Royal Caribbean CEO Talks Pricing, Israel War, Expansion and More

Royal Caribbean Group’s “exceptional” 2023 booking pattern shows no signs of slowing despite headwinds ranging from higher prices to global conflicts to consumer concerns regarding the economy, said Jason Liberty, the company’s president and CEO.

Speaking to an audience of travel advisors at Northstar Travel Group’s CruiseWorld conference in Fort Lauderdale Thursday, Liberty said the current environment has even enabled the company to raise prices, an oft-stated industry goal.

“Throughout the course of 2023, demand for cruises [and] our three core brands has been exceptional,” he said. “That has allowed us to raise prices during that period of time, which leads to higher commissions. It’s a big win-win."

Liberty added that cruising’s booking boom has enabled the cruise operator to narrow the “value gap” between cruises and higher-priced but comparable land-based vacations.

“The gap between cruise [pricing] and a land-based vacation has been about 40 to 45 percent,” said Liberty. “We closed some of that gap this year but there’s still a 30 to 35 percent gap [compared with] land-based vacations.”

He added “When we think about pricing continuing to increase, customers are looking at cruises and something similar on land. They see that value gap and they’re choosing cruise and choosing cruise at higher prices.”

Royal Caribbean is in the midst of what company officials called a “banner year,” in an October third quarter earnings report.

Royal Caribbean's Icon of the Seas. (Photo Credit: Royal Caribbean International Media)

Load factor rose to 110 percent in Q3, up from 105 percent in Q2. Both load factors and prices for 2024 have risen higher than the company's prior years, executives said.

"Obviously, we are feeling very good about the business, the demand for our brands, the demand for our ships and in destinations," said Jason Liberty, CEO of Royal Caribbean Group.

The company reported a boatload of positive developments: revenue per passenger cruise day was up 17.6 percent year-over-year while the booking window has continued to extend.

Additionally, revenue from North America and Europe itineraries exceeded expectations, propelled by strong close-in demand that translated into higher occupancy, pricing and onboard revenue.

Meanwhile, Liberty said consumers can expect to see more company-wide deployment to Perfect Day at Coco Cay, the company’s highly popular Bahamian private island experience.

Already Royal Caribbean International’s most-demanded itinerary according to company officials, sister company Celebrity Cruises will offer 50 sailings that call at the port in 2024, said officials here.

“We’re always very focused on what our customers want to do,” said Liberty. “We’re also focused on the experience our customers are looking to have and the memories they’re trying to build.”

He continued, “Some of our guests, whether they want a shorter weekend getaway [or] want to go to our private islands, as we cater to families and multi-generational travelers. Royal Caribbean will add Hideaway Beach, an adults-only section to the island this year.

In general, said Liberty, consumers can expect to see more vessels offering calls at Perfect Day at Coco Cay in 2024. “That’s why we continue to add more and more activities on the island, to make sure everybody can have that experience.”

Hideaway Beach will open at Royal Caribbean's Perfect Day at CocoCay in January, 2024. (Photo Credit: Royal Caribbean)

The Royal Caribbean CEO also discussed Royal Caribbean’s decision to aid U.S. nationals seeking to escape the raging Israel-Hamas war. The company’s 1,998-passenger Rhapsody of the Seas had been sailing in the region but canceled its itineraries on October 13 to evacuate from Israel in tandem with the U.S. State Department.

The U.S. Embassy in Israel issued a security alert on October 12 to advise U.S. nationals in the country that boarding would begin in order of arrival on October 13. The ship sailed from Haifa to Limassol, Cyprus.

“We had Rhapsody of the Seas turning around in Haifa,” Liberty said. “So we quickly mobilized and assisted in any way we could.”

Liberty said that when the Israeli government asked how much the cruise line would charge to evacuate the civilians, he answered, “As far as we’re concerned it’s pro bono.”

The cruise line “also tried to get supplies into the country but that was not something that Israel or the U.S. government was prepared to do,” Liberty explained.

Royal Caribbean’s track record of assisting Caribbean countries with severe weather-related evacuations set the precedent for providing aid in global crisis situations.

“These aren’t things we talk about and debate a lot internally. When our communities are in need, it’s in our DNA to step up and try to do the right thing.”

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