During the roughly 16 months, the cruise industry remained shut down from US ports, and every cruise line was bleeding money. Royal Caribbean, like its peers, had to borrow money at very high interest rates.
Even though the cruise line tightened its belt as much as possible, expenses remained. Ships can’t just be parked and when they are docked, that comes with fees. Royal Caribbean had to keep crews on its ships to maintain them.
Related: Royal Caribbean shares its strict, new beverage policy
Those ships needed fuel, and their crews needed to eat. Rent was still due on land-based buildings, and private islands had to be maintained.
Money was going out, and only a tiny trickle was coming in. Some people were still putting deposits on future cruises, but as those dates got canceled, that money had to be refunded.
Even when the industry was allowed to return, ships sailed at well below capacity. That was partially due to social distancing and at least partly because Americans were reluctant to sail.
For the first six months, maybe even the first year, it seemed like the cruise industry might not recover.
Vaccines and time eventually changed things, and now people remember how much fun taking a cruise was. That led to a massive comeback for Royal Caribbean and a return to profitability.
Sign up for the Come Cruise With Me newsletter to save money on your next (or your first) cruise.
During the Covid period, bankruptcy appeared to be a rule option for all cruise lines.
Image source: Royal Caribbean
Royal Caribbean has climbed out of the abyss
Earlier this year, Royal Caribbean brought its dividend back. That was something that seemed unthinkable just a few quarters before.
Companies pay dividends as a way to return cash to shareholders. They only do that when they also have all the cash they need to meet their obligations and fuel growth.
To reach the point of actually being able to return money to investors, Royal Caribean had to pay off and rework debt, and return to being comfortably profitable.
In the third quarter, Royal Caribbean continued to post stellar results.
“Net Income for the third quarter of 2024 was $1.1 billion or $4.21 per share compared to Net Income of $1 billion or $3.65 per share for the same period in the prior year. Adjusted Net Income was $1.4 billion or $5.20 per share for the third quarter of 2024 compared to Adjusted Net Income of $1.1 billion or $3.85 per share for the same period in the prior year,” according to a press release.
The cruise line sailed at 111% of capacity and grew its margins by 13.4%.
“We wake up every day obsessively focused on our mission of delivering a lifetime of the very best vacation experiences to our guests. In pursuit of that mission, we are very excited to further broaden our Perfect Day Collection with Perfect Day Mexico and to develop the Southernmost hotel on Earth,” said Royal Caribbean International CEO Jason Liberty.
Royal Caribbean brought its dividend back
As part of its second-quarter earnings call, Royal Caribbean showed it was all the way back from the dark days of Covid.
“In addition, the company’s board of directors declared a quarterly dividend of $0.40 per share payable on October 11, 2024 to shareholders of record at the close of business on September 20, 2024,” it shared.
That was an understated way to deliver news that once seemed impossible. Royal Caribbean had been pushed to the edge by a crisis nobody could have imagined, and the company had somehow not only survived but thrived beyond its pre-Covid success.
Had Liberty shouted the news like a pro wrestler celebrating winning a world championship while yelling, “Let’s f****** go!” it would not have been taken as an overreaction.
ALSO READ: Top travel agents share how to get the best price on your cruise
Now, the cruise line has built on that success.
“The Board of Directors of Royal Caribbean Cruises Ltd. today (Dec. 11) declared a quarterly dividend of $0.55 per common share payable on January 13, 2025 to shareholders of record at the close of business on December 27, 2024. This increase reflects the company’s continuing efforts to enhance shareholder returns,” it shared in a terse press release.
Are you taking a cruise or thinking about taking one? Visit our Come Cruise With Me website to have all your questions answered.
