Royal's Trifecta Initiative Entails Rapid Profit Restoration Through 2025 Led by Compelling Products

Travel constraints and coronavirus hesitancy are receding, so consumer behavior about travel and social distancing are returning to normal for Royal Caribbean, leading to positive operating cash flow and EBITDA at the business. The redeployment of the fleet is complete, and cruise operators have successfully implemented health protocols to ensure the safety of the cruising population (as evidenced by a lower positivity rate than on land). With virus restrictions largely in the rearview mirror, Royal Caribbean should see modest pricing gains as it digests a few remaining bookings paid for with future cruise credits (into 2023) and takes new reservations. On the cost side, some health protocols and cruise resumption costs could reman high in the near term but should continue to pare back in 2023, aiding profitability.