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In preparation for Royal Caribbean’s Q4 earnings release tomorrow, we’ve put together the pertinent forward looking commentary from RCL’s Q3 earnings release/call.


  • “Book-to-load factors are higher than same time last year for the fourth quarter and for all four quarters of 2011.”
  • “Our developmental itineraries continue to show the most improvement with Europe and the Caribbean both demonstrating improving trends.”
  • “Pullmantur has been buffeted by the worst recession of the any of the countries in which we operate and unfortunately, the recession in Spain shows no signs of abating anytime soon.”
  • “I would like to point out that we currently have fuel hedges covering 58% of our forecasted consumption in 2011 as well as 55% and 22% for 2012 and 2013 respectively.”
  • “And for the first time in the brand’s history we will sail with a higher percentage of guests coming from outside the U.S. on our European products. We continue to see the results of our efforts to build our brand beyond the U.S. market. Our long Caribbean itineraries from South Florida are benefiting from the increased international sourcing as well.”
  • “The overall mix of our company is trending more in the direction of guests coming from outside of the United States and for example, with Royal Caribbean International moving from eight ships in Europe next summer to eleven, that will propel that trend forward, so while our guests still come more than 50% from the United States, we’re getting closer and closer and actually quite close to our business mix overall being half of our customers coming from inside the United States and half coming from outside. That’s across all the brands of the company.”
  • “I think included in our guidance is not a huge uptick in on-board spending. We’re seeing most of the accretion that we’re forecasting and we’ve experienced more recently as really being driven by the ticket revenue.”
  • “We’ve baked in some assumptions here around the pressures on food costs. But we continue to be relentlessly focused on cost and I think our brands are doing a great job really trying to figure out how we can squeeze more costs out of our P&L without compromising our guest experience.”

4Q 2010

  • Guidance
    • Net Yields: 5% constant currency or 4-5% as reported
    • NCC: 2% as reported or 3% on a constant currency basis
    • $0.05 negative impact from operational disruptions on Pullmantur's Pacific Dream and the Celebrity Century
    • Fuel cost: $167 MM, 50% hedged
    • EPS: $0.08-0.12
  • “4Q cost increase is really driven by timing, mainly of things like marketing and some maintenance and repair expense that had originally been forecast in the third quarter that shifted to the fourth.”
  • “Virtually all itineraries are booked at higher load factors with better APDs than a year ago.”


  • Guidance
    • Net Yields: 4-5%
    • NCC: 1%
    • EPS: $2.43-2.47
  • “First quarter bookings are off to a solid start and at today’s exchange rates, we are estimating yield improvement of between 2 and 4%. Our current thinking is that the second and third quarters should provide the greatest opportunity for yield improvement in 2011.”
  • “While we are beginning to see some cost pressures, especially with food prices, our brands and department heads continue to relentlessly focus on costs. Accordingly, based on current fuel prices and currency exchange rates, we are encouraged that 2011 could be a year of record profits for our company.”
  • “We have seen early signs that Europe and Alaska are strong next year.”
  • “Our capacity mix is pretty similar to what it was this year, but we are seeing growth in Europe.”
  • “We have a little over a third of our business on the books for 2011.”
    • “Generally speaking, we say we tend to end the year around 50%. So we are now running above the 2010, the ‘09 levels and even the fall of ‘08. But we’re not quite back to where we were pre-recession levels.”
    • “Length of booking curve is 4 months.”


  • “This evening, we depart for Turku, Finland, to take delivery of Allure of the Seas, sister ship to Oasis of the Seas, from the STX shipyard on Thursday.”
    • “As we have already experienced with Oasis, Allure will provide a boost to our revenue yields. With her arrival, the percentage of our brand’s capacity that is either Oasis or Freedom class will be over 33%.”
  • “We announced the name of our fifth and final Solstice class ship, Celebrity Reflection, slated to launch in fall 2012. In addition, we will be Solsticizing both Infinity in fall of 2011 and Summit in Q1 of 2012.”
  • “When Silhouette comes out next year, which will be our newest Solstice class ship, it will go right into service in Europe.”
  • “We said previously that we don’t expect to do any more Oasis class ships.  We do think that the rate of growth of new capacity has slowed.”
  • “But at this point, it’s getting more likely that [building a ship] would be something more like 2014.”