Royal Caribbean lifts annual profit view as cruise demand soars

By Thomson Reuters Apr 25, 2024 | 5:36 AM

(Reuters) – Royal Caribbean Group on Thursday raised its annual profit forecast for a second time, benefiting from record demand for cruises and robust onboard spending.

Shares of the cruise operator rose about 5% in premarket trade, as the company also beat first-quarter revenue estimates.

The boom in demand for cruise vacations has sustained through an inflationary environment as people opted for vacations at sea over land-based alternatives that are often more expensive.

The industry is expecting 35.7 million passengers to set sail this year, a 20% increase from pre-pandemic levels, according to estimates by the Cruise Lines International Association.

Cruise operators also plan to hike ticket prices and encourage onboard spending.

Royal Caribbean now expects annual adjusted profit between $10.70 and $10.90 per share, compared with its earlier forecast of profit between $9.90 and $10.10 per share.

It reported first-quarter revenue of $3.73 billion, compared with market expectations of $3.69 billion, according to LSEG data.

(Reporting by Juveria Tabassum and Doyinsola Oladipo; Editing by Devika Syamnath)