By Sanskriti Shekhar
July 28 (Reuters) – Royal Caribbean raised its annual profit forecast on Tuesday after reporting stronger-than-expected second-quarter results, even as it factored in a modest hit to bookings from prolonged geopolitical tensions.
The cruise operator now expects annual adjusted profit of $17.73 to $17.87 per share, up from its prior forecast of $17.10 to $17.50, while it trimmed its revenue growth outlook to about 9% from about 10%.
Royal Caribbean said demand remained strong, with booking volumes above last year’s levels and pricing at record levels.
“Consumer demand for our vacation experiences is strong, and guests continue to demonstrate a desire to spend on memorable experiences with us,” said Naftali Holtz, chief financial officer of Royal Caribbean.
Although it is still early, booking trends for 2027 are encouraging and pacing ahead of historical levels, including for itineraries where demand was affected by geopolitical developments this year, Holtz added.
Demand from higher-income travelers has also helped cruise operators like Royal Caribbean weather broader consumer caution, while strong pricing and onboard spending have helped offset pressure from higher fuel costs.
“Royal Caribbean could be relatively well positioned given the strength of its flagship brand and its above-average exposure to higher-income consumers…even if the macro environment becomes more challenging,” said Michael Gunther, analyst at Consumer Edge.
The Miami, Florida-based company reported a 27% rise in quarterly fuel expenses to $355 million from a year earlier. However, it reduced its full-year fuel expense forecast to about $1.34 billion from its previous forecast of $1.35 billion.
For the quarter ended June 30, it earned $4.21 per share on an adjusted basis, compared with analysts’ estimates of $3.98, according to data compiled by LSEG.
Shares of the Odyssey of the Seas operator, which have risen about 20% this year, were up 2% at $311.54 in morning trading.
(Reporting by Sanskriti Shekhar in Bengaluru ; Editing by Tasim Zahid)
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