Royal Caribbean ‘Feels Good’ About China Despite Weak Demand

25.07.2024 - 17:44 / skift.com / Silver Nova / Dawit Habtemariam / Jason Liberty

Royal Caribbean Group said Thursday that customers are booking cruises at record levels despite higher prices – and that the trend should continue.

“Their willingness to pay more for these incredible vacation experiences continues to increase, so our pricing continues to increase into 2025 and into 2026,” said Royal Caribbean CEO and President Jason Liberty on a conference call discussing second-quarter results.

Liberty said there’s been no evidence in price sensitivity from booking data. “I know there might be a group seeking to hear that there’s some type of break in the in the pattern, but there just isn’t,” he said.

He also said the company plans to expand its investment in China despite demand performing behind other markets.

Royal Caribbean Group returned to China in April this year after pausing operations during the pandemic. Royal Caribbean was one of the first major cruise companies to return after China reopened its borders.

The company recently redeployed its Ovation of the Seas ship from China to America’s West Coast, but executives said they are still committed to China and plan to deploy more ships.

“We made the decision really based upon maximizing performance, but it doesn’t in any way indicate that we’re moving away from the China market,” said Liberty.

The company’s Spectrum of the Seas ship has performed well in Shanghai, but executives acknowledged that demand in China is still behind from other large markets.

“We feel good about the China market. It still hasn’t reached the levels we’re seeing in the American market,” said Liberty.

Liberty emphasized Royal Caribbean’s strategy to compete with destinations like Las Vegas and theme parks like Disneyland with Icon of the Seas and its private islands for the multigenerational family travel segment.

“We’re not chasing our cruise competitors, what we’re chasing is how do we grab more and more share from that $1.9 trillion and growing vacation market,” he said.

“With Icon of the Seas, Utopia of the Seas and Silver Nova and private destinations, what we’re doing is trying to further differentiate ourselves and reel in more of those land-based consumers and to make sure that we are a clear consideration in that vacation choice,” he said.

What am I looking at? The performance of cruise and tours sector stocks within the ST200. The index includes companies publicly traded across global markets including both cruise lines and tour operators.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more cruise and tours sector financial performance.

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