Royal Caribbean Group (RCL) — Q1 2025 Earnings Call Transcript

Good morning, everyone, and thank you for joining us today for our first quarter 2025 earnings call. Joining me here in Miami are Jason Liberty, our Chief Executive Officer; Naftali Holtz, our Chief Financial Officer; and Michael Bayley, President and CEO of the Royal Caribbean brand. Before we get started, I would like to note that we will be making forward-looking statements during this call. These statements are based on management's current expectations and are subject to risks and uncertainties. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release issued this morning as well as our filings with the SEC for a description of these factors. We do not undertake to update any forward-looking statements as circumstances change. Also, we will be discussing certain non-GAAP financial measures, which are adjusted as defined, and a reconciliation of all non-GAAP items can be found on our investor website and in our earnings release. Unless we state otherwise, all metrics are on a constant currency-adjusted basis. Jason will begin the call by providing a strategic overview and update on the business. Naftali will follow with a recap of our first quarter, the current booking environment, and our outlook for 2025. We will then open the call for your questions. With that, I'm pleased to turn the call over to Jason.

Thank you, Blake, and good morning, everyone. I am pleased to share our strong first quarter results and updated outlook for the year. During the first quarter, we delivered over 2 million unforgettable vacations at exceptional guest satisfaction scores and achieved financial results that exceeded our expectations. Likewise, WAVE Season was the best in our company's history, putting us in a strong book position for the remainder of the year and for 2026. Clearly, consumers continue to choose our vacations because we consistently deliver the best experiences and provide value to our guests. As we look across the current macro landscape, we recognize that there is heightened uncertainty. However, research, including the direct surveying of our customers, continues to show that the propensity to cruise remains encouraging. The combination of the world-class experiences we deliver, continued strong secular tailwinds, and the persistent value gap to land-based vacation positions us well to navigate the current environment. I'll touch more on this in a little bit. We are certainly not immune to macro volatility, but what we're seeing on the ground in our bookings and the real-time spending occurring on our ships is that consumers are still prioritizing experiences, planning to spend more on them this year, and are seeking the value that we are well positioned to offer. At this point, it's still too early to determine how exactly the current macro environment could impact the broader economy or consumer behavior. What I want to emphasize is that we are focused on what we can control: delivering the best vacation experiences for our guests, optimizing revenue, managing costs, and executing on our long-term strategies. Over the past several years, we have taken decisive steps to strengthen our balance sheet, and we continue to do so. We are in a very strong financial position, with an investment-grade balance sheet, strong cash flow generation, robust liquidity, and minimal near-term maturities, and we remain focused on maintaining financial flexibility. We are confident in our growth strategy and the incredible opportunity ahead of us, continuing to win a greater share of the growing $2 trillion vacation market as we further progress from delivering the vacation of a lifetime into a lifetime of vacations. We also continue to invest in the future of our fleet, our private destination portfolio, and the guest experience. We do this all with the best talent, and I want to thank the entire Royal Caribbean Group team for their passion, dedication, and commitment to delivering the best vacation experiences responsibly and for driving strong financial results. Now moving to our results and outlook. We are very pleased with our first quarter results, which exceeded our expectations. Yields grew 5.6%, and we saw better than expected close-in bookings across all itineraries. Adjusted earnings per share of $2.71 in the first quarter was $0.23 higher than our guidance. Better revenue and favorable timing of expenses contributed to the better-than-expected earnings performance. Naftali will elaborate more on the first quarter results shortly. Now I'll provide some insight into the demand environment and WAVE season. During the first quarter, bookings outpaced last year across all products, resulting in the best WAVE season in the company's history. In the month of April, bookings for 2025 are outpacing last year, with close-in bookings trending particularly well. Our book position is in line with prior years at higher Average Passenger Line (APDs). Onboard spending and pre-cruise purchases continue to exceed prior years, driven by increased participation in onboard activities and experiences at higher prices. All commercial channels are generating quality demand, with particular strength in our direct-to-consumer channels. As always, we continue to possess a nimble and flexible sourcing model, both geographically and demographically, with the ability to source quality demand all over the globe. We continue to be thrilled by the reception of our spectacular new ships. The enthusiasm for Star of the Seas, our second Icon Class ship, and Celebrity Xcel, the latest addition to the Edge-class lineup, has exceeded expectations, driving strong pricing and load factors. As we look at our current and potential consumers, we remain encouraged. While broader consumer spending moderated, vacation spending continued to grow, as consumer sentiment around leisure vacations remained positive. Our customers continue to be engaged and excited about vacations. In research fielded in April, seven out of ten consumers told us that they intend to spend the same or more on leisure travel over the next 12 months, with spending on travel continuing to outpace major material purchases. For nine out of ten consumers surveyed, value for money is crucial when making vacation plans, and this is where we continue to excel. Furthermore, when financial concerns impact lifestyle or spending, travel is not the first place consumers indicate they will pull back. Cruisers are more financially secure and more likely to protect their travel budgets during times of uncertainty. We are very well positioned to deliver great vacations from multiple locations close to home for millions of people in the U.S., offering them extraordinary value through a range of itinerary options from three to ten days from Florida, Texas, California, the Northeast, and the Northwest. Our vacation experiences remain an attractive value proposition and lead in guest satisfaction compared to other vacation alternatives. Consumers recognize that our brands offer superior value for money versus alternative options. That value is made up of our unique ability to give guests the opportunity to visit a variety of destinations in one trip, the convenience of having everything in one place, plus our high-quality onboard amenities and services and pricing that includes meals, accommodations, and entertainment. Now let me provide an update on our outlook for 2025. Let me note that our guidance ranges are expanded compared to those we would typically provide and are based on current demand trends while also considering the complexity of the macro environment based on what we know today. Capacity is expected to grow 5.5% in 2025, driven by the introduction of Star of the Seas and Celebrity Xcel, as well as the full year benefit of Icon, Utopia, and Silver Ray. Yield growth is expected to be in the range of 2.6% to 4.6%, supported by the incredible appeal of our new ships, the performance across our existing fleet, and the continued success of our private destinations. Full year adjusted earnings per share guidance is now expected to grow approximately 28% and be in the range of $14.55 to $15.55. We are benefiting from better than expected first quarter performance and favorable foreign exchange and fuel rates. While we remain cognizant of macroeconomic uncertainties, recent booking trends, disciplined cost management, and a strong balance sheet position us well to deliver another year of strong earnings growth and cash generation. Our proven formula of moderate capacity growth, moderate yield growth, and strong cost control continues to drive superior financial performance, and we remain focused on executing our Perfecta Performance Program, targeting a 20% compound annual growth rate and adjusted earnings per share through 2027 and a return of invested capital in the high teens. We are relentlessly focused on delivering and innovating the best vacation experiences on the planet, and a key differentiator for us is our powerful commercial flywheel, where each guest experience fuels deeper loyalty and more engagement, which enables us to give guests the vacation experiences they want so they keep coming back. It starts with our exceptional portfolio brands, each a category leader designed to cater to the diverse needs of our global guest base. We amplify that strength with industry-leading ships, exclusive private destinations, and continuous innovation that elevates every aspect of the guest journey. Over the next three years, we will introduce seven game-changing new ships, including Star of the Seas and Celebrity Xcel in 2025. We’ll launch Celebrity River in 2027 and expand from two to seven exclusive destinations. We deepen customer relationships through data, personalization, and a frictionless experience that makes planning and enjoying a vacation seamless. Our unified loyalty programs connect all our brands under one ecosystem, encouraging repeat travel and unlocking more opportunities to engage across ocean and river cruising along with our exclusive destinations. The ecosystem is working. Members of our loyalty programs accounted for nearly 40% of our bookings last year, with cross-brand bookings increasing. Loyalty members are more likely to book direct and spend 25% more per trip than nonmembers. On the digital front, bookings in our app have doubled so far this year, and loyalty members are more likely to book in the app than non-loyalty members. Over the last 10 years, we've improved the rate at which guests rebook within three months by 1.7 times and increased net promoter score by 15 points. These results have translated into over 50% net yield growth over that time period, and we're just getting started. Looking ahead, we are incredibly energized by the momentum we're building. These ambitious initiatives reinforce our flywheel and strengthen our ecosystem as we turn the vacation of a lifetime into a lifetime of vacations. I'm incredibly proud of the teams at the Royal Caribbean Group for their passion and relentless focus on delivering great vacation experiences for our guests. We are executing from a position of strength, and I remain optimistic about our ability to capitalize on the many opportunities that lie ahead. And with that, I will turn the call over to Naftali. Naf?

Thank you, Jason, and good morning, everyone. I will start by reviewing first quarter results, which were above our expectations. Adjusted earnings per share were $2.71, 9% higher than the midpoint of our guidance. We had a great first quarter that was driven by better-than-expected pricing on closed-end demand and $0.08 per share of favorable timing of expenses. We finished the quarter with a net yield increase of 5.6% in constant currency compared to the first quarter of 2024, 60 basis points above the midpoint of our initial guidance in late January. Most of our yield growth was driven by strength in ticket pricing versus 2024. Net cruise costs, excluding fuel, increased 0.1% in constant currency, 175 basis points lower than our initial guidance, driven entirely by timing of expenses that will roll into the second quarter and some of the rest of the year. Our EBITDA margin was 35%, 360 basis points better than last year. And operating cash flow was $1.6 billion. As Jason said, we had a record WAVE season and our book load factor is in line with prior years and at higher APDs. Bookings in the month of April continued at a higher pace than last year, including strength in closed-end demand, and cancellation levels remain normal. The Caribbean represents 57% of our deployment this year and 49% of capacity in the second quarter. In 2025, we offered Caribbean sailings from nine U.S. home ports: Miami, Fort Lauderdale, Tampa, Port Canaveral, Galveston, Baltimore, Cape Liberty, San Juan, and New Orleans, and a variety of sailing lengths. Our leading hardware and destinations strengthen our competitive position in this market, with the introduction of Star of the Seas in late August, Celebrity Xcel in November, and the opening of Royal Beach Club Paradise Island by the end of this year. Europe will account for 15% of capacity for the year and 20% of capacity in the second quarter. Alaska is expected to account for 6% of total capacity and 9% in the second quarter. We also have some of the best hardware in the region with Celebrity Edge, two Quantum Class ships, and Silver Nova. Now let me talk about our guidance for 2025. Our proven formula for success: moderate capacity growth, moderate yield growth, and strong cost discipline is expected to drive significant earnings growth and higher cash flow generation this year. Moving to the revenue guidance. We are increasing our guidance for the year compared to our prior one in January. We did expand our typical guidance ranges to account for the broader external factors and the complexity of the current macroeconomic environment. For the full year, we expect yield growth of 2.6% to 4.6%. As a reminder, first quarter yield growth disproportionately benefited from both the timing of drydocks and new hardware, a full quarter of Icon, in addition to Utopia and Silver Ray. The cadence of yield growth throughout the year, as expected, is driven by the introduction of Star of the Seas and Celebrity Xcel into the third and fourth quarters, respectively. The impact of the timing of new ship deliveries on yield growth in the second half of this year is a headwind of approximately 140 basis points. Full year net cruise costs, excluding fuel, are expected to be negative 0.1% to up 0.9%, 10 basis points lower than our prior guidance, as we remain focused on efficiency, enhancing margins, and maximizing cash flow. While we manage our costs more on a yearly basis, the cadence of our cost growth varies throughout the year. This is driven by the timing of dry docks, ship deliveries, and the ramp-up of costs related to our acquisition of the Costa Maya port and other destinations. Second and third quarter cost growth is expected to be higher than the first and the fourth quarter, with the third quarter being most impacted by 280 basis points from these headwinds. We anticipate a fuel expense of $1.14 billion for the year, and we are 59% hedged at below market rates. We are benefiting from the current low fuel rates and have capitalized on this opportunity by executing hedges for the upcoming years at very favorable rates. Based on current fuel prices, currency exchange rates, and interest expense, we expect adjusted earnings per share between $14.55 and $15.55. The $0.55 increase compared to our prior guidance is driven by a $0.37 benefit from FX and fuel rates for the remainder of the year, a $0.05 benefit from a lower share count due to share repurchases, with the remainder attributed to the outperformance in the first quarter. We also expect 15% growth in adjusted EBITDA and 210 basis points growth in gross EBITDA margin. This positions us to accelerate our cash flow generation, which allows us to continue investing in our strategic initiatives, maintaining investment-grade balance sheet metrics, and expanding capital return to shareholders. Now let me comment on second quarter guidance. In the second quarter, we expect capacity will be up 6% year-over-year and a net yield growth of 4.3% to 4.8%. Roughly half of the yield increase is driven by new hardware and the rest is driven by higher rates and load factors on like-for-like hardware. Net cruise costs, excluding fuel, are expected to be up 3.7% to 4.2%. This includes higher dry dock days in the first half of the year compared to last year and a 140 basis points impact from first quarter cost timing shifts. Taking all this into account, we expect adjusted earnings per share for the quarter to be $4 to $4.10. Turning to our balance sheet. We ended the quarter with a strong $4.5 billion in liquidity. We’re in a very strong financial position, and we’ll continue to further strengthen the balance sheet. During the quarter, S&P Global Ratings upgraded our credit rating to investment grade, reflecting the strength of our financial position, consistent performance, and disciplined capital allocation strategy. We are very pleased with this acknowledgment of the strong trajectory of the business and our commitment to strengthening the balance sheet. Also during the quarter, we exchanged $213 million of our outstanding convertible notes for cash and stock. This transaction reduced our fully diluted share count by 1 million shares. We have $110 million left outstanding that we plan to settle at maturity. During the quarter, we also repurchased 1 million shares under our $1 billion share repurchase program. As of March 31, we have $759 million available for repurchases under the current authorization. We will continue to opportunistically buy back shares while ensuring a strong balance sheet. We have very limited maturities left this year, all related to ship amortization payments that we plan to repay with cash flow. We also expect to further reduce leverage to below 3 times by the end of 2025. In closing, we remain committed and focused on our mission to deliver the best vacation experiences responsibly as we work to deliver another year of solid returns.

Thanks, and congrats on a nice quarter.

Thank you.

So Jason, could you speak to drivers of the better-than-planned performance in the first quarter? Maybe elaborate on business in April, and just walk through the company-specific initiatives and continued investments that you have that you think could insulate results and win multi-year market share.

Sure, Matt. Hope you are doing well. So I think just starting off in the first quarter, we have seen this kind of continuous trend that – inside of a quarter, we see kind of an uplift in demand as we get very close in. Not only do we see an uplift in demand, we’re also able to raise our pricing during that period of time. There are also high-quality customers that are spending well on the ship. So the driver in Q1 is really just really strong close-in demand that we’ve seen. As you’ve heard us talk about in April and in the second quarter, we’re seeing that continuous trend. The interesting thing about the trend is, of course, our revenue management tools take those things into account and then try to predict the next quarter that it’s going to be at a certain level and it keeps elevating, which I know it’s probably counterintuitive to some of the reporting around consumer confidence and so forth that’s out there. I think the reason for that is several factors, one of which is we’re obviously incredibly focused on our flywheel. We’re working to get our guests to come with us more frequently. The investments we’ve made in loyalty and in our app make it easier, whether through us or through our travel partners, to do business with us. We’re getting more and more value from those investments. I think behind that is also – and we've seen this for a while, it's just a flight to quality. When you're delivering an exceptional vacation experience with net promoter scores above 70, you gain a strong advocacy, resulting in customers continuing to sail with you. That’s why we're seeing, once again, another outperform quarter in Q1 and I also think we're bucking some of the trends that seem very intuitive when you look at consumer confidence and such. The combination of what we're delivering, combined with the value gap to land-based vacations—though that value gap can be frustrating—serves as a pretty good buffer for us during times like this. When there are economic concerns, our vacation experiences and guests are willing to pay for those experiences while meeting our financial expectations. I also think, regarding the longer-term opportunity and the investments we're making, our destination portfolio has been exceedingly successful. We’re set to add a destination or two over the next several years, driving tremendous value for our shareholders. We have several new ships coming online that are very well received as they’re tailored to today’s consumer. Our investments in technology, such as the yield management program, now featuring a considerable amount of AI, continue to evolve. We’re installing a new travel platform that centers around the customer, not just the cabin. We have many modernization activities and are leveraging learnings from newer ships to improve our legacy fleet. So we're optimistic about what lies ahead, even amidst some noise in the environment. We’re currently observing strong consumer trends for our business.

That's really great color. And then maybe, Naftali, if you could just walk through the areas of this year's guidance where you embedded expanded assumption ranges tied to the current macro backdrop. And just multi-year, any change in thinking to your outlined 20% earnings growth CAGR based on anything that you've seen to date?

Yes. Hi, Matt. So really, if you look historically at this time of the year, we actually narrowed the range. We started roughly around 50 – sorry, 100 basis points on yield. In the beginning of the year and this point, we are around 50%. So we kept it at 100. So that's really where the difference is. Obviously, cost is something that we feel we can control very well. So that hasn't changed. And obviously, the earnings have expanded that range. We just announced Perfecta a couple of weeks ago, and so we feel very good about, as Jason said, the long-term opportunity to continue to win share in a very, very large and exciting $2 trillion vacation market. We continue to invest in our strategies, we believe our strategies work, and we feel that we are also in a great financial position to capitalize on that opportunity.

Hey, good morning. Thanks for taking my questions. You’ve got Nassau opening in December. Naftali, I think on the last call, you said this is the greatest weekend in the history of cruise. Any updated thoughts on the pricing of that day pass?

Hey, Ben, it's Michael. Yes, the greatest weekend in the world is, of course, Utopia of the Seas, sailing out of Port Canaveral to Perfect Day and soon to be the Royal Beach Club. So we are absolutely delighted with the performance of that product. It has been outstanding, and we are very pleased with that; it truly is the greatest weekend in the world. The Beach Club pricing strategy includes a big event that we're hosting in New York City in a couple of weeks, where we'll be discussing the destination portfolio and sharing some images and concepts that will be coming alive in the coming years. We’ll specifically talk about the Royal Beach Club in Nassau and how we're thinking about pricing.

Understood. I appreciate that. And then one maybe clarification. Why are the new ships a headwind in Q3 and Q4? I think you mentioned 140 basis points into H2 yield. I guess, simplistically, I would have thought the ships are positive. Is this just basically like test cruises ramping up APCDs without the associated full revenue ramp?

Yes, let me just clarify. So it's really about timing of when the ships enter into service. We broadly say the third quarter, but really there's timing involved. If you think about Utopia, it entered pretty early in July, while Star is actually entering towards very late in August. So you have both lower APCDs as well as less of an impact from the load factors ramping up. So that’s really the headwind that is mostly on Q3. Q3 also, in absolute dollar terms, is the highest in the second half. So it weighs a little bit more on the second half of the year.

Yes. Guys, good morning. So Jason, if we go back to revised guidance for the rest of the year, I guess, I would say, I’m probably a little surprised you guys didn’t take up a more conservative view around onboard spending and/or close-in pricing. I know you mentioned the feedback you’ve gotten, and your data from your customer remains positive. But clearly, onboard and close-in can change very quickly. So I guess my question is, if there was going to be some pressure from your customer base, do you think the low end of your guidance is now set low enough, that even if there was going to be some pressure, it would capture that? I know that’s kind of a tough question because we have no clue how spending levels would have to be before it goes outside that range. But I want to get your feedback there.

Yes, look, I think obviously there’s a lot of companies that are doing different things, given the heightened level of uncertainty out there. When we’re guiding, Steve, the best that we can do is observe how we’re trading each day and how our customers are spending, checking for resistance and looking at patterns. I think that when we look at our guidance for the balance of the year, obviously, we needed an update for Q1, we needed to adjust for FX and fuel, but we did not update for the back half. Typically, when we see trends that we observed in the first quarter, one would begin to think about the potential impact on the rest of the year. So I think we’ve adopted a more conservative position that reflects how our customers are interacting with us daily, trying to extend the range to help investors understand how we perceive the potential upside and down. As you mentioned, there is uncertainty, and things can certainly change. But I think we feel we’re on a solid position: we’re 86% booked for the year, so we have good visibility. We’ve seen no change in cancellation rates, and we’ve noticed no real change in how our consumers are acting. In general, they appear a bit more short-term focused, which can be seen in the increased bookings for the second quarter.

Okay. Got you. That’s good color, Jason. And then the second question. One of the questions we get a lot from investors is around discounting and what we call promotional work to drive demand. So as we think about bookings—and maybe not so much for this year, but looking into 2026 and beyond—could you help us consider how you might approach using lower pricing versus other tools to stimulate demand if there were a slow down? And also, Jason, I’m not sure you mentioned this in your prepared remarks, but could you provide some context around what you’re seeing so far for 2026 in terms of bookings versus what you consider optimal for that time frame?

Sure. First and foremost, we are committed to price integrity. We’ve dealt with different cycles previously and believe that maintaining a level of price integrity is critically important. Our global yield management platform allows us to source from various parts of the world swiftly, positioning us well. What I would say is that we possess a solid array of promotional tools we actively use in the marketplace; however, our priority will always remain on price integrity. Regarding 2026, our booking window is about a week shorter, driven by close-in demand. Our book position for 2026, as of now, aligns with last year's volume. We, of course, have more capacity next year and with higher prices.

Hi there. Thanks for taking the question, and congrats on a good set of earnings. I’m curious, in terms of the inventory you still have to fill for Q4 and 2026, has there been any difference in terms of the type of bookings, whether that’s like Europe versus U.S. itineraries or different brands, strengthened contemporary versus premium, short duration, drive-through, anything like that that you would call out that’s different from usual trends?

There's really nothing specific, Lizzie, that I would call out regarding bookings by market. Certainly, some reports suggest that markets like Canada are a bit softer, but that is immaterial to our business. When assessing sourcing from North America, Europe, or Asia for the products that they capture, we feel very good about their booking activity. We’ve also been closely analyzing consumer behavior for different market segments, including families and luxury markets, as they do tend to differ in behavior and responses. As of now, all indications point toward a continued focus on vacation experiences—ensuring planned vacations deliver the desired experiences. Many consumers recognize the value that cruises provide, which likely accounts for the strong booking trends we’re observing—differentiating more for an inclusive experience.

Yes, so, hey, Lizzie. So I noted that in the first quarter it was roughly half and half between like-for-like and new hardware. It maintains consistency throughout the year, except for the third quarter, as I previously mentioned, due to the new ship timing effect. So aside from that piece in the third quarter, there should be consistency across the year while excluding that factor.

Good morning, everybody. Thanks for taking my question. Just a follow-up on the near-term demand commentary. You guys see a lot of data from your loyalty program, now that your loyalty program is 40% of your business. You can track customers and where they're going in the system? Are you seeing anyone trade down between ships, between brands, just looking for more value within the system?

I'll just be clear, Brandt: No, they are behaving as they normally would. We have been monitoring their behavior as they explore alternatives; however, we’re not seeing any significant shifts.

Okay. Thanks for that, Jason. And then another question sort of recession scenario type of question. Your load factors are in line with prior years for this year and next year. However, one of your larger peers is running their booked position ahead of prior years. If you enter a slower bookings environment, how much would you be willing to flex your load factors to protect price, and would you need to do that, or are there other levers you could pull?

It’s tough to deal with hypotheticals. Our focus is on optimizing revenue while maintaining price integrity. I don't have a clear answer on how much load factor we might give up. We are striving to improve our load factor and are outfitting our legacy ships to accommodate greater capacity. Our new ships can sustain better load factors, enhancing the vacation experience for our guests—especially families and multigenerational trips. Rather than just focusing on increasing numbers, we seek to bring greater value to the vacations we provide. Because of our growing demand and loyalty system, we’re gaining traction in maximizing our load factors. While I can't specify a hypothetical solution, we aim to maintain price integrity while maximizing load factors.

Thanks. As a follow-up to Brandt. It sounds like your April bookings were quite strong. There have been some reports out there citing a little choppier April, so I'm curious what you see in the marketplace. You have new leadership across all three major cruise lines, navigating what potentially might be choppy waters. The verdict is still out. But how do you think the industry has been managing over the last 30 to 60 days from a price perspective?

Well, I'm three and a half years into this. I don't know how new I am, but if you want to call me young, I'd appreciate that. More importantly, I see a set of industry leaders who, though they may be relatively new, have extensive experience. I still observe rational behavior in the industry. Most companies work to maintain price integrity. It’s challenging to quantify the consumer responses as demand generally remains strong. We should prioritize the fact that we're focused collectively on closing the gap between the cruise and land-based vacation industry. I believe this is why we observe a different pattern in behavior. I want to remind you that while you might read about choppy environments, our insights from April indicate solid performance.

Yes. First, I’d start by affirming that we feel excellent about our financial standing: we’ve made significant efforts over the last couple of years to maintain a strong balance sheet. Now rated investment grade, we possess strong liquidity and are generating healthy cash flows. Thus, we believe we have ample opportunities to capture a larger share of the $2 trillion market, and we will remain committed to investing. We are very confident in our strategies, and we have established a clear capital investment plan over the next couple of years, as discussed in Perfecta. We will continue to do so, while ensuring the integrity of our balance sheet.

Great. Thank you. Just circling back to your comment that in April you said bookings for 2025 outpaced year-over-year. Thinking about what that might imply for 2026 bookings, I know you've mentioned the load factor for 2026 is in line with the same time last year, but is it fair to say it's still above historic ranges? So even if the consumer is currently more focused on close-in bookings for 2026, can you suggest that there still remains room for load factors to decline?

Yes, sure. Our commentary around April represents our future bookings. I'll leave it there regarding 2026 or 2027, as we're also seeing bookings for 2027 at this time. I think in terms of load factor or booked position for 2026, which I’ve mentioned previously, we often regret being too booked at the beginning of the year and missing potential revenue. We feel very content being booked in line with last year's same time. Our revenue management models suggest that's where we should be. And, of course, we're booked at higher rates. If load factors are slightly lower, that’s acceptable, as it significantly exceeds historical bookings.

Yes, Robin, it's really rounding. The adjustments pertain to dry dock scheduling and the diverging timing of new ship deliveries. It's not a significant shift, rather a refinement of about 30 basis points.

Hi everyone. Thank you. You shared some great survey statistics at the beginning of the call. I believe you mentioned that nine out of ten surveyed cited cruising relative value. As we’re still in the early days of a potential downturn, how have consumer priorities shifted? Are there additional secular opportunities within this space? I'm trying to grasp how insulated your outcomes might be compared to other travel forms during a difficult backdrop.

Yes, Conor, value considerations are significant. It is elevated within a higher level than historically seen but has only moved up one or two positions on the priority list. We aim to minimize the value gap related to land-based vacations through highlighting how much more a cruise experience entails compared to these alternatives. During times of uncertainty, this awareness helps us better navigate customer concerns. Guests understand the value they receive, the financial estimates for themselves or their companions for a great experience, and the memories they create while visiting unfamiliar destinations—a high priority for many. Customers continue to confirm that value for money is paramount. So I think the main driver is our ongoing commitment to solid capital allocation. The announcement for a share repurchase program of $1 billion contributes to this approach. This appears effective based on our current macro observations and effective cash management. We understand the need to focus on short-term cash generation without jeopardizing our balance sheet and maintaining a prudent position.

We have had a strong quarter, which allows us to also evaluate how we are implementing our balance sheet while maintaining our target. We are confident moving forward while managing financial expectations appropriately. I appreciate everyone's participation and interest in our operations. Blake is available for any further follow-ups. Wishing you all a great day.