Royal Caribbean CEO 'optimistic' about future of sailing despite growing recession talk
The cruise line operator says 'a lot of people will continue to cruise because the value is so high'
Despite high inflation and growing concerns of a recession, consumers continue to prove they are willing to spend on experiences, according to Royal Caribbean International CEO Michael Bayley.
The operator of Royal Caribbean, Celebrity and Silversea Cruises continues to see travel demand returning, and as a result remains "quite optimistic about the future," Bayley told FOX Business. The chief executive added, the company considers itself a family brand even with more than 50,000 employees on 26 ships around the globe.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RCL | ROYAL CARIBBEAN GROUP | 241.76 | -2.74 | -1.12% |
"Clearly customers want to go on vacation. There is a lot of interest in experiences," Bayley said. "Most importantly what we see is people value relationships and family connections more, and they are seeking time together with families and of course, for Royal Caribbean, that's our sweet spot."
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Bayley said demand picked up immediately after various coronavirus-related restrictions and protocols eased. However, "that increase in demand has stayed with us," he added.
Even with growing talks of a potential global recession, Bayley doesn't foresee consumers becoming discouraged from traveling.
Royal Caribbean International debuts new ship Icon of the Seas. (Royal Caribbean International)
"Cruise has a remarkably strong value proposition, high quality, great value," Bayley said. "And typically what we see when we go into these bumpy periods is the cruise does pretty well. A lot of people will continue to cruise because the value is so high."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RCL | ROYAL CARIBBEAN GROUP | 241.76 | -2.74 | -1.12% |
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He says Royal Caribbean feels good about bookings both into the fourth quarter and into next year.
One of the main things driving the cruise operator's confidence amid the uncertain economic environment is its latest innovation, dubbed Icon of the Seas. The ship, which had been in the works over the past five years, has been described as the "the next generation of family vacation," according to Bayley.
"We sought out to create the world's best family vacation five years ago when we began the design process for Icon of the Seas," Royal Caribbean Chief Product Innovation Officer Jay Schneider told FOX Business.
The ship caters to voyagers who are prioritizing experiences by offering new neighborhoods, updated state rooms and an upgraded entertainment venue.
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Royal Caribbean International debuts new ship Icon of the Seas. (Royal Caribbean International)
"People continue to seek out, you know, memories with their family, new experiences they've never done before," Schneider said. "And those sort of enriching moments are things that will be offered … [on] Icon of the seas."
Its first ever sailing is slated for January 2024.