Consumers Continue to Demand Experiences, Buoying Royal's Booking and Pricing Prognosis

With travel constraints and coronavirus hesitancy in the rearview mirror, consumer behavior around travel and social distancing have maintained momentum at Royal Caribbean, leading to robust demand and pricing (ahead of 2019 levels) at the business. The redeployment of the fleet was completed mid-2022, and booking patterns have surpassed historical levels. As such, Royal Caribbean should see record pricing in 2023, with only mininal remaining bookings paid for with future cruise credits and still-elevated onboard spending. On the cost side, the impact of inflation and fuel prices could reman disruptive over the near term but have been managable over the course of 2023 thanks to hedging strategies, aiding profitability.