Royal Caribbean Cruises Ltd. bookings pacing ahead of 2012

By Tom Stieghorst

Royal Caribbean Cruises Ltd. (RCCL) has seen year-to-date bookings run about 5% ahead of 2012, although they slowed in March when the public's attention focused on the Carnival Triumph.

The parent company of Royal Caribbean International and Celebrity Cruises briefed Wall Street analysts on business conditions after reporting Q1 profits. RCCL's net income of $76.2 million was 62% higher than Q1 2012, which was affected by fallout from the Costa Concordia accident in Italy.

RCCL Chairman Richard Fain said the Q1 results came from strong business in North America and better-than-expected, although still weak, results from Europe and despite a downturn in China.

Ticket revenue and onboard spending both rose, with the latter especially strong on ships that had been newly revitalized or had new itineraries, said Vice Chairman Brian Rice. He said average lead pricing is 3% higher than last year for sailings in the next 12 months.

The company's revenue in the first quarter grew 4.4%, to $1.91 billion.

Europe remains the biggest question mark for the balance of the year. RCCL said it would cut capacity in Europe 10% next year, after cutting it 10% this year, leaving about 25% of the company's berths in Europe.

But Fain said that while European economies weakened, RCCL's results from Europe weakened less, and bookings showed signs of an upturn in late February.

"We keep watching it," Fain said. "It wasn't as bad as we thought it would be."

However, expectations were low, and demand has yet to turn around, he added.

Rice said that softness was pronounced in Spain and the U.K. was "weaker than we would have expected," while Germany held up better and the other markets in Europe are doing well.
In China, Royal Caribbean has stopped sailing to Japan because of a territorial dispute, leaving only South Korea on itineraries from northern China. "Yields are not what they would have been but for this issue," Goldstein said.


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