Last-minute bookings power Royal Caribbean's revenue surge

The Mariner of the Seas' advanced bookings are unusually strong for a ship that sails short cruises, said RCCL chairman Richard Fain.

A surge in close-in bookings helped boost Royal Caribbean Cruises Ltd.'s second-quarter earnings by 26%. Net income was $466.3 million, up from $369.5 million a year earlier.

RCCL chairman Richard Fain said the flurry of last-minute bookings raised prices. 

"You do have quarters where there's a sudden surge in last-minute bookings and that did happen in this last quarter. And that's lovely. But it's absolutely unpredictable and, frankly, it was a surprise to us," Fain said during Friday's earnings call.

Guests' spending on beverages, specialty dining and Internet helped deliver a 5.5% year-over-year increase in onboard revenue. Total revenue in the second quarter was $2.33 billion, up from $2.19 billion.

Fain said the Mariner of the Seas, recently introduced into the short-cruise market from Miami after $120 million in upgrades, is booking well in advance, more like a ship with a seven-day itinerary. 

China sailings performed very well in the second quarter, generating strong yield growth and exceeding expectations, CFO Jason Liberty said. China is booked "nicely ahead in both rate and volume" for the balance of 2018, driven by progress in expanding the distribution network, he said.

In Europe, Liberty said RCCL anticipates "another record-breaking season with strong global demand for European sailings and better pricing than last year from all source markets."

He said demand in the Caribbean has been strong "with bookings trending ahead of last year's very strong levels."

It was too soon to factor in any results from RCCL's 66.7% stake in Silversea Cruises, but the general effect in the future will be to raise average cruise costs and yields, Liberty said.

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