Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from Debt [USD, Millions]

Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

587f423edd9fb5127ab2433462eb538621481db1e357c437db10d21c3fbd2559

| Metric [Unit: USD Billion] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Passenger Ticket Revenues  | **1.7**  **[0000884887-23-000003_a10k2022earningsrelease8-k.htm:16]**  | **1.9**  **[0000884887-23-000018_rcl-20230331.htm:45]**  | **2.44**  **[0000884887-23-000044_rcl-20230630.htm:49]**  | **2.941**  **[0000884887-23-000056_rcl-20230930.htm:50]**  | N/A     | **2.5**  **[0000884887-24-000108_rcl-20240331.htm:37]**  | **2.887**  **[0000884887-24-000130_rcl-20240630.htm:41]**  | **3.471**  **[0000884887-24-000147_rcl-20240930.htm:43]**  |
| Onboard and Other Revenues | **0.9015**  **[0000884887-23-000003_a10k2022earningsrelease8-k.htm:16]**  | **0.9886**  **[0000884887-23-000018_rcl-20230331.htm:45]**  | **1.08**  **[0000884887-23-000044_rcl-20230630.htm:49]**  | **1.219**  **[0000884887-23-000056_rcl-20230930.htm:50]**  | N/A     | **1.2**  **[0000884887-24-000108_rcl-20240331.htm:37]**  | **1.223**  **[0000884887-24-000130_rcl-20240630.htm:41]**  | **1.415**  **[0000884887-24-000147_rcl-20240930.htm:43]**  |
| Total Revenues             | **2.6**  **[0000884887-23-000003_a10k2022earningsrelease8-k.htm:0]**  | **2.9**  **[0000884887-23-000018_rcl-20230331.htm:45]**  | **3.52**  **[0000884887-23-000044_rcl-20230630.htm:49]**  | **4.160**  **[0000884887-23-000056_rcl-20230930.htm:50]**  | N/A     | **3.7**  **[0000884887-24-000108_rcl-20240331.htm:37]**  | **4.110**  **[0000884887-24-000130_rcl-20240630.htm:41]**  | **4.886**  **[0000884887-24-000147_rcl-20240930.htm:43]**  |

982019bf55433470e0baf906562cd89198d0b6347694f39c8675f37ff4a3b9ec

| Geographical Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|
| North America (millions) | **$2,193**  **[0000884887-23-000018_rcl-20230331.htm:7]**  | **$2,137**  **[0000884887-23-000044_rcl-20230630.htm:9]**  | **$2,275**  **[0000884887-23-000056_rcl-20230930.htm:10]**  | N/A | **$2,690**  **[0000884887-24-000108_rcl-20240331.htm:7]**  | **$2,575**  **[0000884887-24-000130_rcl-20240630.htm:9]**  | **$2,862**  **[0000884887-24-000147_rcl-20240930.htm:9]**  |
| Asia/Pacific (millions) | **$333**  **[0000884887-23-000018_rcl-20230331.htm:7]**  | **$169**  **[0000884887-23-000044_rcl-20230630.htm:9]**  | **$118**  **[0000884887-23-000056_rcl-20230930.htm:10]**  | N/A | **$506**  **[0000884887-24-000108_rcl-20240331.htm:7]**  | **$235**  **[0000884887-24-000130_rcl-20240630.htm:9]**  | **$156**  **[0000884887-24-000147_rcl-20240930.htm:9]**  |
| Europe (millions) | **$2**  **[0000884887-23-000018_rcl-20230331.htm:7]**  | **$841**  **[0000884887-23-000044_rcl-20230630.htm:9]**  | **$1,375**  **[0000884887-23-000056_rcl-20230930.htm:10]**  | N/A | **$21**  **[0000884887-24-000108_rcl-20240331.htm:7]**  | **$841**  **[0000884887-24-000130_rcl-20240630.htm:9]**  | **$1,435**  **[0000884887-24-000147_rcl-20240930.htm:9]**  |
| Other Regions (millions) | **$214**  **[0000884887-23-000018_rcl-20230331.htm:7]**  | **$227**  **[0000884887-23-000044_rcl-20230630.htm:9]**  | **$181**  **[0000884887-23-000056_rcl-20230930.htm:10]**  | N/A | **$322**  **[0000884887-24-000108_rcl-20240331.htm:7]**  | **$278**  **[0000884887-24-000130_rcl-20240630.htm:9]**  | **$184**  **[0000884887-24-000147_rcl-20240930.htm:9]**  |

f50ffda115fa3d55d036f42db9dcf22f3814ffc1ce0d748e3f42134441d60540

Royal Caribbean Cruises Ltd. (RCL) is a leading global cruise company that owns and operates three main cruise brands: Royal Caribbean International, Celebrity Cruises, and Silversea Cruises, collectively referred to as their "Global Brands" **[0000884887-24-000075_rcl-20231231.htm:3]** **[0001104659-24-029462_tm247502-1_s3asr.htm:5]**. Additionally, RCL holds a 50% joint venture interest in TUI Cruises GmbH, which operates the German brands TUI Cruises and Hapag-Lloyd Cruises, known as their "Partner Brands" **[0000884887-24-000108_rcl-20240331.htm:5]** **[0000884887-24-000075_rcl-20231231.htm:3]**. The company generates revenue primarily from passenger ticket sales and onboard services, offering itineraries to over 1,000 destinations across all seven continents **[0000884887-24-000108_rcl-20240331.htm:5]** **[0001104659-24-029462_tm247502-1_s3asr.htm:5]** **[0000884887-24-000147_rcl-20240930.htm:36]** **[0000884887-24-000075_rcl-20231231.htm:74]**.

1. **Passenger Ticket Revenues** - Generates income from the sale of cruise tickets and air transportation to and from the ships.
2. **Onboard and Other Revenues** - Includes sales of goods and services not included in ticket prices, such as casino operations, vacation protection insurance, and fees for operating certain port facilities.
3. **Global Brands** - Operates the cruise brands Royal Caribbean International, Celebrity Cruises, and Silversea Cruises, providing diverse itineraries and innovative ships.
4. **Partner Brands** - Involves a 50% joint venture interest in TUI Cruises GmbH, operating the German brands TUI Cruises and Hapag-Lloyd Cruises.

f4ed3efa77ce34dfe743587dddd963d97f37131485c83ef1c4f4c2624730c0d1

1. As you expand your private destinations with projects like Perfect Day Mexico and the World Beach Clubs, how are you mitigating the risks associated with significant capital investments if consumer demand shifts or economic conditions change?
2. Given your expectation for earnings in 2025 to start with a $14 handle, in the context of potential macroeconomic headwinds, how resilient is your projected earnings growth to a possible slowdown in consumer spending on leisure travel?
3. With net yields up 25% compared to 2019 levels and significant yield growth over the last two years, to what extent do you believe this rate of yield growth is sustainable, and how might continued price increases impact demand and occupancy levels?
4. Considering your plans for moderate capacity growth through new ship orders and fleet expansion, how are you assessing the potential risk of overcapacity in the cruise industry, and what contingency plans are in place if demand does not meet expectations?
5. You've made progress in deleveraging and have returned to an unsecured capital structure, yet you're also increasing investments in new ships and private destinations; how do you balance the need for capital investment with shareholder returns, and how might your capital allocation strategy change if economic conditions deteriorate?

63083480c6c15e9dd4daacf814b8cb2df044fae5ce3d52445ee26a7662fe52c3

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

8e3bdeaeefc63b40edcc89c4d2097fe0000e8c894d0c17febafeed776b9cb804

63eaed312d23d640abcc3fb1992a3f2d58223533a792c876218b63deb15d9262

Passenger Ticket Revenues

Onboard and Other Revenues

- Concession Revenues

Total Revenue

6f22a3c3e6f72f584d4d14feefdd109c12fd62650628037ce0a80b51b947a73e

0bef2c88fa3e35d3ccb6aead86af93df03b330bd5f1a0431eac1cb0b3323ecbe

North America

Asia/Pacific

Europe

Other Regions

Total by Itinerary

Other Revenues

3468699bcce2dc480dcedc1a3830fd58435baac7787048d5cb552ea8a8c33eed

- Carnival Corporation & plc (owns Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O Cruises, Princess Cruises, and Seabourn)  **[0000884887-24-000075_rcl-20231231.htm:8]** 
- Disney Cruise Line  **[0000884887-24-000075_rcl-20231231.htm:8]** 
- MSC Cruises  **[0000884887-24-000075_rcl-20231231.htm:8]** 
- Norwegian Cruise Line Holdings Ltd (owns Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises)  **[0000884887-24-000075_rcl-20231231.htm:8]** 
- Virgin Voyages  **[0000884887-24-000075_rcl-20231231.htm:8]** 

de312be554b163787993acbfb3ebd5787da90b512b69bba5984cf6b81b4dcc4a

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** Q4 2024 and FY 2024

#### Guidance:
1. **Full Year 2024 (FY 2024):**
   - **Net Yield Growth:** Up **10.8% to 11.3%**  **[RCL_3404380_4]** **[RCL_3404380_1]** .
   - **Net Cruise Costs (excluding fuel):** Up **6.2% to 6.7%**  **[RCL_3404380_4]** .
   - **Fuel Expense:** **$1.16 billion**, 61% hedged  **[RCL_3404380_4]** .
   - **Adjusted EPS:** **$11.57 to $11.60**  **[RCL_3404380_4]** **[RCL_3404380_1]** .

2. **Fourth Quarter 2024 (Q4 2024):**
   - **Net Yields:** Up **5.1% to 5.6%**  **[RCL_3404380_4]** **[RCL_3404380_1]** .
   - **Net Cruise Costs (excluding fuel):** Up **11.6% to 12.1%**  **[RCL_3404380_4]** .
   - **Adjusted EPS:** **$1.40 to $1.45**  **[RCL_3404380_4]** .

3. **2025 Outlook:**
   - **Capacity Growth:** Up **5%**  **[RCL_3404380_5]** .
   - **Adjusted EPS for 2025:** Expected to start with a **$14 handle**  **[RCL_3404380_2]** **[RCL_3404380_8]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** Q3 2024 and FY 2024

#### Guidance:
1. **Full Year 2024 (FY 2024):**
   - **Adjusted EPS:** **$11.35 to $11.45**  **[RCL_3394309_6]** .
   - **Net Yields:** Up **10.4% to 10.9%**  **[RCL_3394309_5]** .
   - **Net Cruise Costs Excluding Fuel:** Up approximately **6%**  **[RCL_3394309_5]** .
   - **Fuel Expense:** **$1.17 billion**, 61% hedged  **[RCL_3394309_6]** .

2. **Third Quarter 2024 (Q3 2024):**
   - **Adjusted EPS:** **$4.90 to $5.00**  **[RCL_3394309_6]** .
   - **Net Yields:** Up **6.5% to 7%**  **[RCL_3394309_6]** .
   - **Net Cruise Costs Excluding Fuel:** Up **4.7% to 5.2%**  **[RCL_3394309_6]** .
   - **APCDs:** **13.4 million**  **[RCL_3394309_6]** .

3. **Fourth Quarter 2024 (Q4 2024):**
   - **Yield Growth:** Mid-single-digit growth  **[RCL_3394309_2]** .

4. **Leverage:** Below **3.5x**  **[RCL_3394309_6]** .
5. **Dividend:** **$0.40 per share**  **[RCL_3394309_6]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** FY 2024

#### Guidance:
1. **Full Year 2024 (FY 2024):**
   - **Net Cruise Costs (excluding fuel):** Up approximately **5.5%**  **[RCL_3380749_6]** .
   - **Fuel Expense:** **$1.18 billion**, 61% hedged  **[RCL_3380749_6]** .
   - **Adjusted EPS:** **$10.70 to $10.90**  **[RCL_3380749_6]** .
   - **Net Yields:** Up **9% to 10%**  **[RCL_3380749_5]** .

2. **Second Quarter 2024 (Q2 2024):**
   - **APCDs:** **12.2 million**  **[RCL_3380749_6]** .
   - **Net Yields:** Up **10.2% to 10.7%**  **[RCL_3380749_6]** .
   - **Net Cruise Costs (excluding fuel):** Up **7.4% to 7.9%**  **[RCL_3380749_6]** .
   - **Adjusted EPS:** **$2.65 to $2.75**  **[RCL_3380749_6]** .

3. **Balance Sheet and Financial Strategy:**
   - **Liquidity:** **$3.7 billion**  **[RCL_3380749_6]** .
   - **Leverage:** Below mid-**3x**  **[RCL_3380749_6]** .
   - **Credit Rating:** S&P **BB+**, Moody's **Ba2**  **[RCL_3380749_6]** .

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023
- **Guided Period:** FY 2024 and Q1 2024

#### Guidance:
1. **Full Year 2024 (FY 2024):**
   - **Net Yields:** Up **5.25% to 7.25%**  **[RCL_3371566_7]** .
   - **Net Cruise Costs, Excluding Fuel:** Up **3.75% to 4.25%**  **[RCL_3371566_7]** .
   - **Fuel Expense:** **$1.16 billion**, 61% hedged  **[RCL_3371566_7]** .
   - **Adjusted EPS:** **$9.50 to $9.70**  **[RCL_3371566_7]** .
   - **Capacity Growth:** Up **8.5%**  **[RCL_3371566_6]** .

2. **First Quarter 2024 (Q1 2024):**
   - **Net Yields:** Up approximately **15%**  **[RCL_3371566_7]** .
   - **Net Cruise Costs, Excluding Fuel:** Up **7.1% to 7.6%**  **[RCL_3371566_7]** .
   - **Adjusted EPS:** **$1.10 to $1.20**  **[RCL_3371566_7]** .

2996ebe9df46e538331882eb4f401f6eb1c674f3b86dbf3cb3f79011900ed69a

| Name                | Position                                      | Start Date       | Short Bio                                                                                                                                                                                                 |
|---------------------|-----------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Jason T. Liberty    | President and Chief Executive Officer         | January 2022     | Jason T. Liberty has served as the President and CEO of RCL since January 2022. He joined the company in 2005 and has held several roles, including Executive Vice President and CFO from 2017 to 2022  **[0000884887-24-000075_rcl-20231231.htm:32]** **[0001140361-24-020353_ny20022903x1_def14a.htm:13]** **[0001308179-23-000689_rcl4106121-def14a.htm:12]** .                                |
| Naftali Holtz       | Chief Financial Officer                       | January 2022     | Naftali Holtz has been the CFO of RCL since January 2022. He joined the company in 2019 after working at Goldman Sachs and is responsible for overseeing financial planning, risk management, and more  **[0000884887-24-000075_rcl-20231231.htm:32]** .                                      |
| Michael W. Bayley   | President and CEO, Royal Caribbean International | December 2014    | Michael W. Bayley has been President and CEO of Royal Caribbean International since December 2014. He has been with Royal Caribbean for over 40 years, starting as an Assistant Purser  **[0000884887-24-000075_rcl-20231231.htm:32]** .                                                     |
| Laura Hodges Bethge | President, Celebrity Cruises                  | May 2023         | Laura Hodges Bethge has served as President of Celebrity Cruises since May 2023. She joined Royal Caribbean in 2000 and has held various leadership roles, including Executive Vice President of Shared Services Operations  **[0000884887-24-000075_rcl-20231231.htm:32]** .                |
| Harri U. Kulovaara  | Executive Vice President, Maritime            | January 2005     | Harri U. Kulovaara has been Executive Vice President, Maritime since January 2005. He is responsible for fleet design and newbuild operations and has been with Royal Caribbean since 1995  **[0000884887-24-000075_rcl-20231231.htm:33]** **[0000884887-23-000006_rcl-20221231.htm:33]** .                                              |
| R. Alexander Lake   | Chief Legal Officer and Secretary             | June 2021        | R. Alexander Lake has served as Chief Legal Officer and Secretary since June 2021. Before joining Royal Caribbean, he spent over 17 years at World Fuel Services Corporation  **[0000884887-24-000075_rcl-20231231.htm:33]** **[0000884887-23-000006_rcl-20221231.htm:33]** .                                                             |

ee7c0419def79087c0283c7bcd41f90ce28f9afc1dca81cddeb853ce32e77c0e

**Quarterly guidance for Q4 2024:**
- **Net Yields**: Up 5.1% to 5.6%  **[RCL_3404380_4]** **[RCL_3404380_1]** (no change from mid single-digit growth  **[RCL_3394309_2]** )  
- **Net Cruise Costs (excluding fuel)**: Up 11.6% to 12.1%  **[RCL_3404380_4]** (no prior guidance)  
- **Adjusted EPS**: $1.40 to $1.45  **[RCL_3404380_4]** (no prior guidance)

**Annual guidance for FY 2024:**
- **Adjusted EPS**: $11.57 to $11.60  **[RCL_3404380_4]** **[RCL_3404380_1]** (raised from $11.35 to $11.45  **[RCL_3394309_6]** )  
- **Net Yield Growth**: Up 10.8% to 11.3%  **[RCL_3404380_4]** **[RCL_3404380_1]** (raised from 10.4% to 10.9%  **[RCL_3394309_5]** )  
- **Net Cruise Costs (excluding fuel)**: Up 6.2% to 6.7%  **[RCL_3404380_4]** (raised from ~6%  **[RCL_3394309_5]** )  
- **Fuel Expense**: $1.16 billion  **[RCL_3404380_4]** (lowered from $1.17 billion  **[RCL_3394309_6]** )

b1b5dd528b69879808c8ac7144970f838bccb93e882a17e6a6ed3b60a0c2131b

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 1989  **[0000884887-24-000075_rcl-20231231.htm:125]**  | Present  | Current auditor   |

aee35acfb91e2b58e8aa61e97076ad14bf4da83eb03d7862071f8592bc2710a4

- **Record-breaking demand** across all products and regions, with last week being the company's highest booking week ever during wave season, indicating strong consumer interest and potential for exceeding yield guidance.  **[RCL_3413398_13]**
- **Expansion into the river cruising market** with Celebrity River Cruises launching in 2027, presenting a significant growth opportunity by leveraging existing customer base and loyalty programs to increase customer lifetime value.  **[RCL_3413398_16]** **[RCL_3413398_9]**
- **Strong cost control and margin focus** leading to adjusted EPS guidance for 2025 of **$14.35 to $14.65**, even after **$0.65** headwind from FX and fuel, highlighting financial robustness and potential for exceeding earnings expectations.  **[RCL_3413398_11]**

e6c73f32890ac43a30726bdd019bdbcf3cd0d0473e4abc35c488438bff64d42c

- **Increasing Capital Expenditure (CapEx) Commitments May Strain Cash Flow and Increase Financial Risk**: Royal Caribbean Group has guided for **$5 billion in CapEx for 2025**, a significant step up from prior years, including **$1.6 billion in non-new build CapEx**. This substantial increase in spending could pressure free cash flow and potentially elevate financial risk if returns on these investments do not materialize as expected.  **[RCL_3413398_10]**
- **Risky Expansion into River Cruising with Elevated Costs**: The company's aggressive entry into river cruising involves an **initial order of 10 ships**, with plans to order more before the first ships are even operational. Management indicated that the **cost per berth is elevated** compared to ocean ships, which could impact profitability if demand does not meet expectations. The decision not to wait until 2027 to assess performance before ordering additional ships may add to the investment risk.  **[RCL_3413398_9]** **[RCL_3413398_14]**
- **Lower Yield Growth Guidance Indicates Potential Slowdown**: Royal Caribbean Group provided a **yield growth guidance of 2.5% to 4.5%** for 2025, which is significantly lower than the **11.6% yield growth in 2024** and **13.5% in 2023**. This deceleration in yield growth, despite capacity expansion, may suggest that the company is facing more challenging market conditions or pricing pressures.  **[RCL_3413398_7]**

aca4fa110415a52102292450a050669bf8e4f59ff7b43b29fa96dd2f08959171

1. **EPS and Yield Guidance**  
   **Q:** Is your EPS guidance conservative given headwinds?  
   **A:** Despite FX and fuel headwinds, we're confident in our EPS guidance midpoint of **$14.50**, which could have exceeded **$15** without these headwinds. We haven't included potential share repurchases, which would further boost EPS. Our teams have effectively leveraged scale to control costs.  **[RCL_3413398_11]** **[RCL_3413398_12]** 

2. **CapEx and Free Cash Flow**  
   **Q:** How should we think about future CapEx requirements?  
   **A:** For 2025, our CapEx is guided at **$5 billion**, reflecting ship deliveries like Star of the Seas and Celebrity Xcel, and investments in private destinations such as Costa Maya and Nassau Beach Club. We have committed financing for these projects, and our significant cash flow generation allows us to invest in key priorities while maintaining an investment-grade balance sheet.  **[RCL_3413398_10]** 

3. **River Cruise Expansion**  
   **Q:** What's your plan and investment in river cruises?  
   **A:** We've placed an initial order of **10 river ships**, starting deliveries in 2027 with a couple of ships, and ramping up to **4 per year**. The cost per berth is elevated but much less than ocean ships, making this a scalable opportunity with high yield and margin potential. We're committed to this market and won't wait until 2027 to order more ships.  **[RCL_3413398_9]** **[RCL_3413398_14]** 

4. **Cost Control Efforts**  
   **Q:** Can you explain your cost guidance shape?  
   **A:** Our cost cadence follows dry dock schedules, with higher costs in Q2 and Q3, and benefits from significant capacity growth in Q4. We've leveraged scale, leading to effective cost control and an improved cost guide for the year.  **[RCL_3413398_15]** **[RCL_3413398_11]** 

5. **Demand Trends and Market Share**  
   **Q:** Where are you seeing acceleration globally?  
   **A:** Demand is strong across all products and regions, including the Caribbean, Alaska, Europe, Southeast Asia, and even China. Our assets like Perfect Day and ships like Utopia and Icon are attracting high-quality demand from all generations. We're still in the early innings of capturing market share in the **$2 trillion** global vacation market.  **[RCL_3413398_13]** 

6. **Private Destinations Impact**  
   **Q:** How will Nassau Beach Club affect costs and margins?  
   **A:** Nassau Beach Club will open in December as an all-inclusive package. While its volume will reach **1–1.5 million** guests when fully operational, compared to **3.5 million** at CocoCay, it's a very efficient operation with attractive margins. It's expected to be a very profitable business that complements CocoCay.  **[RCL_3413398_17]** **[RCL_3413398_18]** 

7. **Loyalty Program Success**  
   **Q:** Any impact from cross-brand loyalty programs?  
   **A:** Our reciprocity program has been immensely successful, making guests more likely to stay within our ecosystem. We've been incredibly surprised at how quickly guests have embraced it, resulting in significantly more repeat guests than planned.  **[RCL_3413398_19]** 

88de0345e1352957a7c7156caabf6983389bac1cb2d52d7cf9fd054bef9321eb

Royal Caribbean’s Q4 2024 results reveal record-breaking demand and a robust 2025 EPS guidance of $14.35–$14.65, driven by cost controls. However, yield growth is set to slow to 2.5%–4.5% in 2025 vs. 11.6% in 2024, raising questions about sustainability.

f07a345d7c818b7e9b7896b61eb97491fba88aa40e28da27228f3e2aa3838ceb

**Quarterly guidance for Q1 2025:**  
- **Net yields**: 4.75% to 5.25%  **[RCL_3413398_6]**  (lowered from 5.1% to 5.6%  **[RCL_3404380_4]** )  
- **Net Cruise Costs (excluding fuel)**: up 1.6% to 2.1%  **[RCL_3413398_6]**  (lowered from up 11.6% to 12.1%  **[RCL_3404380_4]** )  
- **Adjusted EPS**: $2.43 to $2.53  **[RCL_3413398_6]**  (raised from $1.40 to $1.45  **[RCL_3404380_4]** )  
- **Capacity Growth**: up 3%  **[RCL_3413398_6]**  (no prior guidance)

**Annual guidance for FY 2025:**  
- **Adjusted EPS**: $14.35 to $14.65  **[RCL_3413398_6]**  (raised from $11.57 to $11.60  **[RCL_3404380_4]** **[RCL_3404380_1]** )  
- **Yield Growth**: 2.5% to 4.5%  **[RCL_3413398_6]**  (lowered from 10.8% to 11.3%  **[RCL_3404380_4]** **[RCL_3404380_1]** )  
- **Net Cruise Costs (excluding fuel)**: flat to up 1%  **[RCL_3413398_6]**  (lowered from up 6.2% to 6.7%  **[RCL_3404380_4]** )  
- **Fuel Expense**: $1.17B  **[RCL_3413398_6]**  (raised from $1.16B  **[RCL_3404380_4]** )  
- **Capacity Growth**: 5.4%  **[RCL_3413398_5]**  (raised from 5%  **[RCL_3404380_5]** )  
- **Earnings Growth**: 23% year-over-year  **[RCL_3413398_6]**  (no prior guidance)  
- **Adjusted EBITDA Growth**: 13%  **[RCL_3413398_6]**  (no prior guidance)  
- **Gross EBITDA Margin**: +150 basis points  **[RCL_3413398_6]**  (no prior guidance)  
- **Leverage**: mid- to high 2x  **[RCL_3413398_6]**  (no prior guidance)  
- **Capital Expenditures**: $5B  **[RCL_3413398_6]** **[RCL_3413398_10]**  (no prior guidance)  

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| Year  | Amount Due (in billions) | Debt Type                  | Interest Rate (%) | % of Total Debt                          |
|-------|--------------------------|----------------------------|-------------------|------------------------------------------|
| 2024  | 1.868                   | Current Portion of Long-Term Debt | N/A               | 9.1% = (1.868 / 20.49) * 100 **[0000884887-24-000147_rcl-20240930.htm:3]** **[0000884887-24-000147_rcl-20240930.htm:23]** |
| 2031  | 1.5                     | Senior Unsecured Notes     | 5.63              | 7.3% = (1.5 / 20.49) * 100 **[0000884887-24-000147_rcl-20240930.htm:15]**       |
| 2032  | 1.25                    | Senior Unsecured Notes     | 6.25              | 6.1% = (1.25 / 20.49) * 100 **[0000884887-24-000147_rcl-20240930.htm:15]**      |
| 2033  | 2.0                     | Senior Unsecured Notes     | 6.00              | 9.8% = (2.0 / 20.49) * 100 **[0000884887-24-000147_rcl-20240930.htm:15]**       |
| 2037  | N/A                     | Various Long-Term Debt     | N/A               | N/A                                      |

ffa3708470d8adfcace6b8b634b83e4cb41ece2596540ce1ba81650cfb8537ce

b1efea5cdf7af37551f6d509f6c1e8fc4ad32eac6cf5525ecc21ab7bba84c002

- **Shift in Deployment Due to Underperformance in China Market:** Royal Caribbean is moving the Ovation of the Seas from China to the West Coast of the U.S., indicating that the China market has not yet reached expected levels, potentially impacting growth opportunities in that region.  **[RCL_3394309_8]**
- **Slowing Yield Growth in the Fourth Quarter:** The company's guidance reflects a 5% yield growth in Q4, showing a sequential decline that may signal bookings are slowing, which could affect future revenue growth.  **[RCL_3394309_7]** **[RCL_3394309_9]**
- **Potential Capital Expenditures for Aging Fleet:** Some ships are reaching 30-35 years of age and may need replacement, leading to significant capital expenditures that could pressure the company's financials.  **[RCL_3394309_16]**

f2824f87fedcc0bea4d9bb71260fef349843cf1c9fc472f9bd35ad9f0b7bd51a

- Royal Caribbean's new ships, such as the **Icon of the Seas**, are generating unprecedented demand and pricing power, with executives expressing strong optimism about future **yield growth** and **upside potential**.  **[RCL_3371566_19]** **[RCL_3371566_20]**
- The company's strategic focus on innovative experiences, including new ships and private destinations like **Perfect Day at CocoCay** and the upcoming **HideAway Beach**, positions it well to attract new customers and capture market share from land-based vacations.  **[RCL_3371566_21]** **[RCL_3371566_20]**
- Investments in digital capabilities are enhancing customer engagement and spending, with onboard revenue significantly boosted by pre-cruise bookings where customers spend **2.5x more** than those who do not pre-book.  **[RCL_3371566_17]**

30f5734a8b2ddf77816a6f589e0b351446ac4647773f0f24adec0b3bcf62ee84

- **Accelerating Demand and Strong Bookings Leading to Higher Pricing and Earnings Growth.** The company reports that bookings have been consistently outpacing last year, with April demand levels almost **double** that of the previous year, leading to higher pricing and a strong book position for 2024 and 2025. They note that a **1% shift** in market share is worth **11 Oasis-class ships** to them, highlighting the significant opportunity for growth.  **[RCL_3380749_11]**
- **Investments in New Ships and Destinations Driving High Margins and Returns.** Royal Caribbean's investments in new hardware, such as **Icon of the Seas**, and new private destinations, like the **Royal Beach Club in Paradise Island**, are yielding very high returns and expanding margins. These innovative offerings are differentiating their brand and enhancing guest experiences, positioning them to take market share from land-based vacations.  **[RCL_3380749_10]** ,  **[RCL_3380749_8]**
- **Strong Balance Sheet Improvement Facilitating Potential Return of Capital to Shareholders.** The company expects to reduce leverage below **3.5x** by the end of the year, and continues to focus on reducing debt and interest expense. This progress towards strengthening the balance sheet may allow for the re-establishment of competitive dividends and opportunistic share buybacks, which were part of their formula pre-COVID.  **[RCL_3380749_15]**

205f731a942e0872257e5fe86fdacd3a23c058d281f0df4785f4edaa156f56e8

- **Significant Capital Expenditures May Strain Financial Resources**: The company acquired the port for Perfect Day Mexico at a cost of **$292 million**, with additional development costs forthcoming, which could pressure capital resources.  **[RCL_3404380_7]**
- **Lack of Priority on Debt Reduction Could Raise Leverage Concerns**: Management indicated there is **no priority** on bringing debt down further outside of refinancing, which may raise concerns about the company's leverage profile.  **[RCL_3404380_23]**
- **Potential Cost Pressures from Ongoing Investments**: Continued investments in new projects could lead to **cost pressures** and introduce "noise" in financial numbers, potentially impacting margins.  **[RCL_3404380_21]**

3040047b965f942d0d7e6fcb5a937df7b72bbd37436920cc1943a9c397af6a22

- **Royal Caribbean (RCL) is experiencing strong demand with yields up 25% versus 2019 and operating at full capacity, with continued pricing power into 2025, demonstrating the ability to raise prices and improve profitability.**  **[RCL_3394309_7]** **[RCL_3394309_10]**
- **The company is successfully targeting new customer segments, including younger generations and new-to-cruise customers, through strategic deployment of new ships like Utopia and Icon, leading to exceptional demand, high customer satisfaction, and strong onboard revenue growth.**  **[RCL_3394309_11]**
- **RCL has returned to strong financial health, achieving target leverage ratios below 3.5x debt-to-EBITDA, reinstating a quarterly dividend, and potentially pursuing additional shareholder returns, indicating a robust financial position and commitment to shareholder value.**  **[RCL_3394309_14]**

8e0a9b240cfcfba95f7095210cdfec22fc87e0774a12bd095e02030f52bf4412

- The introduction of the EU Emissions Trading Scheme (ETS) in 2024 will apply to **40%** of Royal Caribbean's European itineraries, which could impact earnings.  **[RCL_3371566_7]**
- Net cruise costs, excluding fuel, are expected to increase by **3.75% to 4.25%** in 2024, partly due to increased dry dock days and operations of HideAway Beach, which will weigh on costs, especially in the **first half of the year**.  **[RCL_3371566_3]** ,  **[RCL_3371566_15]**
- The global minimum tax, set to impact the company in **2026**, could affect profitability if mitigation efforts are not sufficient.  **[RCL_3371566_12]**

be98924dd1fdc47f5b4268e4704d1aa20a9076c31bc50930a7bdb37f886b406f

1. **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**  **[RCL_3394309_7]** , their yields for the back half of the year are up **25% versus 2019**.  **[RCL_3394309_7]**  The yield improvement is driven entirely by price as load factors are already at full capacity.  **[RCL_3394309_7]**  For 2025, they are taking more bookings now than for 2024, with pricing up and increasing trends continuing.  **[RCL_3394309_7]**  They feel very good about 2025, with pricing continuing to accelerate.  **[RCL_3394309_7]** 

2. **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**.  **[RCL_3394309_14]**  Historically, they have used both dividends and share repurchases to return capital, and they expect to focus on growing both over time.  **[RCL_3394309_14]**  They aim to maintain a competitive dividend and opportunistically buy back shares while continuing to strengthen the balance sheet.  **[RCL_3394309_14]** 

3. **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.  **[RCL_3394309_8]**  However, the American market is currently stronger, leading them to deploy Ovation to California to maximize performance.  **[RCL_3394309_8]**  This move does not indicate a shift away from China; they remain committed and plan future deployments there.  **[RCL_3394309_8]** 

4. **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.  **[RCL_3394309_15]**  This suggests they may have left money on the table and were too booked going into peak booking periods.  **[RCL_3394309_15]**  They use sophisticated revenue management tools to optimize revenue and will adjust strategies as needed to maximize yields in 2025.  **[RCL_3394309_15]** 

5. **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.  **[RCL_3394309_13]**  A **1% increase in yields** equates to **$120 million**, while a **1% change in costs** is about half that.  **[RCL_3394309_13]**  They aim to continue disciplined growth, capturing more share of the **$1.9 trillion** vacation market, which will drive further margin and return improvements.  **[RCL_3394309_13]** 

6. **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.  **[RCL_3394309_10]**  Pricing continues to increase into **2025 and 2026** across all products, including ultra-luxury.  **[RCL_3394309_10]**  The **20% value gap** compared to land-based vacations offers a competitive advantage shielding them from land-based market noise.  **[RCL_3394309_10]** 

7. **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.  **[RCL_3394309_16]**  They consider replacing older ships reaching **30-35 years** and expanding into unique destinations that require smaller vessels.  **[RCL_3394309_16]**  The focus is less on sourcing markets and more on diversifying their global footprint across **1,000 destinations**.  **[RCL_3394309_16]** 

8. **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.  **[RCL_3394309_11]**  Deploying ships like **Utopia** to short sailings has stimulated high demand and exceptional onboard revenue.  **[RCL_3394309_11]**  They see significant upswing in repeat business from guests experiencing these ships and aim to offer experiences that cater to multiple generations.  **[RCL_3394309_11]** 

9. **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.  **[RCL_3394309_17]**  It's a full purchase experience with a ticket price to enter, whereas CocoCay offers many complementary experiences.  **[RCL_3394309_17]**  The demographics are the same, and it fits well into both short and long itineraries.  **[RCL_3394309_17]** 

d8de3a451c9f3c1b2241b68063064dfdeea227868670b2e21756721249f0cd02

- **Rising operating costs are expected to pressure margins**, with full year net cruise costs excluding fuel projected to increase by approximately 5.5%, including a 310 basis point impact from increased dry dock days and the operations of Hideaway Beach. The cost metric is up 150 basis points compared to prior guidance, partly due to lower Available Passenger Cruise Days (APCDs) from canceled Red Sea sailings and higher noncash stock-based compensation.  **[RCL_3380749_6]**
- **Geopolitical risks are causing itinerary disruptions**, as the company had to reroute spring repositioning cruises and has contingency plans for other sailings affected by the situation in the Red Sea. This includes a reduction in APCDs and potential revenue impacts.  **[RCL_3380749_2]** **[RCL_3380749_6]**
- **Heavy reliance on the Caribbean market may pose concentration risks**, with the Caribbean representing over **55%** of deployment in 2024. Any slowdown or disruptions in this key market could significantly affect the company's performance.  **[RCL_3380749_2]**

e631178f9e649c18794747180d495d6381a1e71c9c3ac3925aafbcbe068345cb

1. **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**.  **[RCL_3371566_10]**  They view these goals as "base camp" and plan to set new financial performance targets to navigate toward.  **[RCL_3371566_10]**  They've focused on returning to investment-grade metrics, repaying roughly **$4 billion of debt** in 2023.  **[RCL_3371566_10]**  They aim to continue strengthening the balance sheet and consider returning capital to shareholders as they approach investment-grade levels.  **[RCL_3371566_10]** 

2. **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.  **[RCL_3371566_9]**  While Q1 yields are particularly strong, they foresee moderate yield growth and strong cost control continuing into Q2 and beyond.  **[RCL_3371566_9]**  There's no concern of slowdown, with booking environment and onboard spend pointing upwards  **[RCL_3371566_9]** ,.  **[RCL_3371566_13]**  They expect yields to grow across like-for-like comparisons, new hardware, and onboard spend.  **[RCL_3371566_13]** 

3. **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**.  **[RCL_3371566_12]**  They believe they can mitigate the majority of the potential impact through certain measures.  **[RCL_3371566_12]** 

4. **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.  **[RCL_3371566_15]**  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.  **[RCL_3371566_15]**  Their formula remains moderate capacity growth, moderate yield growth, and strong cost control.  **[RCL_3371566_15]** 

5. **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.  **[RCL_3371566_16]**  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  **[RCL_3371566_16]** ,.  **[RCL_3371566_19]** 

6. **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.  **[RCL_3371566_18]**  Metrics show Icon has doubled or tripled the response, with phenomenal bookings and high pricing.  **[RCL_3371566_18]**  It's attracting significant demand from both customers and trade partners, positioning it as a game-changer.  **[RCL_3371566_18]** 

7. **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.  **[RCL_3371566_14]**  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.  **[RCL_3371566_14]** 

8. **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.  **[RCL_3371566_17]**  While channel agnostic, enhancing digital capabilities has led to guests spending **2.5 times more onboard** when they book ahead.  **[RCL_3371566_17]**  Their focus is on keeping customers within their ecosystem, regardless of the booking channel.  **[RCL_3371566_17]** 

4ec3359734d38abf3eeb7c72489f6b3d710d7299a0f08a0030f56960bd7d036b

1. **Earnings Guidance for 2025**  
   **Q:** What are the pillars to achieve $14+ earnings in 2025?  
   **A:** Jason Liberty stated that to reach the **$14 handle** in 2025, they need moderate yield growth, continued effective cost management, and will benefit from lower interest costs due to balance sheet improvements. This guidance does **not** include additional share buybacks.  **[RCL_3404380_8]** 

2. **Yield Uplift from Perfect Day Mexico**  
   **Q:** Can we expect a double-digit yield uplift from Perfect Day Mexico?  
   **A:** Jason Liberty confirmed they anticipate a **double-digit yield opportunity** in the Western Caribbean with Perfect Day Mexico, similar to the uplift seen with CocoCay. They plan to leverage learnings from CocoCay to drive strong demand and enhance yields.  **[RCL_3404380_9]** 

3. **Capital Allocation and Cash Flow**  
   **Q:** Will cash flow be used for shareholders or balance sheet?  
   **A:** Naftali Holtz emphasized the importance of maintaining a **strong balance sheet** and continuing to find ways to lower the cost of capital. While higher-cost debt is gone, they have reinitiated a dividend and may consider share buybacks opportunistically, aiming for a **competitive dividend** and potential capital returns to shareholders.  **[RCL_3404380_20]** 

4. **Elevated Demand and Bookings Trends**  
   **Q:** How are current demand patterns and bookings for 2025?  
   **A:** Jason Liberty noted that demand continues to **rise** each month, with elevated bookings and the ability to increase pricing. Despite hurricanes, they have seen strong demand in September and October, building a solid book position into next year. They are optimizing revenue for 2025 and beyond, focusing on yield growth and margin returns.  **[RCL_3404380_10]** 

5. **Investments and Return Profile**  
   **Q:** Why is your return profile better than ever before?  
   **A:** Jason Liberty explained that thoughtful investments over time, focusing on leading segments, enhancing experiences, and monetizing destinations have improved **margins** and returns. Leveraging technology and sophisticated yield management contributes to increased margins and a stronger return profile, with room for further improvement.  **[RCL_3404380_22]** 

6. **Cost Control and Timing**  
   **Q:** Can you share details on favorable cost timing and discipline?  
   **A:** Naftali Holtz mentioned that this year had a **unique** situation with double the number of dry docks compared to last year. Cost timing issues are related to supply chain impacts from suppliers. They are managing costs strongly, focusing on enhancing margins while making the right investments for the future.  **[RCL_3404380_16]** 

7. **Moderate Yield Growth Guidance**  
   **Q:** Does moderate yield growth include upside from new ships and destinations?  
   **A:** Jason Liberty stated that moderate yield growth factors in like-for-like growth and contributions from new hardware, typically adding about **one point** per year to yields. Introductions of private destinations move yields to the higher end of the range, but their outlook is based on historical trends.  **[RCL_3404380_17]** 

8. **Order Book and Capacity Growth**  
   **Q:** What is the status of your ship orders through 2028?  
   **A:** Jason Liberty indicated that they have placed orders through **2027 and into 2028**, with many options secured. They subscribe to moderate capacity growth, looking to moderately grow their fleet and brands, confident in achieving yield growth over time.  **[RCL_3404380_19]** 

9. **Ongoing Cost Pressures from Investments**  
   **Q:** Should we expect ongoing cost pressures due to investments?  
   **A:** Naftali Holtz said they manage costs holistically, factoring in investments. While investments may add some costs, they have **incredible returns** and will lead to **margin expansion**. They are committed to moderate capacity growth, moderate yield growth, and strong cost control.  **[RCL_3404380_21]** 

10. **Texas Market Opportunity**  
    **Q:** How do you view the underpenetrated Texas cruise market?  
    **A:** Michael Bayley highlighted that Perfect Day Mexico and Royal Beach Club Cozumel open opportunities to introduce more short products from Texas and Gulf ports. With new terminals and large ships, they offer extraordinary short breaks, tapping into a market with a similar propensity to cruise but **half the penetration** of other markets.  **[RCL_3404380_14]** 

11. **Impact of Private Destinations on Margins**  
    **Q:** Will Paradise Island have similar ancillary uplift as CocoCay?  
    **A:** Michael Bayley explained that the Royal Beach Club on Paradise Island will be an **exclusive, all-for-pay** experience, accommodating about **4,000 guests per day**. Unlike CocoCay, it requires purchasing a ticket, making it a positive **revenue generator with good margins**.  **[RCL_3404380_15]** 

12. **Impact of Hurricanes and Elections**  
    **Q:** Do hurricanes and elections affect bookings and yields?  
    **A:** Jason Liberty noted hurricanes caused minimal impact, with no significant carry-through into 2025. Michael Bayley added that elections may cause slight volatility during election week, but over a longer period, there's **effectively no impact** on bookings, regardless of the outcome.  **[RCL_3404380_12]** 

e30ac7ef768f31d06ddf767b66578f138bf4b89b5526393d9d1c6ecf5833105f

- **RCL expects double-digit yield growth in Western Caribbean itineraries with the introduction of "Perfect Day Mexico", similar to the impact seen with "Perfect Day at CocoCay".**  **[RCL_3404380_9]**
- **The company has reached a key financial milestone, returning to a fully unsecured capital structure and generating over $3.3 billion in cash flow this year, enabling capital returns to shareholders through dividends and potential share repurchases.**  **[RCL_3404380_20]**
- **Net yields are up about 25% versus 2019 levels with no signs of hitting a ceiling in demand or pricing, supporting ongoing margin expansion and higher returns on investments.**  **[RCL_3404380_6]**

04f8c0d94b129be5f0ed7e0016f03c0a3a13630a69e5a159d1bf750fbab1d2bd

1. **Future Bookings and Strong Demand**  
   **Q:** Are bookings and pricing strength carrying into 2025?  
   **A:** Yes, demand remains robust with bookings extending into 2025 and even into 2026. Customers are booking further out, indicating very strong demand trends for both 2024 and 2025.  **[RCL_3380749_7]** 

2. **Earnings Potential and Operating Leverage**  
   **Q:** Is $20 EPS by 2025 achievable despite higher costs?  
   **A:** While not providing specific EPS guidance, management highlights strong operating leverage, moderate yield growth, cost control, and high-yielding capacity driving significant earnings power.  **[RCL_3380749_8]** 

3. **Balance Sheet and Capital Returns**  
   **Q:** How does improved guidance impact leverage and capital returns?  
   **A:** With accelerated performance, leverage is expected to drop below **3.5x** by year-end. Focus remains on reducing debt, lowering cost of capital, and moving towards an unsecured balance sheet. Pre-COVID capital returns may be considered once Trifecta goals are achieved.  **[RCL_3380749_15]** 

4. **China Market Reopening**  
   **Q:** How is the China market performing after reopening?  
   **A:** The China market is showing strong demand with volume and rate for 2024 significantly higher than in 2019. A second ship has been deployed, reflecting positive performance and high expectations.  **[RCL_3380749_14]** 

5. **Capacity Growth and Ship Orders**  
   **Q:** Will increased industry orders affect your capacity plans?  
   **A:** Royal Caribbean remains committed to moderate capacity growth, typically ordering ships 5–6 years in advance. Current order book is solid, and access to build ships over an extended period is assured.  **[RCL_3380749_17]** **[RCL_3380749_18]** 

6. **Market Share and Vacation Market Opportunity**  
   **Q:** How do you view your market share opportunity in the global vacation market?  
   **A:** Cruise represents a small fraction of the **$1.9 trillion** travel space. A 1% shift in market share equates to 11 Oasis-class ships, highlighting significant growth potential by attracting land-based vacationers.  **[RCL_3380749_11]** 

7. **Sourcing Mix and Revenue Impact**  
   **Q:** Will increasing international passengers affect onboard revenue?  
   **A:** While sourcing may shift slightly with more China business next year, the impact on onboard revenue mix is not expected to be material. The focus is on optimizing overall revenue and yield.  **[RCL_3380749_12]** 

8. **Millennial Customers and Online Booking**  
   **Q:** Are millennials more inclined to pre-book onboard activities?  
   **A:** Yes, younger customers are more likely to pre-book, aided by streamlined online booking experiences. Website visits have doubled, reaching **100 million** in the first quarter.  **[RCL_3380749_13]** 

9. **Exclusive Destinations and Demand Drivers**  
   **Q:** Is the Royal Beach Club open to non-Royal Caribbean guests?  
   **A:** No, the Royal Beach Club is exclusive to Royal Caribbean guests, enhancing demand and differentiating the brand with unique destination experiences.  **[RCL_3380749_10]** 

10. **Customer Loyalty and Brand Overlap**  
    **Q:** Do you see customer overlap across your brands, and any interest in river cruising?  
    **A:** Yes, there's overlap among brands like Royal Caribbean, Celebrity, and Silversea. While river cruising shows some overlap, current focus is on excelling in core segments and expanding destination platforms.  **[RCL_3380749_19]** 

11. **Potential Itinerary Changes and Guidance**  
    **Q:** Will possible changes to Red Sea cruises affect guidance?  
    **A:** Any potential changes to fall Red Sea cruises are already factored into guidance, so there will be no impact on financial expectations.  **[RCL_3380749_16]** 

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Royal Caribbean Cruises Ltd (RCL)

Financials