Royal Caribbean Sails Into Important Summer Season With Acute Visibility Into Demand

With travel constraints and coronavirus hesitancy largely in the rearview mirror, consumer behavior around travel and social distancing have returned to normal for Royal Caribbean, leading to positive operating cash flow and EBITDA at the business. The redeployment of the fleet was completed mid-2022, and booking patterns have returned to a historical pace. As such, Royal Caribbean should see record pricing in 2023, as the firm digests a few remaining bookings paid for with future cruise credits and takes new reservations. On the cost side, the impact of inflation and fuel prices could reman disruptive over the near term but should continue to moderate in 2023, aiding profitability.