Reinstating Narrow Moat Rating on Royal Caribbean With Financial Returns on the Upswing

With travel constraints and coronavirus hesitancy in the rearview mirror, consumer interest in travel has maintained momentum for 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 report record pricing in 2023, with further growth anticipated in 2024, given robust advance booking patterns. On the cost side, expenses should be better managed ahead, with occupancy set to return to historical levels for the entirety of 2024, aiding profitability.