Royal Caribbean Cruising in Hong Kong (RCL)

Royal Caribbean Cruises Ltd. (RCL) began operations in Hong Kong back in 2013, from Hong Kong’s Tak Cruise Terminal. This is an important port because in addition to Hong Kong, mainland Chinese consumers have access to the port. At 1.36 billion people, mainland China is the largest consumer population in the world. It’s only logical for Royal Caribbean to have set up show nearby. And according to Royal Caribbean, it has seen the highest number of advanced bookings in Hong Kong since it began operations in 2013.

In 2015, Royal Caribbean saw approximately 70,000 people cruise out of Hong Kong on its cruise liners. It has already seen approximately 100,000 people cruise out of Hong Kong on its cruise liners this year. This growth has the potential to accelerate for several reasons.

One, a third runway is being added to Hong Kong International Airport, which may increase the influx of travelers. Two, an express rail link and bridge will be constructed to connect to the mainland, which will make it easier for mainlanders to travel to the Tak Cruise Terminal. Three, according to Royal Caribbean’s Hong Kong director of sales and marketing, Balwin Yeung Pok-Hung, the cruising market is booming in Hong Kong, partially because it’s a newer form of travel for the locals and the novelty of it seems resistant to the overall downward trends in Hong Kong tourism.

The most popular vessel in Hong Kong is Ovation of the Seas, which is the largest cruise liner in Asia at 168,666 tons. If you happen to be interested in cruising on the Ovation of the Seas, it will be docked at Hong Kong’s Tak Cruise Terminal in October, readying for a nine-day trip that stops in Japan and Korea. According to Balwin Yeung Pok-Hung via the South China Morning Post, these longer trips are better suited for Hong Kong residents than Chinese mainlanders. Chinese mainlander don’t want a trip that is too short or too long.

RCL has depreciated 26.56% over the past 12 months and currently offers a dividend yield of 2.81%. The short interest is 8.09%.