Americans avoiding Med cruises was a blip for Royal Caribbean

Geopolitical events in Europe impacted North American bookings of Mediterranean
cruises, Royal Caribbean Cruises Ltd. officials said during a conference call
Friday to discuss RCCL’s first-quarter results. 

CFO Jason Liberty categorized it
as a “lull” in demand, which the company filled with bookings from
European travelers, a market that the company said was robust. However, the sourcing shift was accompanied by a decrease in fares and a drop in onboard purchases because North Americans tend to spend more money than Europeans on Mediterranean cruises, Liberty said.

Outside of the Med, however,
bookings to the Baltic region have proceeded apace, and executives noted the
strength of the Caribbean, Alaska and Bermuda, positing that some of the
bookings intended for the Med had been redirected to North America.

“Some of the softness we see
in Europe, the Caribbean is the beneficiary of that,” said Michael Bayley,
Royal Caribbean International’s CEO.

RCCL CEO Richard Fain said it
was “interesting to note that strong last-minute demand helped our
bookings at the same time that we were simultaneously enforcing our price
integrity program.” He pointed to the Caribbean in particular.

Overall, robust sales during the first three months of 2016 and
strong demand in the Caribbean helped fuel a bullish mood. Fain kicked
off the call by saying it was “gratifying to report results that are so
much higher than we have ever enjoyed in any winter quarter in our history.”

“We’re in the happy position
that just about everything in the quarter that could have gone right,
did,” he said. “Ticket revenue was stellar, onboard revenue was
terrific, costs were well controlled and even below-the-line items helped.”