Royal Caribbean Says Geopolitical Tensions Moderated Bookings -- Update

By Connor Hart

Royal Caribbean Group narrowed its net yield outlook for the year and said prolonged geopolitical uncertainty hurt bookings for the back half of the year.

The cruise line said Tuesday it now expects net yields, or the money it makes from passengers, to rise 2.35% to 2.85% this year, compared with a prior outlook of up 2.3% to 3.3%.

At the same time, the company trimmed its full-year revenue outlook to 9% growth, down from a previous forecast for roughly 10% growth. Chief Financial Officer Naftali Holtz attributed the decrease to foreign exchange headwinds.

Royal Caribbean raised its adjusted-earnings outlook to $17.73 to $17.87 a share, from a previous forecast of $17.10 to $17.50 a share. Analysts polled by FactSet were looking for $17.32 a share.

The company continues to expect fuel expenses of about $1.34 billion for the year.

For the current quarter, Royal Caribbean guided for adjusted earnings of $6.26 to $6.36 a share, the low end of which is in line with analyst views. Fuel costs are expected to come in at about $362 million during the quarter.

Royal Caribbean said it benefited from strong demand and lower costs during the recent quarter. The overall demand environment remains strong, though the company noted "a modest, near-term impact on bookings for select itineraries, primarily due to prolonged geopolitical activity."

Cruise operators have been getting hammered this year as the war in the Middle East has caused fuel prices to surge and hurt demand. Rival cruise line Carnival said last month that extreme geopolitical volatility has disrupted bookings, and the company issued a soft outlook, expecting higher fuel costs to continue to weigh on profit.

Looking ahead, Royal Caribbean said demand trends are improving.

"While still very early, booking trends for 2027 are encouraging and pacing ahead of historical levels, including for itineraries where demand was impacted by geopolitical developments this year," Holtz said.

For its three months ended June 30, Royal Caribbean posted net income of $1.13 billion, or $4.20 a share, down from $1.21 billion, or $4.41 a share, a year earlier.

Stripping out one-time costs, second-quarter adjusted earnings came in at $4.21 a share, compared with analyst views for $3.98 a share.

Total revenue climbed 6.5% to $4.83 billion, roughly in line with Wall Street models.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

July 28, 2026 10:15 ET (14:15 GMT)