Royal Caribbean's blowout bookings show YOLO spending charging full steam ahead
Sail away… to near-record bookings. Royal Caribbean's stock jetted up 7% yesterday after the cruise conglomerate reported expectation-beating #s. The boaty biz, which also operates Celebrity Cruises and Silversea Cruises, still lost $500M — but that was less than half of its year-ago loss. Analysts say strong demand combined with higher ticket prices could make for smoother financial sailing. Last quarter, booking volumes blew prepandemic bookings out of the water. Royal’s not the only one working on a cruise comeback:
- Come one, come all: Carnival execs said they expect first-quarter bookings to hit 90% of 2019 levels, and this year the stock is up about 50%.
- Not-so-rough waters: Norwegian Cruise Line said last year’s bookings matched prepandemic levels (and at record prices). This year its stock is up 47%.
Round trips and road trips… It’s not just Cruise companies getting a consumer-powered boost. Last month, American Express' CFO said that spending on experiential splurges like travel and entertainment is "off the charts." And airlines like Delta and United reported expectation-beating profits last quarter as demand stayed strong despite sky-high fares. Meanwhile, Disney (which reports earnings today) is expected to show strong revenue gains from its theme parks.
YOLO spending's becoming a lifestyle… because the pandemic elevated the value of real experiences. Despite historically high inflation and historically low consumer sentiment, people are still “revenge spending” on socially good times like cruises, flights, and amusement parks. As the cruise industry's "wave season" heats up (picture: promos offered from January to March), we'll see whether YOLO spending continues to maintain its grip on many Americans’ pocketbooks.