By Granth Vanaik
(Reuters) -Royal Caribbean Group on Thursday lifted its full-year profit forecast for a third time and said bookings for the next year were "significantly outpacing" pre-pandemic levels by a wide margin, sending its shares up about 3%.
Cruise operators are reaping the rewards as travelers gravitate to cruise vacations that are cheaper compared to taking a land-based holiday.
This has given the companies the ability to hike itinerary prices, especially in North America and Europe, as occupancy levels now approach pre-pandemic levels.
Royal Caribbean (NYSE:RCL) said occupancy in the third quarter was higher than that reported in the second quarter.
"As we look into 2024, we have booked over double the amount of pre-cruise revenue compared to this, year with more guests engaging before their cruise and at higher prices," CEO Jason Liberty said on a post-earnings call.
Royal Caribbean now expects its annual adjusted profit between $6.58 and $6.63 per share, compared with earlier forecast of $6.00 to $6.20.
"We cannot find anything to pick at in this report, and believe this is much better than expected," Barclays analyst Brandt Montour said.
However, the company said its full-year earnings per share would take an 18-cent hit from higher fuel prices and a stronger dollar.
The company also said the ongoing military conflict in the Middle East is expected to hit its annual profit by 3 cents per share.
Royal Caribbean also expects fourth-quarter adjusted profit between $1.05 and $1.10 per share, compared with expectations of $1.
Its quarterly total revenue of $4.16 billion beat estimates of $4.08 billion, while its adjusted profit of $3.86 per share also topped expectations, according to LSEG data.
Peer Carnival (NYSE:CCL) in September narrowed its annual loss forecast and posted a third-quarter profit, but investors showed deep concerns around steeper fuel costs.
Rival Norwegian Cruise Line (NYSE:NCLH) will be reporting third-quarter results on Nov. 1.