Royal Caribbean raises profit forecast as demand rebounds

(Reuters) – Royal Caribbean (NYSE:) Cruises Ltd raised its full-year profit forecast on Thursday, betting on higher ticket prices and pent-up demand from affluent consumers.

Shares of the Miami, Florida-based company were up more than 4% in premarket trade after its first-quarter revenue of $2.89 billion also topped analysts’ average estimate of $2.82 billion, according to Refinitiv data.

Wealthy consumers, relatively less impacted by inflation, have splurged on cruise vacations including on-board amenities such as spas and poker after the easing of pandemic restrictions.

Royal Caribbean has also been raising ticket prices to shield its margins from the impact of higher fuel and energy costs due to supply chain constraints, worsened by the Russia-Ukraine crisis.

Earlier this week, rival Norwegian Cruise Line (NYSE:) Holdings Ltd also raised its annual profit forecast, betting on higher ticket pricing, pent-up demand and robust on-board spending from affluent customers.

Royal Caribbean now expects full-year adjusted profit between $4.40 and $4.80 per share, compared with its earlier forecast of $3.00  to  $3.60 per share.