Royal Caribbean Cruises Ltd. (NYSE:RCL) Q3 2023 Earnings Call Transcript

Naftali Holtz: Well, next year, we’ll have a little bit less capacity in Europe, about half of our guests for European sailings come from the U.S and the other half come from around the world. We’ve commented on the 1.5%, and we’ll continue to look at that. I think we need to remember we have a pretty nimble sourcing platform. If we’re worried about that risk. I do think it’s a little bit too early in all of this to have any kind of outlook on what we’re seeing, or our expectations for Europe next year. But our commentary around the strength and the acceleration in demand is not just about one market. It’s really about all of our markets. It’s not just about one product, it’s really about all of our products. And, obviously as we — if these horrific situation continues to occur, that could potentially weigh on a consumer psyche, but that’s not something that we’re seeing at this point in time.

And historically when we see that we typically just see our guest shift in terms of where they want to go. And of course, the vast majority of our capacity in 2024 is going to be in North America.

Steven Wieczynski: And sorry, Jason, one more. Just to be 100% clear, your cost guidance for the remainder of this year is unchanged from an APCD, I mean, essentially, all that’s happening here is just the APCDs are dropping?

Jason Liberty: That’s correct. That’s right.

Steven Wieczynski: Okay. Thank you guys very much.

Jason Liberty: Thanks, Steve.

Operator: Your next question comes from the line of Robin Farley with UBS. Please go ahead.

Robin Farley: Great. Thank you. My two questions are actually on the same two topics. One is just a circling back to changes with, I know you mentioned it’s only that 1.5% that touches on. I think there are some other words a tiny bit, it’s still obviously just single-digit for all the major companies. But are you seeing any ships were not necessarily your ships, but other ships moving into your markets? I know, if it’s just a port of call getting dropped, you wouldn’t have to redo an itinerary. But if there are ships moving in, where you have existing supply that you’re seeing, any kind of impact, or would you say that you’re still continuing to see demand for Europe next year at the same levels kind of regardless of what’s going on with other shipments?

Jason Liberty: Yes, I would probably just start off, Robin, with how you started that off, which is at least from what we can tell this is pretty low single-digit percent capacity of not just us but our some of our competitors, some have a little bit more than we do. And I think a shift of that magnitude is pretty material. So if a ship is moving further, maybe into the eastern med in terms of heading west, or is heading into the western Mediterranean, or there’s some change in the modified and the deployment, it’s a pretty immaterial shift for the broader industry. And I think for us, I mean, just our commentary about first accrues first a brand, the power we’re getting out of our ecosystem and our loyalty base, that’s not — we are actually much, much more focused on how do we close the gap to land base vacation than we think that things that make small ships like this would impact our business.

Robin Farley: Okay, great. Thank you. And then just on the expense piece for next year, it was very helpful, thank you for sort of breaking out the — I don’t know if there’s any further breakout of the dry dock. And what that pieces of the 300 basis points, just because in some ways, the timing of that is sort of a non-recurring kind of increase. So I don’t know if there’s any more breakdown on a 300 bps. And then if there’s any way to sort of help quantify, I know you’re not giving full year yield guidance. But to whatever degree, there’s some bps there that have expense from HideAway. What you would expect the offsetting, I would think you would clearly be more than offsetting that. So just to sort of help investors think about what’s really ongoing here, which is, I guess, probably closer to the 100 bps range so, thanks.