Are you looking to take a cruise between now and the end of the year? We have some bad news: You might have a tough time finding a cabin — at least if you want a specific type of room on a specific ship.
Bookings for cruises have been on fire for months, pacing at record levels. As a result, nearly nine of every 10 cabins available for 2024 sailings are already booked, the top executive of one of the world’s biggest cruise companies revealed Thursday.
“We only have about 12% load factors left to build for the year,” Jason Liberty, Royal Caribbean Group CEO, noted in a conference call with Wall Street analysts, using a term that refers to the percentage of cabin space that is available on ships.
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Liberty said bookings for cruises accelerated in April beyond an already blistering pace set in the first three months of the year. The surge occurred despite a rapidly dwindling amount of open cabin space for 2024 sailings.
“Bookings have consistently outpaced last year throughout the entire first quarter and through April, even though we have significantly fewer staterooms left to sell,” Liberty said.
Royal Caribbean Group is the parent company of Royal Caribbean, the world’s biggest cruise line, as well as Celebrity Cruises and Silversea Cruises. It also owns a partial interest in Germany-based cruise brands TUI Cruises and Hapag-Lloyd Cruises.
Liberty was only referring to Royal Caribbean Group brands when making the comments about bookings. But other cruise companies, including Carnival Corporation and Norwegian Cruise Line Holdings, have reported similar strength in bookings in recent months.
As one of the biggest cruise brands in the world, Royal Caribbean Group also serves as a bellwether of sorts for the industry when it comes to booking strength.
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The result: soaring cruise fares
With demand for cruises at record levels and cabin supply quickly disappearing, cruise lines have been able to raise prices significantly in recent months on top of sharp price increases throughout 2023.
During Thursday’s conference call with Wall Street analysts, Liberty said the bookings that customers at its brands made during the first three months of the year were “at much higher prices than 2023” fares.
Liberty also noted that yields at Royal Caribbean Group brands for cruises that customers took during the first three months of the year were up 19.3% as compared to the same months in 2023. That was nearly four percentage points higher than the company was predicting just a few months ago.
Related: 6 ways to get a deal on a cruise
Yield is a measure of how much money cruise lines make per passenger.
“The first quarter was tremendous, sending us well on our path to a year that is significantly better than we expected just a few months back,” Liberty said.
Liberty attributed the strong growth in bookings and pricing in part to the line’s rollout of the record-size Icon of the Seas in January, which has been a huge hit. He also noted strong bookings and pricing across the entire fleets of its brands for all key itineraries.
Both new ships and older ships are in hot demand, Liberty suggested, with demand particularly strong from North American travelers. Roughly 80% of all Royal Caribbean Group bookings this year have come from North Americans — an unusually large percentage.
The company is also seeing a surge in first-time cruisers, a category known in the industry as the “new to cruise” market.
“Our addressable market is expanding, and ‘new to cruise’ continues to grow, increasing 16% year over year,” Liberty said. “These guests are discovering our differentiated vacation experiences and are increasingly returning to us as we see repeat rates over 30% higher compared to 2019.”
Liberty also noted the company was drawing more younger customers, including a growing number of millennials.
“Millennials and younger generations have gained 11 percentage points share compared to 2019, and today almost one in two guests are millennials or younger,” he said.
Cruise bookings are surging in part because vacationers are seeing the value in cruising as compared to other types of vacations that involve land travel, Liberty suggested. Liberty and other cruise executives believe cruises are priced significantly below the level of land resorts on a like-for-like basis, even after the sharp increases in cruise fares over the past year.
“Despite our ability to narrow the gap [in pricing] to land-based vacations in the last 12 months, cruising still remains an exceptional value proposition,” Liberty said.
Also driving cruise bookings is the fact that a strong economy has consumers feeling flush and willing to spend on vacations, Liberty suggested. He noted that consumer sentiment is high, “bolstered by resilient labor markets, wage growth, stabilizing inflation and record-high household net worth.”
In addition, “consumer preferences continue to shift toward spend on experiences, particularly priority for travel,” he said.
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