Royal Caribbean Group increases 2024 guidance on accelerating demand

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Written by Teijo Niemelä Teijo Niemelä

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Published: 23 February 2024 23 February 2024

Royal Caribbean Group provided on Wednesday an update on demand and updated its 2024 guidance.

The company continues to be very encouraged about the demand and pricing environment for 2024. Since its most recent update on its Q4 2023 earnings call, the WAVE booking season has exceeded the company's initial expectations, with the first 5 weeks of the year resulting in the best WAVE booking weeks in the company's history. Bookings have been significantly higher than during the same period last year, with the back half of the year up by more than the front half. For 2024, all four quarters and all key products are booked ahead of the same time last year in both rate and volume. Consumer spending for onboard purchases continue to exceed prior years driven by greater participation at higher prices, indicating quality and healthy future demand.

"Since our last earnings call, robust demand for our vacation experiences has significantly exceeded our initial expectations," said Jason Liberty, president and CEO of Royal Caribbean. "As a result, we are increasing our 2024 guidance on stronger revenue outlook, and we expect to achieve all Trifecta goals in 2024. Trifecta marks an important milestone as we remain intensely focused on delivering a lifetime of vacations and priceless memories for our guests while delivering exceptional long-term shareholder value."

As a result of the strong WAVE season, the company is increasing its 2024 Adjusted EPS guidance by $0.40 compared to its February guidance. For the full year, Adjusted EPS is now expected to be $9.90 to $10.10 driven by an increase in constant currency net yield growth of approximately 100 bps compared to the February guidance. Approximately $0.15 of the full year increase in adjusted EPS is driven by an improved revenue outlook for the first quarter of 2024. The company now expects to achieve all Trifecta goals in 2024.

APT and Seabourn announce exclusive multi-year luxury expedition partnership

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Written by Teijo Niemelä Teijo Niemelä

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Published: 22 February 2024 22 February 2024

APT, Australia’s leading luxury tour and cruise operator, and Seabourn, the leader in ultra-luxury travel and expedition travel, have announced an exclusive multi-year partnership that will redefine luxury expedition cruising for APT guests. The announcement event, held in Sydney on Seabourn Odyssey on February 21st, revealed APT will charter two of Seabourn’s ultra-luxury expedition vessels, Seabourn Venture and Seabourn Pursuit, to destinations including: the UK, Faroe Islands, Iceland, Greenland, the Kimberley, and Antarctica in 2025.

The partnership brings together APT’s near century of touring expertise with Seabourn’s reputation for delivering extraordinary luxury at sea. Guests can expect to experience meticulously curated itineraries which APT is renowned for, including signature experiences, luxury dining, and all-inclusive journeys that blend with the elegance and comfort of Seabourn’s fleet.

APT Travel Group’s Chief Executive Officer, David Cox, said, “We are excited to embark on this journey with Seabourn, to create unforgettable travel experiences for our guests. This collaboration represents a significant milestone for both companies as we elevate the luxury experience for our guests in partnership with Seabourn.”

Seabourn’s President, Natalya Leahy, agreed, “We are delighted to join forces with APT, a trusted name in the travel industry renowned for its commitment to excellence. Seabourn is known for offering the pinnacle of ultra-luxury experiences, and we look forward to sharing this with APT guests. Together, we’re excited to offer travellers exclusive opportunities to explore the world in unprecedented luxury."

Both Seabourn Venture and Seabourn Pursuit offer the same luxurious small ship experience that travelers have come to expect from Seabourn, enhanced by world-class equipment that allows the line to offer its widest range of expedition activities led by an expert 24-person world-class expedition team of scientists, scholars, naturalists, and more. Designed and built for remote, diverse environments to PC6 Polar Class standards, the ship includes a plethora of modern hardware and technology that extends the ship’s global deployment and capabilities. There is close to 30,000 square feet of deck space and special touches at every turn, as well as indoor and outdoor guest areas with nearly 270-degree views. In addition, a 4K GSS Cineflex Camera is mounted on the mast of the Constellation Lounge and capable of broadcasting imagery from miles ahead on monitors located throughout the ship and in guest suites. The ships are also equipped with enhanced Wi-Fi connectivity with SpaceX’s Starlink, providing its expedition guests with faster service, greater connectivity and more reliable Wi-Fi wherever Starlink’s services are available.

Seabourn Pursuit and Seabourn Venture, like the rest of the ships in the Seabourn fleet, offer an abundance of space and elegance, eight dining experiences serving gourmet cuisine, and luxurious all-suite accommodations, including a pair of two-level Wintergarden suites.

Cruises are on sale now for Northern Europe, the Arctic and the Kimberley in 2025 with APT’s brand-new Antarctica itineraries set to launch in early March for 2026 departures.

Seatrade Cruise Global announces theme panelists for 2024 State of the Global Cruise Industry Keynote

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Written by Teijo Niemelä Teijo Niemelä

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Published: 22 February 2024 22 February 2024

Seatrade Cruise Global, the cruise industry’s preeminent annual business-to-business event, announces its highly anticipated 2024 State of the Global Cruise Industry Keynote lineup, presented in partnership with Cruise Lines International Association (CLIA) and sponsored by the Hong Kong Tourism Board.

The conference’s opening session, taking place from 9:30 – 11:30 AM on Tuesday, 9 April, will unite industry top executives from the world’s largest cruise companies for a round-table discussion inspired by this year’s conference theme – The Evolution of Cruise. Led by moderator Anne Kalosh, Seatrade Cruise News’ Editor, the insightful dialogue will cover key topics surrounding the future of the industry, such as environmental sustainability, market demand trends for 2024 and beyond, digitalisation, the use of AI, and more.

Featured panellists include:

– Josh Weinstein, President, CEO & Chief Climate Officer, Carnival Corporation & plc
– Kelly Craighead, President & CEO, Cruise Lines International Association
– Pierfrancesco Vago, Executive Chairman, Cruise Division, MSC Group
– Harry J. Sommer, President & CEO, Norwegian Cruise Line Holdings Ltd.
– Jason Liberty, President & CEO, Royal Caribbean Group

"The conference will kick off with a lineup of dynamic leaders digging into the most timely and critical issues of the global cruise business," Kalosh said. "I'm looking forward to what comes out of this powerhouse panel. With the industry back in full force I expect a lively discussion that hones in on opportunities as much as challenges."

The discourse will explore the industry’s commitment to pursuing net zero emissions by 2050, new environmental technologies, low to zero-GHG fuels and energy sources being actively tested on new ships and the need for governments and fuel suppliers to help make the availability of competitively priced sustainable fuels at scale a reality. In addition, cruise line leaders will share their perspectives on the impact of world events on cruising, product innovation, and the major companies' return to newbuild orders.

“With major innovations on the horizon and consumer demand for cruising on the rise, this year is an exciting time for the cruise industry,” said Kelly Craighead, President & CEO, Cruise Lines International Association. “We look forward to joining our colleagues from around the world at Seatrade Cruise Global this April, and the opportunity to collaborate and demonstrate how cruise is advancing an ambitious sustainability agenda and pursuing innovations – both at sea and on shore – as it sails to an even better future.”

Attendees can enjoy a line-up of thought-provoking forums and workshops throughout the four-day conference, explore new developments across sustainability, technology, and entertainment with new sessions focused on AI and cruising, navigating unchartered waters and an entire one-day programme dedicated to developments in cruise retail, curated in partnership with the Moodie Davitt Report. The 2024 conference will also see the return of the Tomorrow’s Talent Today programme along with popular panels such as the European Cruising CEO Panel, Luxury Cruising CEO Panel, and Expedition Cruising CEO Panel.

Seatrade Cruise Global is returning to the Miami Beach Convention Center on 8-11 April 2024, alongside F&B@Sea, taking place at Mana Wynwood Convention Center on 10-11 April 2024. F&B@Sea is a one-of-a-kind cruise food & beverage experience aimed at those responsible for food, beverage, guest customer experience and hotel ops. Attendees can seamlessly explore both events with the convenience of shuttle buses running every 30 minutes between the two events on 10-11 April 2024.

Hornblower Group to re-structure

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Written by Teijo Niemelä Teijo Niemelä

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Published: 21 February 2024 21 February 2024

Hornblower Group, the parent of American Queen Voyages, which shut down yesterday, today announced that it has entered into an agreement with its investors that will strengthen the Company's financial foundation and position Hornblower for a successful future. Under the terms of the agreement, funds managed by Strategic Value Partners, LLC and its affiliates, a global alternative investment firm, will acquire majority ownership of Hornblower and provide a significant equity investment in the business. Crestview Partners will retain a significant minority position in Hornblower and become the sole owner of Journey Beyond, a stand-alone operating unit of Hornblower and the leading experiential travel provider in Australia. The agreement also provides for Hornblower to receive $121 million in new-money financing from SVP-managed funds and Crestview, and the Company's total debt will be reduced by approximately $720 million.

In connection with the agreement, Hornblower's overnight cruising business American Queen Voyages will be sold or, if a sale cannot be achieved, its operations will be wound down. Hornblower is taking this action because of the underperformance of AQV, which has not rebounded from the pandemic.

These collective actions will enable Hornblower to move ahead with a more focused portfolio, stronger balance sheet and additional financial flexibility, well-positioned to continue driving growth in its core land- and water-based experiences businesses. These core businesses are delivering excellent results and serving thousands of guests every day.

"Building on our commitment to deliver amazing experiences for our guests, Hornblower has grown to become a global leader in world-class experiences and transportation," said Kevin Rabbitt, Chief Executive Officer, Hornblower Group. "We have strong relationships with our government agency and business partners, and our core businesses are performing well with robust and growing demand."

Rabbitt added, "The steps we are taking today will enable us to address AQV and strengthen our financial foundation as we continue serving our guests and commuters around the world. With the support of our financial stakeholders, we will continue to advance our business initiatives and drive growth. We thank the entire Hornblower team for their hard work and dedication, as well as our vendors and partners across our businesses for their continued support."

David Geenberg, Co-Head of the North American Investment Team at SVP, said, "Hornblower is an outstanding company and a market leader in water-based transportation, tours and experiences, with complementary businesses and long-term contracts in attractive markets. With substantial growth potential in travel and tourism, we see significant opportunities ahead for Hornblower to further expand its leadership position. We look forward to working closely with the leadership team to help support the Company's strong operating staff, excellent service and exceptional guest experiences as we usher in Hornblower's next era of success."

Brian Cassidy, President of Crestview, added, "This transaction is an important step in ensuring Hornblower's future success, and we are enthusiastic about partnering with SVP on the Company's next growth chapter post-COVID. We are also excited about being the sole owner of Journey Beyond, which has incredible growth opportunities ahead."

Outside of AQV, Hornblower's current services will not be impacted in any way by the transaction.

Implementing the agreement

To efficiently implement the agreement and ensure an orderly sale or wind-down of AQV, Hornblower and certain of its affiliates have initiated a voluntary court-supervised and pre-arranged process under Chapter 11 of the U.S. Bankruptcy Code. Due to the overwhelming support of its investors, Hornblower expects to move through this process on an accelerated basis and emerge from Chapter 11 in approximately four months.

In connection with this process, Hornblower has received a commitment for $300 million in debtor-in-possession ("DIP") financing from Deutsche Bank Private Credit & Infrastructure to refinance the Company's existing superpriority term loan, in addition to the $121 million in new-money financing from SVP-managed funds and Crestview. Following court approval, this new financing, combined with cash generated from ongoing operations, is expected to support the business during the court-supervised process.

Separately, the Company is commencing ancillary proceedings in Canada under the Companies' Creditors Arrangement Act (CCAA) seeking recognition of the U.S. Chapter 11 proceedings in Canada.

Journey Beyond is not included in the court-supervised process.