Travel Weekly's Cruise E-letter: August 2, 2005

ROYAL CARIBBEAN CRUISES made a $154.5 million net profit during the second quarter of 2005, a 26% increase over its second-quarter 2004 net profit. The company said a 5.3% increase in revenue, to $1.2 billion, was due to an increase in ticket prices and onboard revenue. Net yields increased 6.3%, due in large part to a deferral of costs such as marketing and maintenance to the second half of the year. The company said consumer demand remains strong; 37% of bookings were taken within 90 days, which is consistent with pre-9/11 trends.

NET CRUISE COSTS increased 5.7% mainly because of a 37% increase in fuel prices during the quarter. During a conference call with Wall Street analysts to discuss earnings, Royal Caribbean CEO Richard Fain said the impact was huge. Current fuel costs represent about 7% of the company's revenue, up from 5.7% during second-quarter 2004.
 
A FEW QUOTES FROM RCCLs
second-quarter call:


* Royal Caribbean president Adam Goldstein said the company may be seeing some negative effect from recent hurricanes -- both from the storms last fall and this year's early hurricanes.

* Fain said RCCLs policies on group bookings and rebating are both proving to be very popular with our travel partners -- or at least the majority of our travel partners -- and are helping our revenue management quite nicely.


* CFO Luis Leon said Celebritys yields continue to grow faster than Royal Caribbeans. Said Celebrity boss Dan Hanrahan: As you can imagine, its a real focus of mine and were pleased with results so far, but by no means are we declaring victory.

CUNARD LINE is ready to flip the switch on electronic booking capability as early as this week. It would be the first time Cunard has allowed agents to book cruises electronically.
 
WINDS OF CHANGE:
Another marketing executive has left his post at a cruise line. This time it's Jim McHugh, who joined Windstar Cruises in December as its vice president of marketing and sales. A search for a replacement is underway.

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