Royal Caribbean's loss narrows as cruise bookings rebound

Royal Caribbean Group on Thursday reported a smaller-than-expected quarterly loss on strong pent-up demand for cruises and as passengers spend more onboard its ships.

Shares in Royal Caribbean climbed 5 percent to US$36.64 in premarket trading as the cruise operator also said it returned its entire fleet back to operations.

The U.S. Centers for Disease Control and Prevention earlier this month stopped reporting coronavirus levels for cruise ships in a move considered the next step toward a full return to normalcy for embattled cruise operators.

The industry has been steadily cruising toward full occupancy after a near 18-month shutdown, with demand from loyal patrons proving a silver lining for cruise operators that are dealing with higher fuel prices and record debt levels.

Affluent guests have also shrugged off the inflation pinch to splurge on watches and at spas as well as casinos on the ships, partly making up for the blow from cruise operators' occupancy constraints.

The cruise operator's revenue was US$2.18 billion for the second quarter, compared with estimates of US$2.11 billion, according to IBES data from Refinitiv.

Net loss narrowed to US$521.6 million, or US$2.05 per share, from US$1.35 billion, or US$5.29 per share, a year earlier.

Excluding one-off charges, Royal Caribbean lost US$2.08 per share, smaller than estimates of US$2.20.

Royal Caribbean still said the spread of Covid-19 in Europe and the Russia-Ukraine war have lowered its occupancy levels on cruises around the continent, which carry higher-than-average ticket prices.

The owner of Celebrity Cruises and Silversea Cruises brands forecast total revenue of around US$2.9 billion to US$3 billion for the third quarter, compared with estimates of US$3.03 billion.

It also forecast per-share earnings to be between 5 cents and 25 cents for the third quarter, compared with estimates of 92 cents, due to higher fuel and food costs.

(Reuters)