Royal Caribbean Cruises Ltd. (NYSE:RCL) Q4 2022 Earnings Call Transcript

Operator: Your next question comes from the line of Robin Farley with UBS.

Robin Farley : Just wanted to get a little bit more of a split in your yield guidance between the occupancy and the revenue per day piece of it because thinking about the occupancy issues sort of going to cure itself, and I guess, we would think about that price increase as something that would carry forward into 2024, unless you think that some of that pricing — that there’s a trade-off to get back to full occupancy. So just trying to think about how much of the yield increase that you’re guiding to, really when the occupancy is back, implies a price — a greater yield increase for going forward?

Naftali Holtz: Yes. So Robin, so first, for the full year, obviously, many moving pieces as we are again comparing a three-year benchmark. And as Jason said, just a minute ago, we were obviously different. So we are good at some ships, some brands. We added Galveston. We have direct contribution now from Perfect Day at CocoCay. All of it is slightly negative to yield, but overall, obviously, very, very important to us. The majority of the benefit that you see on the yield side is from new hardware. We also put that hardware on the best itineraries. They have more onboard revenue opportunities. And the rest, the like-for-like, that is up despite the fact that, as you mentioned, the load factors are much lower than what we had in ’19. For Q1, if we adjust for the load factor, the difference — yield would have been around mid-single digits. So it’s obviously more impact for Q1.

Robin Farley: Okay. Great. That’s helpful. Thanks. And then maybe just sort of follow-up to that is one of your Trifecta goals is that sort of EBITDA per berth that you’ve given us a long-term goal. Is there any kind of ballpark EBITDA per berth that you might give sort of a range for ’23? Just thinking about, obviously, the — a lot of the EBITDA versus ’19 would clearly be above given the 14% capacity growth. So if we just think about the passenger billing on per berth basis, just kind of wondering how recovered you may be in ’23 versus ’19?

Jason Liberty: Yes. And so, Robin, just — we’ve — obviously, we’ve moved now to start to guide back to what we were doing in 2019 to make sure we create comparability. We clearly believe that our EBITDA is going to be up and our EBITDA per berth is on its way getting back to those record levels, which is really just being impacted by fuel prices. But that’s really where we’re very focused because we believe one of our paths to getting to ROIC in the teens is obviously focusing on improving our margins across all of our brands. And so, that’s how we’ve guided for 2023 and the focus is very heavy on — internally on us improving those margins.

Operator: Your next question comes from the line of Vince Ciepiel with Cleveland Research Company.

Vince Ciepiel: Helpful commentary there with the onboard bookings in advance and especially strong results during 4Q despite you continuing to close that occupancy gap versus 2019. So curious how you’re thinking about that on board for passenger cruise day throughout the course of this year as you fill out the interior shift, I imagine there’s maybe a little bit of a mix headwind there. But can these onboard less remain elevated? And secondarily to that, the ticket component, how would you expect that to evolve through the course of this year?