Royal Caribbean raised its full-year guidance Tuesday on the back of strong cruise bookings.
The company now expects 2025 earnings of between $15.41 and $15.55 per share on an adjusted basis, up from prior earnings per share guidance of $14.55 to $15.55.
CEO Jason Liberty noted traveler preferences are evolving, saying there’s an increase in people choosing to vacation more frequently and are opting for experience-driven travel. Royal Caribbean said 75% of consumers report they plan to spend the same amount or more on leisure travel over the next 12 months.
“Our experiences are designed to meet these evolving expectations,” Liberty said.
Royal Caribbean reported growth in bookings during the second quarter from the prior period, especially from travelers booking closer to their departure date. It’s a trend Liberty attributed to the growing number of younger cruisers, with millennials or younger generations now accounting for about half of total guests. And, they’re willing to pay a premium, Liberty added.
“In the weeks coming up to a sailing, the very few cabins that we would have left on each voyage, people not only were trying to get those cabins, but they were willing to pay considerably more money to ensure they get the vacation experience that they’re looking for,” Liberty said in an interview.
The company reported second-quarter adjusted earnings per share of $4.38 on revenue of $4.54 billion. Wall Street had expected earnings per share of $4.09 and revenue of $4.55 billion, according to estimates compiled by LSEG.
The cruise line’s income rose to $1.2 billion, or $4.41 per share, an increase from $854 million, or $3.11 per share, a year earlier.
Meanwhile, the cruise line reported capacity was up 5.8% compared to the year before, with 2.3 million guests taking a Royal Caribbean cruise during the second quarter.
Still, shares of Royal Caribbean fell 5% Tuesday.
The company noted bookings for its new ships launching this year, Star of the Seas and Celebrity Xcel, are performing well.
“The strong demand we are seeing across our new ships and land-based destinations reinforces that our strategy is working and resonating with today’s traveler,” Liberty said.
— CNBC’s Krysta Escobar and Dawn Giel contributed to this report.
