Q4 Yield Guidance & 2025 Bookings
Q: Does lower Q4 yield guidance indicate slowing bookings? Any changes in 2025 bookings?
A: Management emphasized that despite an implied 5% yield growth in Q4 " , their yields for the back half of the year are up 25% versus 2019. " The yield improvement is driven entirely by price as load factors are already at full capacity. " For 2025, they are taking more bookings now than for 2024, with pricing up and increasing trends continuing. " They feel very good about 2025, with pricing continuing to accelerate. "

Dividend and Shareholder Returns
Q: Plans for shareholder returns beyond reinstated dividend?
A: Management stated that reinstating the dividend reflects achieving their target debt-to-EBITDA ratio of 3.5x. " Historically, they have used both dividends and share repurchases to return capital, and they expect to focus on growing both over time. " They aim to maintain a competitive dividend and opportunistically buy back shares while continuing to strengthen the balance sheet. "

China Deployment Strategy
Q: Does moving Ovation from China indicate weakness there?
A: Management believes in the long-term potential of the China market and stated that Spectrum of the Seas operating out of Shanghai is performing well. " However, the American market is currently stronger, leading them to deploy Ovation to California to maximize performance. " This move does not indicate a shift away from China; they remain committed and plan future deployments there. "

Yield Management Strategy
Q: Did you leave money on the table this year? Changes in yield strategy for next year?
A: Management acknowledged they are 400+ basis points ahead of their initial yield expectations for the year due to accelerated demand and pricing. " This suggests they may have left money on the table and were too booked going into peak booking periods. " They use sophisticated revenue management tools to optimize revenue and will adjust strategies as needed to maximize yields in 2025. "

Margin Outlook and Growth
Q: Where do margins go from here after exceeding 2019 levels?
A: Management highlighted that growing yields faster than costs drives significant margin expansion. " A 1% increase in yields equates to $120 million, while a 1% change in costs is about half that. " They aim to continue disciplined growth, capturing more share of the $1.9 trillion vacation market, which will drive further margin and return improvements. "

Demand Strength and Pricing Sensitivity
Q: Any pricing sensitivity in 2025 bookings amid land-based softness?
A: Management is not seeing pricing sensitivity; guests are booking further out and willing to pay more. " Pricing continues to increase into 2025 and 2026 across all products, including ultra-luxury. " The 20% value gap compared to land-based vacations offers a competitive advantage shielding them from land-based market noise. "

New Ship Orders and Smaller Vessels
Q: Are you planning longer-term orders, possibly smaller ships for new markets?
A: Management feels confident about their growth path and is always designing next classes of ships for all brands. " They consider replacing older ships reaching 30-35 years and expanding into unique destinations that require smaller vessels. " The focus is less on sourcing markets and more on diversifying their global footprint across 1,000 destinations. "

Allocating New Ships to Short Sailings
Q: Strategy behind assigning new hardware to short getaways vs. week-long cruises?
A: Short cruises serve as an important on-ramp for new-to-cruise customers. " Deploying ships like Utopia to short sailings has stimulated high demand and exceptional onboard revenue. " They see significant upswing in repeat business from guests experiencing these ships and aim to offer experiences that cater to multiple generations. "

Paradise Island Positioning
Q: How does Paradise Island differ from CocoCay?
A: Paradise Island is positioned as another incredible Beach Club experience complementing Perfect Day at CocoCay. " It's a full purchase experience with a ticket price to enter, whereas CocoCay offers many complementary experiences. " The demographics are the same, and it fits well into both short and long itineraries. "