Trifecta Goals and Investment Grade
Q: Are you achieving your Trifecta goals, and what's next?
A: Management confirmed they're close to achieving their Trifecta goals, including EPS over $10 per share. They view these goals as "base camp" and plan to set new financial performance targets to navigate toward. They've focused on returning to investment-grade metrics, repaying roughly $4 billion of debt in 2023. They aim to continue strengthening the balance sheet and consider returning capital to shareholders as they approach investment-grade levels.

Yield Guidance and Expectations
Q: What's the breakdown of your yield guidance, and is there potential slowing?
A: Management noted that 2023 had strong yield growth driven by pricing and load factor recovery. While Q1 yields are particularly strong, they foresee moderate yield growth and strong cost control continuing into Q2 and beyond. There's no concern of slowdown, with booking environment and onboard spend pointing upwards ,. They expect yields to grow across like-for-like comparisons, new hardware, and onboard spend.

Global Minimum Tax Impact
Q: How might the global minimum tax affect you?
A: The global minimum tax is on their radar, but if they take no action, it wouldn't impact them until 2026. They believe they can mitigate the majority of the potential impact through certain measures.

Cost Guidance and Expectations
Q: What's driving your 4% cost guidance, and what's the long-term outlook?
A: The 3.75% to 4.25% cost increase is driven by increased dry dock days and the startup of HideAway Beach operations, which, while accretive to margins, don't add APCDs. Costs will be higher in the first half due to dry docks but are expected to benefit in the second half from lower dry dock days and the addition of Utopia. Their formula remains moderate capacity growth, moderate yield growth, and strong cost control.

Closing Gap to Land-Based Vacations
Q: Can yield growth be higher as you close the gap to land-based vacations?
A: They've made progress reducing the 40–45% price gap to land-based vacations, with yields up 13.5% and APDs up 16% in 2023. Management is focused on closing this gap by delivering innovative experiences comparable or superior to land-based options, expecting this to further enhance yield growth ,.

Icon of the Seas Impact
Q: How is Icon of the Seas being received compared to past new ships?
A: The reception to Icon has been exceptional, outperforming previous launches like Oasis and Quantum. Metrics show Icon has doubled or tripled the response, with phenomenal bookings and high pricing. It's attracting significant demand from both customers and trade partners, positioning it as a game-changer.

Booking Position and Strategy
Q: How booked are you, and is your yield curve optimal?
A: They are meaningfully more booked than last year and even compared to 2019 highs, both in volume and pricing. They utilize advanced yield management systems to maximize share of wallet and are focused on removing friction in the booking experience, without being concerned about booking too far out.

Digital Investments and Direct Bookings
Q: How are digital investments affecting direct bookings?
A: They aim to reduce friction in the shopping experience using technology like AI to curate offerings. While channel agnostic, enhancing digital capabilities has led to guests spending 2.5 times more onboard when they book ahead. Their focus is on keeping customers within their ecosystem, regardless of the booking channel.