Royal Caribbean Cruises (NYSE:RCL) executives highlighted strong financial results for 2025 and provided an upbeat view of demand trends heading into 2026, while also outlining expansion plans across ocean, river and private-destination offerings during the company’s fourth-quarter and full-year 2025 earnings call.
2025 performance and fourth-quarter results
Chairman and CEO Jason Liberty called 2025 “an outstanding year,” citing strong demand, “disciplined execution,” balance sheet improvement and capital returns. Management said the company delivered a record 9.4 million vacations and nearly $18 billion in total revenue in 2025, alongside 33% growth in adjusted earnings per share. Liberty also said the company generated nearly $6.5 billion of operating cash flow and returned $2 billion to shareholders through dividends and share buybacks.
For the full year, Holtz reported:
- Total revenue growth of 8.8%.
- Adjusted EBITDA up 17.6% to “just over $7 billion.”
- Adjusted EPS up 33% to $15.64.
- Operating cash flow of $6.4 billion.
- Investment-grade balance sheet status and $2 billion returned to shareholders, while investing more than $5 billion in future initiatives.
Booking trends and demand entering 2026
Liberty said the company has seen a “record start” to the wave season, noting the “best seven booking weeks in the company’s history” since the prior earnings call. Management said the company is already about two-thirds booked for 2026, with booked load factors within historical ranges at “record rates.” Liberty emphasized that all commercial channels are producing demand, including particularly strong direct-to-consumer performance, while travel partners are also delivering more bookings than last year at higher rates.
Liberty said new ships were contributing to demand, citing Star of the Seas and Celebrity Xcel as exceeding expectations, and said Legend of the Seas—an Icon Class ship debuting in Europe later in the year—was showing “very strong booking trends.” He added that internal research suggests consumers feel financially secure and continue to prioritize experiences, with 40% planning to increase leisure travel spending over the next year.
2026 guidance: capacity, yields, costs and cash flow
For 2026, management reiterated its operating framework of moderate capacity growth, moderate yield growth and strong cost control. Liberty said revenue is expected to increase at a double-digit rate year over year, with net yield growth of 1.5% to 3.5%, and guided to adjusted EPS of $17.70 to $18.10, which would represent 14% growth year over year. He also said the company expects to generate more than $7 billion in operating cash flow.
Holtz provided additional detail on capacity and deployment, stating that capacity is expected to rise 6.7% year over year, reflecting the introduction of Legend and the annualized impact of Star and Xcel. He said dry docks are “modestly higher” than in 2025, with less capacity in dry dock in the first quarter and more in the second quarter, and noted that more premium hardware is scheduled for dry docks compared with last year, which he said would pressure yield comparisons—particularly in the second quarter.
Holtz described regional deployment for 2026, including:
- Caribbean: 57% of capacity, up 8% year over year. Holtz said Caribbean yields have grown 35% since 2019 and management expects continued yield growth in 2026 despite elevated industry capacity in the region.
- Europe: 15% of capacity, up 5% year over year, including Legend of the Seas’ debut in Europe in the summer. Holtz noted Europe is high-yielding but said capacity is down in the first half due to dry dock timing in the second quarter.
- Alaska: 5% of capacity, up 3% year over year, with hardware including Celebrity Edge, two Quantum Class ships and Silver Moon.
On costs, Holtz said full-year net cruise costs excluding fuel are expected to be flat to up 1%, following a slight decrease in 2025. He also cited “about 200 basis points of cost headwinds,” mainly tied to the ramp-up of the private destinations portfolio that do not come with an increase in APCDs. Fuel expense is expected to be approximately $1.17 billion, with 60% of projected consumption hedged. Holtz said about 10% of fuel consumption is expected to come from LNG and biofuel blends in 2026, compared with 8% in 2025, and that fuel consumption per APCD is expected to improve by about 4% due to new hardware and deployment optimization. He also noted that the EU Emissions Trading System will expand in 2026 to cover 100% of emissions associated with the company’s European itineraries, up from 70% in 2025.
For the first quarter, Holtz guided to capacity growth of 8.5% year over year, net yields up 1% to 1.5% in constant currency and adjusted EPS of $3.18 to $3.28. He said the yield outlook includes a 30-basis-point impact from itinerary modifications in China and roughly 50 basis points of yield headwinds from deployment shifts.
Strategic investments: river expansion, new ship class and destinations
Liberty used the call to announce a further expansion of Celebrity River Cruises, committing to 10 additional ships, which would bring the river fleet to 20 vessels by 2031. He said the expansion would make Celebrity River Cruises “one of the largest European river cruise operators.” In Q&A, Liberty said early demand and pricing exceeded expectations and added that roughly 80% of early bookings came from existing customers who had not taken a river cruise before.
The company also announced a new “Discovery Class” for the Royal Caribbean brand, with two firm ships ordered and options for four more. Royal Caribbean brand President and CEO Michael Bayley declined to provide specifics on ship size or capacity, saying the company will share more details later and that many assumptions circulating publicly are “inaccurate.”
On the destination side, Liberty highlighted the December opening of Royal Beach Club Paradise Island and said the guest response has been “exceptionally positive.” Bayley said that within four weeks, the Royal Beach Club became the “number one top-rated experience in Nassau” for the company’s cruise guests, and that satisfaction levels were about “0.8 of 1% behind Perfect Day.” He said the company is intentionally ramping the product slowly to “get the product absolutely perfect,” with demand starting to build.
Technology and AI as an operating lever
Liberty said the company continues embedding AI across commercial and operational areas. He cited a 25% year-over-year increase in active app users in the fourth quarter and said e-commerce traffic rose 10% in 2025, with conversion improving throughout the year. Executives said AI is being applied to personalization and pre-cruise engagement as well as supply chain forecasting, energy management and marine operations. In discussing cost performance, Holtz pointed to scaling benefits from growth and operational improvements supported by “disruptive technologies,” including AI and GenAI.
In response to questions about Caribbean capacity concerns, Liberty said the company continues to see strong Caribbean demand across Royal Caribbean, Celebrity and Silversea, with pricing higher than last year. He also said industry behavior appears “more rational” and focused on price integrity than in prior cycles.
About Royal Caribbean Cruises (NYSE:RCL)
Royal Caribbean Cruises (NYSE: RCL), operating as part of the Royal Caribbean Group, is a global cruise company that develops, markets and operates passenger cruise ships. The company operates multiple consumer-facing cruise brands that offer short- and long-duration itineraries and a range of onboard experiences. Its core activities include itineraries and voyage operations, guest services and hospitality, onboard food and beverage, entertainment and recreation programming, and the commercial activities needed to sell and support cruises through both direct and travel‑agent channels.
Royal Caribbean’s ships serve a broad set of geographies worldwide, regularly deploying vessels in the Caribbean, North America (including Alaska), Europe, Asia, Australia and South America.
