Royal Caribbean Booking Momentum Strong in Q2, Demand Resilient

Royal Caribbean Cruises Ltd. RCL reported mixed second-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased year over year.

RCL Booking Updates

In the second quarter of 2025, Royal Caribbean reported a robust booking environment, driven by strong consumer demand across all brands and itineraries. The company saw an acceleration in bookings compared to the prior quarter, particularly for close-in sailings, which significantly contributed to its revenue outperformance. Consumer sentiment remained upbeat, with approximately 75% of travelers indicating plans to spend the same or more on leisure travel over the next 12 months. Importantly, a shift in booking behavior was noted, with more than half of travelers now booking closer to their departure date than in previous years.

For 2025 and 2026, Royal Caribbean’s booked position is in line with historical levels, but at higher average per diems. This means that, while the overall volume of bookings is like that of past years, customers are paying more per booking, a sign of pricing power and strong demand. Additionally, the company noted that onboard spending and pre-cruise purchases are exceeding prior-year levels, further enhancing yield performance.

The strength in bookings also extends to Royal Caribbean’s newest assets. Ships such as Star of the Seas and Celebrity Xcel have already garnered solid booking volumes and pricing. Moreover, early demand for the newly launched Royal Beach Club Paradise Island has been described as “incredibly strong,” reinforcing the company’s strategy of delivering destination-led premium experiences.

Royal Caribbean's booking strength across both near-term sailings and future years like 2025 and 2026 reflects resilient demand, higher guest willingness to pay, and strong customer engagement, particularly among younger travelers who favor flexible, experiential travel.

RCL Outlook

In the third quarter of 2025, Royal Caribbean expects depreciation and amortization expenses to be in the range of $425-$435 million. Management estimates adjusted EPS to be in the band of $5.55-$5.65.

The company expects net yields to increase in the band of 2.3-2.8% on a reported basis and 2-2.5% at cc year over year. Net cruise costs, excluding fuel, per APCD are expected to increase between 6.4% and 6.9% on a reported basis and in the range of 6-6.5% at cc.

For 2025, the company expects depreciation and amortization expenses to be in the range of $1.70-$1.71 billion. Adjusted EPS is anticipated to be between $15.41 and $15.55 compared with the previous expectation of $14.55-$15.55. The company expects net yields to increase in the band of 3.5-4% on a reported basis and 3.5-4% at cc year over year.

RCL’s Zacks Rank

Royal Caribbean currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks from the Zacks Consumer-Discretionary sector are Carnival Corporation & plc CCL, Monarch Casino & Resort, Inc. MCRI and Planet Fitness, Inc. PLNT.

Carnival presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Carnival delivered a trailing four-quarter earnings surprise of 169.9%, on average. The stock has gained 19.3% in the year-to-date period. The Zacks Consensus Estimate for Carnival’s 2025 sales and EPS implies growth of 5.8% and 40.9%, respectively, from the year-ago levels.

Monarch Casino presently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter earnings surprise of 11.1%, on average. The stock has rallied 32.3% in the year-to-date period.

The Zacks Consensus Estimate for Monarch Casino’s 2025 sales and EPS indicates an increase of 4.5% and 9.9%, respectively, from the year-ago levels.

Planet Fitness currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 12.5% in the year-to-date period.

The Zacks Consensus Estimate for Planet Fitness’ 2025 sales and EPS indicates growth of 10.4% and 12.4%, respectively, from the year-ago period’s levels.

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This article originally published on Zacks Investment Research (zacks.com).

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