is. what it that's So

at making the right same sure really we product, the sure into make that you the cost And to strongly investments that And manage, are margin. on future. and time, as really sure know, enhancing the that focused investing really, we're are trying making we making for we

we of all So that of the how cost. kind manage is

moderate the about makes That online of islands have. it. these the those Got sense. private new you upside coming A yield call that ships bake Does comments premiums? on term. like-for-like around more with all Or new you term? And on that longer in then of private lot questions kind a destinations, new the have Does that the have of the that from the growth growth islands, kind and outlook? tailwinds that you private ship just the big are moderate is the yield premiums with of focused longer

of look has which Lizzie, a little at think it. so moderate to when yield I we a growth, range bit

will I so typically be like-for-like do growth. think like getting about new year X new we the yields. is because to contribute hardware a mean we bigger, to like-for-like a there I think or when and our expect base hardware, point

we have -- moderate gap on then the more -- that's get we're example that's higher rate the like also, us. range -- the to mean, opportunity of the at you when kind about the things And each looking we [indiscernible] that an you past. is we the outlook. why as to And yield at these into you into historically, end of get that's higher at When look where think And private it. think in plan of year, we look when look seen introductions the get again, not I I try of destinations outlook, to growth this of we the we we kind and what have ahead

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we're this year. not over were XX% As commented,

is have place a of at we a growth that what so moderate little that and generally different. our we market behaviors yield business consideration, take look trends seen time. gets over And But kind bit have and run comparable in into takes the just kind rate of is seen when long-term we

from will come Our line of the Robin Farley next with question UBS.

off commentary Just it outlook, start. the like sort of to about an XXXX hearing your above sounds average it's

maybe we in is kind where range that average Should of being to look for positioned sort yields, year? as X% at years the about And that you X we so or yields. before say, be typical guidance if of X% of would the the next guided what think than be pandemic, net kind you're and your initial to better

would more hope our I well. guide I next for us year. of looked kind I you're think Well, run say first, still less But had that's how you landed. historical where we at is for long It to average, Rob, too or early

see strength But continue to seeing build to -- and to our position our our feeling raise for think give a how not I gap continue next very close I mean patterns demand optimize yield a yet, to able But continue are be book about -- raised land-based we're of them, of that want prices base we'll and vacation. we're already and we've we where the we're in and of that off to good to we our by the how point quarter or that's the at book ability ability the profile. yield guidance year. to to continues off we see higher to

any follow-up, sort what book. other of a you and of idea counting of orders an question But words forward think and still give still thinking on just game? of -- XXXX about orders. done And fair this period your have of Great. them your that you're options period? In at as Okay. ordering sort of as to for we 'XX for? Like I'm of seen a you're Or us seeing how kind about that? Can anything all your thinking then point, order just but kind on

Yes.

certainly cost say seen lots growth XXXX. of our for heavily to as moderate of and that the I maybe even we But secured. us we will moderate growth, all commented, to are think yield that good most and 'XX we've control. orders available have that capacity part, But you into options I you have subscribed through

fleet, moderate capacity growth So brands. moderately grow continue on of we to look that each our moderately standpoint, grow to our

growth as when to just ships not again, at they're to confident the yield about that the all take same the yield same and We we going to large to global all and on not order all brand, And not general growth ships, they're get our very a time. itinerary. they're we going a ability operate over same going capacity reminder, very market, footprint good growth we feel

from line Cunningham Research. the question Conor with next Melius comes Our of

be thinking Or balance cash flow potential helpful. I are really The cost discussed this a there at sheet. just to with I'm I a When numbers start to may but realize Day, thoughts as of about to Investor good done look at any not the understand, that you've would start to are job to you point, going obviously to very lean cash left a good. shareholders? your in to going be are ramp. sheet? very balance ramping really that continue Naf, your the flow trying we that the high at debt is lot just

Sure. Yes.

So thank you.

very sure bring make It to a important of important we First, to sheet asset. us. balance being it was the very was back an Trifecta to pillar that

So we to security with we within also the crossed is our unsecured guarantees key back No guarantees, and obviously now. targets. status. leverage feel quarter to then during it getting have through all a are to we very get granted this that where on And pandemic milestone the done that are the everybody we

more while cost find of be that a to we the to have the cash make ways for higher we the always flow even a the continue lower to sure very sheet. that cost gone, to company. continue of We lot strong will generate that focus make balance debt capital, is will And and we sure

as And a strong allocation, maintain we we need balance sheet. think to capital obviously, about

opportunity $X We to to we opportunity in market a trillion an almost see share. great have invest a continue large to win as

our with technology better So we're customer the very the like business. and strategic to important to doing getting and just things get new things the and closer other things ships, destinations,

then we through converts. there this said want We and was dividend historically, something factor. to reinitiated the a to dividend competitive with return we then capital that And quarter, a we the get last into And quarter did continue also buyback.

of with continue to a obviously, opportunities. lot generation, cash will So have those

And of have Okay. that investments going you think and additional islands and cost investments But to of talk so regular it terms on this historically, all then new onboard is And private Helpful. about in underway. come, it's these forth. with whatnot. so or cadence I -- product be that a and like would type you whether seems pressures investment,

like management. just we an outlook there's your from over point Is pressure this is to strong being there forward? that should -- be in The So is about the cost going haul? in embedded it be investments ongoing talk cost assume long going going that just to

Yes.

So we managed absolutely. -- yes,

on So the cost into the right? we business holistic everything So everything we said. the account, manage take just and you basis, including

grow We're to capacity. continue We company. large a

they that and of be to investments, incredible while add think structure, moderate will cost into growth, capital will of be prioritization about And So lot some we're cost have where these a very returns and expansion. of costs, the capacity there committed margin is they may as and the that a of deal growth, control. the cost -- and strong And invest, margin we will subscribed moderate going account. think we formula, kind to all much to both we're

Yes.

higher And our cash flow cetera. shareholders, free result obviously our higher while a more manage important I this want gotten and grow ultimate yields, we we've available the margins, costs. et to profile, growing -- higher it our that's focus, is growing is obviously, in ] Our [ our past think leads in to that's margins. and our to point, But capital one margins focus by which really to want we return

add returns. numbers destinations things without it our that our and little So profile guest cause up expectations, margin I all are we new higher and APCDs higher noise But obviously, would a example. better that of more sometimes with that, experience, increasing also that there think come that an in as as these can yield driving bit a come,

with Hardiman Our the of line next question James comes Citi. from

at you maybe to stay ever It certainly should actually of to like I wanted investments. investments potential available returns on you, I this topic say. broader high have returns, than higher -- a menu seems and of

been speak return I guess much and profile seen this to for one you, it than ever maybe would to so than industry. better has why better It's I seems argue in your maybe changed of be haven't the seems viable we've seen of cruise strong who questions It I a has continue like just type to get, meaningfully. new as a industry. investors as this certainly for a an or something return

think on down guess necessarily. in we the like seem over invested return you ceiling? moving at capital. I ultimately And do long forward, as think double-digit settle returns doesn't where a term? You're about Is it's slowing It there

just So trying the through least to there think sort long what term? game or is at of the end

destination And also they're segments, and And can how the the that of are of we've those and of experience lot looking long to customers segments mean, business. on it I and very enhance ships the that inside do think for brands we those ships of -- building is been tomorrow making want like. are tuned of with investments think, then I of looking segments we it in much starts are long-term being experiences a We've to seated a front. a are Yes. leaders be Well, those I be James, able with are to today thoughtful things been sure period that on what think And making our very we what the discerning I lot a customers in, really there's the at it. time. very about and for into that. very, monetize

think, able that and orienting wake experienced as be on up leisure comes to every on and an wherewithal I down the in broad and that. we travel with ensuring side, Although, ourselves compete day the happening our assets and is business -- the to consumer what's experience focusing have focus then to

it's are in be that's customer. how our we I technology experience, to very And take we feel combined on and interact return we things sophisticated on how friction things to that and we also how out our think that our margins And able those that. of runway not but more which with all we yield and are ships, why the I like both how manage think continue profile, is to do visible just enhance do have we we think

that a yields This us and that leisure drops what's opportunity bottom growing to is do with should -- think of sorry, margin billion out And your a I and mindful expect I And $X is, I moderately a line. how the operating of on fixed of market us cost I'm $X driving we leverage, take in that being and share, business travel focused way. us. think lot you to more behave think so just trillion lot being your think, continue of share very to

can really sort an that allocation, you're really that, to profile, sounds refinancing bringing not Got then that it That's about mean rate. earlier And putting talked about, obviously, even along returns down focus on, and think any of maybe as debt leverage helpful. maybe it. like interest is those I improving But priority further capital you to question of And just lines, I there's no outside speak that? by key. considerations nonfinancial

cruise of competitors, land-based of advantage brings in these term? lines you be you about context the think some environment, and that how maybe the vacations to these longer competitive I continuing in those do in it your about push as the other or context But land-based investments what think of whether areas other

James, balance for as returning as being as an about returning think to I've do opportunistic opportunity Well, board about better. we to dividend We decision. us always said, thoughtful you course, repurchasing, Naf a about basis. and feel of it, really But well shareholders. there's that's the also our competitive sheet. Sure. share commented on good always I obviously capital especially talked

sustainable do right? the on our experience-driven look, then customer and in how we're strong And And do we're have focused And an have we business. and our experience growth so how leverage we keep ecosystem, we know-how all internally.

things our world. It something. partner, consider. buy are we build reps could And that that other that these relationships, out mean mean get ecosystem. the doing and that have It something. experiences keep strategic -- to we'll customer the are that customer of the probably we're best our all because we Those on but could in mean doesn't will ultimately that to we can have There delivering that are trying vacations can more

why that's we and deliver vacation bar slogans, building but And have and the we best in a lifetime, that of I at are world delivering the I are capabilities more think vacations. a the a we more know of lifetime of to

Naftali That I our Holtz, CFO, call the for will will to closing session. conclude question-and-answer hand remarks. back

thank for will day. Blake all for and your a company. you We interest be available great all in wish We the participation follow-ups. any you

Ladies conference this Thank today's and concludes you for call. gentlemen, your participation.

disconnect. now may You