RCL · Q2 2025 Earnings

Jason highlighted acceleration in close-in demand behavior not typically contemplated in forward guidance, affecting both ticket and onboard spend. Management is executing an offense strategy focused on increasing customer lifetime value through loyalty (now 40% of bookings), expanding fleet with innovative ships, investing in destination experiences (three Royal Beach Clubs, Perfect Day Mexico), expanding offerings (river cruising, Chile hotel), and deploying AI and digital technology to manage 15 million price points daily. The goal is to close the gap between cruise's ~$80-85B market share and the $2T total leisure market.

Jason acknowledged if similar demand patterns continue, H2 results will be better, with several points of load factor upside remaining. However, management is cautious about quantifying because they typically forecast on 50/50 basis using multiple months of data rather than near-term trends. On 2028, Jason stated it should result in a 'significant step up' in earnings power from new ships (OASIS 7, Edge 6, Icon 4 in full year), full operation of Perfect Day Mexico, Royal Beach Clubs, and river expansion, but avoided committing to specific growth rates, noting investments take time to design, build, and ramp thoughtfully.

Jason confirmed RCG has a co-branded credit card tied to loyalty program but acknowledged it is not optimized to match ambitions. Management stated they are 'very closely working' with co-branded credit card provider and something 'very meaningful' is coming 'very, very soon.' Jason emphasized they have high-quality data, frequent guest interactions, and guests value recognition and incentivization, which is already driving behavioral shifts (40% loyalty member penetration in Q3). Differentiation vs. land-based is that cruise guests do not have business/frequent transaction earning opportunities, so focus is on recognition and experiential incentives.

Tali explained that the prior quarter guidance range was widened due to geopolitical uncertainty in April/May. The current range represents a reversion to normal historical practice of plus/minus 70 basis points around midpoint guidance. Management emphasized they are now 'going back to normal' in terms of range width. Underlying demand and outlook remain positive; the range change is purely a reflection of reduced macro uncertainty, not deteriorating cruise demand.

Jason reported very strong early sales since opening for sale a few weeks ago, with first sailing December 21st. Pricing starts around $139 with dynamic pricing based on port capacity variability. Within first hour of sale, they sold an 'Ultimate Family Cabana' day for $10,000, and this price point is being hit repeatedly. However, Jason emphasized that the ramp will be intentionally measured and operationally-focused rather than demand-constrained. Initial capacity will be 'meaningfully less' with buildup through Q1 and Q2 to prioritize operational excellence and guest satisfaction over short-term revenue. Construction on schedule, described as 'looking impressive.'