Extra shrimp cocktail... Royal Caribbean's profits popped 14% from last year to $250M during "wave season" (official industry jargon for Americans flocking south for winter). Tickets rose, on-board spending increased, and the share price closed in on a record high.
Man down... For the rest of the year, Royal's facing currents in both directions:
- Bad & embarrassing: The "Grand Bahama Shipyard Incident of 2019." Two cranes dropped on docked ships during routine maintenance, canceling three "Oasis of the Seas" voyages.
- Bad & out of its control: With the stronger US dollar, profits earned in euros (Royal runs German and Spanish cruisers) translate to fewer dollars. Plus, fuel prices rose.
- Good & awesome: It's raising prices for beds on its ships (the ones with the folded towel origami animals) — Up 7.5%-9.5% across the board.
Pricing power is a rare muscle... Royal is swole with it. It raised prices 7.2% last quarter, but passengers kept coming. That vacation splurging signals a strong economy, consumer confidence, and demand for the Royal treatment. Competitors like Carnival Cruises also rose Wednesday as Royal captains capitalize on price hikes.
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