Profit and onboard revenue up for Royal Caribbean

Profit and onboard revenue up for Royal Caribbean

Royal Caribbean Cruises saw profits covering the peak three summer months edge up by $10 million to almost $378 million over the same period last year.

Stronger last minute demand in Europe and Asia, as well as “robust” onboard revenue drove the revenue improvement in the three months to September 30, according to the parent company of brands such as Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises.

This helped offset the impact of an unscheduled dry dock for Celebrity Millennium following power failures which forced the cancellation of six Alaska cruises in August and September.

Booked load factors are ahead of this time last year in all four quarters of 2014, according to the company. It forecast that 2014 should be the fifth consecutive year for yield growth.

Prices for the first quarter are in-line with the same time this year and are up for the second, third and fourth quarters.

Booked load factors and rate are both up significantly year-over-year for Europe, which will account for 22% of the company's capacity in 2014.

Asian bookings are up “considerably” despite a continued territorial dispute between China and Japan.

Advance bookings for Alaska and other product lines are also “providing encouragement for yield improvement,” the company said.

Caribbean bookings have consistently been running ahead of the same time last year, although slightly below on a capacity adjusted basis, the company said.

Chief financial officer Jason Liberty said: "Caribbean pricing remains under some pressure, but while it is early in the booking cycle, we expect yields in the Caribbean to be flat to only slightly down in 2014.

"Fortunately, the summer Caribbean is a core strength of ours and with the improvements we are seeing in our other products, we are forecasting overall yield improvement in the low single digits for 2014."

Commenting on the third quarter results, chairman and chief executive Richard Fain said: "We are beginning to see the payoff from our efforts to improve returns during these challenging times.

"We have a ways to go, but our strategy and our investments are driving higher revenues and achieving cost efficiencies that bode well for 2014 and beyond.

“We are especially grateful for our employees' dedication to our profitability improvement initiatives.”

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