Royal Caribbean Cruises provided a very optimistic outlook on today’s second quarter earnings call going forward. 

According to Richard Fain, CEO and chairman, Caribbean and China (despite its soft economy) are contributing most to the revenue, while the highest yielding operating regions are Alaska and Europe driven by the North American market.

Adjusted earnings for the full year are expected to be in the range of $9.55 to $9.65, compared to $9.65 to $9.85 given at the time of the Q1 earnings call. The reduction was attributed to Grand Bahama yard incident and the sudden restrictions on Cuba travel.

For 2020, pricing was said to be up, despite not being able to offer high-yielding Cuba sailings, while bookings are behind, partially due to inventory and pricing management, but also due to the deployment of more ships in the short cruise market which tends to have a shorter booking window, according to CFO Jason Liberty.

Liberty also noted that the earnings increases for Q2 was driven half by higher ticket prices and half by onboard spending, especially experiential spending like for Perfect Day at CoCoCay.

Royal Caribbean President Michael Bayley described Perfect Day at CocCoCay as an industry game changer with the ships calling there seeing pricing outpacing expectations.

Operating income for Q2 for 2019 was $573.7 million on revenues of $2.8 billion, compared to operating income of $456.9 million on revenues of $2.3 billion last year.

Increased expenses from the acquisition of Silversea Cruises and the development of CoCoCay and lower revenues year-over-year from joint cruise ventures reduced net income to $480 million for Q2 of this year compared to $466.3 million last year, or $2.25 vs. $2.19 per share.

As a sidebar, Liberty said that Royal Caribbean would have been in an even stronger financial position, with even better results from its global footprint, if the company had not slowed down its building program during the last recession, and if it had more ships.