Once Royal Caribbean moved past the mess that was the Covid pandemic, the cruise line has been flying high, so to speak.
It’s about to introduce Star of the Seas, the second ship in its new Icon Class. The first ship, Icon of the Seas, set all sorts of records when it came to sales.
Related: Las Vegas Strip: IRS quietly raised jackpot handpay limits
The largest ship in the world was sailing at over 110% capacity, pretty much at its max. It also commanded incredibly high prices.
Icon set a new standard for destination cruise ships. It literally offers so much that there’s no real reason to get off the ship, and it’s actually hard to experience everything in a single week.
Royal Caribbean has also had a lot of success with a fairly controversial decision it made. The cruise line has been using its two newest Oasis Class ships, formerly the largest class of cruise ships in the world, strictly for three- and four-night “weekend” cruises.
The cruise line arguably left some money on the table when it introduced Utopia of the Seas last year sailing short itineraries.
That was a bold bet by the cruise line to use some of its newest hardware as a lure for first-time cruisers. The theory, and it appears to have worked, was to put your best foot forward in order to get repeat business.
That appears to have worked as well.
Sign up for the Come Cruise With Me newsletter to save money on your next (or your first) cruise.
Perfect Day at CocoCay has been a huge success.
Image source: Daniel Kline/ComeCruiseWithMe
Royal Caribbean has gone all in on private destinations
Perfect Day at CocoCay has also become a massive success. Royal Caribbean rewrote the script for private islands when it redid CocoCay.
Instead of just offering a glorified beach day, the cruise line added all sorts of experiences. There’s an included pool (a massive one), an extra-fee waterpark, an added-fee beach club, and an adult-only area that also costs extra.
The cruise line has been getting premium prices for all of its add-ons. It also still offers lots of options for people who just want to hang out at the pool or enjoy a classic beach day.
Now, Royal Caribbean in the process of opening two Beach Club locations, one in Nassau, and the other in Cozumel. These are both markets where cruisers often book a private beach club day.
The Beach Clubs appear to offer a better experience than most of those private clubs or hotels selling day passes, albeit at what appears to be a premium price.
The cruise line is also building a second Perfect Day in Costa Maya, which like CocoCay, would offer free access along with paid add-ons.
Royal Caribbean’s long-term needle is pointing up
Royal Caribbean stock has been trading near its all-time highs. That’s because the company has been delivering consistently strong quarters.
That may weaken a little bit in the fourth quarter. Consumers do appear to have gotten a little bit more cautious with their cash, and there are some good deals to be had on fourth-quarter cruises.
In addition, the free casino cabin offers from Royal Caribbean have been especially generous through the end of the year. That’s a small yellow flag, but it does not seem like overall bookings are going to take much of a hit.
Prices may have leveled off, at least for a while, but that’s not entirely a negative. Royal Caribbean cruises remain an incredibly good value when compared to, say, a week at Disney World or a week on a Disney cruise ship.
The current wary economy has produced some cautious consumers. Those people may not book a cruise where they have to pay the full amount upfront.
Instead, booking patterns have suggested that people are booking farther out. That gives them time to pay off the balance while also giving them something to look forward to.
Royal Caribbean’s seas might be a bit choppy for the next few months, but CEO Jason Liberty has made all the right moves. This is a stock that should go into your portfolio and sit there for the next 20 years.
The company has built an incredibly loyal following that prizes taking cruise vacations. Its audience appears to be increasing and getting younger, which should power the company for quite a long period.
It will build on that in the years ahead with more new Icon Class ships, new private destinations, the upcoming Celebrity Xcel, and Celebrity’s entree into river cruising.
(The Arena Group will earn a commission if you book a cruise.)
Make a free appointment with Come Cruise With Me’s Travel Agent Partner, Postcard Travel, or email Amy Post at [email protected] or call or text her at 386-383-2472.