Thursday, 5 May 2016

Americans avoiding Med cruises was a blip for Royal Caribbean

Americans avoiding Med cruises was a blip for Royal Caribbean


Royal Caribbean transiting the Grand Canal Venice.

Geopolitical events in Europe impacted North American bookings of Mediterranean cruises, Royal Caribbean Cruises Ltd. officials said during a conference call Friday to discuss RCCL's first-quarter results
CFO Jason Liberty categorized it as a "lull" in demand, which the company filled with bookings from European travelers, a market that the company said was robust. However, the sourcing shift was accompanied by a decrease in fares and a drop in onboard purchases because North Americans tend to spend more money than Europeans on Mediterranean cruises, Liberty said.
Outside of the Med, however, bookings to the Baltic region have proceeded apace, and executives noted the strength of the Caribbean, Alaska and Bermuda, positing that some of the bookings intended for the Med had been redirected to North America.
"Some of the softness we see in Europe, the Caribbean is the beneficiary of that," said Michael Bayley, Royal Caribbean International's CEO.
RCCL CEO Richard Fain said it was "interesting to note that strong last-minute demand helped our bookings at the same time that we were simultaneously enforcing our price integrity program." He pointed to the Caribbean in particular.
Overall, robust sales during the first three months of 2016 and strong demand in the Caribbean helped fuel a bullish mood. Fain kicked off the call by saying it was "gratifying to report results that are so much higher than we have ever enjoyed in any winter quarter in our history."
"We're in the happy position that just about everything in the quarter that could have gone right, did," he said. "Ticket revenue was stellar, onboard revenue was terrific, costs were well controlled and even below-the-line items helped."