Cruise giant cuts revenue forecast despite strong demand

Royal Caribbean revised its annual revenue forecast downwards, now expecting approximately 9% growth for 2026, a decrease from the prior 10% projection. This adjustment is attributed to prolonged geopolitical tensions affecting bookings for certain itineraries, though overall demand for cruises remains robust. The company highlighted that consumer desire for vacation experiences is strong and guests are willing to spend on memorable trips.

Despite the lowered revenue outlook, Royal Caribbean increased its annual adjusted profit forecast to a range of $17.73 to $17.87 per share. This upward revision stems from stronger-than-anticipated second-quarter performance and an optimistic view for the remainder of the year. The cruise operator reported a 6% revenue increase to $4.83 billion for the quarter ending June 30, surpassing analyst expectations.

Increased onboard spending and effective cost controls appear to be mitigating the impact of higher fuel expenses, which are linked to Middle East tensions. Although quarterly fuel expenses rose 27% year-over-year to $355 million, the company slightly reduced its full-year fuel expense forecast. Notably, bookings for 2027 are performing ahead of historical trends, even for routes affected by geopolitical disruptions this year.