The majority of Royal Caribbean Group's guests this year are first-time cruisers or new to the company's brands, said CEO Jason Liberty during the company's Q3 earnings call Tuesday.
The Utopia of the Seas is a part of that story. Royal Caribbean's sixth Oasis-class ship started sailing out of Florida's Port Canaveral in July, and its three- and four-night cruises have attracted many first-time customers, Liberty said. He added that Utopia cruises "skew toward millennials and younger guests."
"The demand for Utopia has been incredible and has well exceeded our expectations for both ticket prices and onboard revenue," Liberty said.
Meanwhile, Royal Caribbean's repeat guests are up 20% from last year. And whether they're loyal or new customers, most guests -- more than 70% -- are purchasing onboard activities before they sail, Liberty said, and those customers spend twice as much as those who only spend while onboard. About half of the company's onboard revenue in Q3 was purchased through AI-driven pre-cruise channels, he said.
As for the specter of a slowdown, Liberty doesn't see it. He said bookings for 2025 outpaced 2024 levels during the third quarter and into October, and that ship occupancy is in line with prior years but at higher prices, enabling Royal to optimize pricing and yield growth.
Consumers are willing to pay higher prices in a "macro environment that favors a growing demand for experiences and vacations."
"American households are wealthier than ever, with continued wage growth and low unemployment driving strong consumer spending," Liberty said. "Spending on leisure has grown a lot faster than most other spending categories over the past 12 months, with spending on travel increasing at a faster pace than other leisure categories."
Liberty expects that trend to continue over the next 12 months.
"Millennials, families and active cruisers are all over-indexing on both leisure travel and specifically cruise travel," he said.
Royal Caribbean's profit exceeds $1B
Royal Caribbean Group reported net income of $1.1 billion for Q3, up from $1 billion a year earlier. Q3 revenue reached $4.9 billion, up from $4.1 billion.
With the strong results, the company raised its guidance for full-year adjusted earnings per share. Royal also increased its full-year yield growth expectations to 10.8%-11.3% over 2023.