Royal Caribbean Raises 2026 Earnings Forecast Following Eventful Third Quarter

Cruise giant Royal Caribbean Group reported 9% revenue growth in its third-quarter results, along with strong advance bookings for 2027 and more details on plans to expand into all-inclusive resorts through its recent partnership with Sandals and Beaches.

The company has raised its full-year earnings forecast after reporting stronger-than-expected Q3 results, supported by continued high demand, particularly for cruises in Europe and the Caribbean.

It reported third-quarter revenue of US$5.6 billion, up 9% year over year, while net income reached US$1.7 billion, compared with US$1.6 billion in the same period last year. 

Royal Caribbean welcomed 2.7 million guests during the quarter, a 9% increase, while capacity grew 8%. Occupancy, measured by load factor, reached 112%, reflecting cabins accommodating more than two guests.

“Our third quarter results reflect continued strong consumer demand for our vacation experiences and the accelerated momentum across our industry leading brands,” said Jason Liberty, Chairman and CEO of Royal Caribbean Group.

Cruising into 2027

For travel advisors, one of the most significant indicators is the company’s booking momentum heading into 2027. Since its previous earnings announcement, overall booking volumes have increased in the mid-teens across major sales channels, while bookings for 2027 sailings have risen in the high teens.

Royal Caribbean says 2027 reservations are pacing ahead of historical levels at higher rates, suggesting continued consumer willingness to spend on cruise vacations.

Pre-cruise purchases and onboard revenue also remain strong, with third-quarter revenue rates exceeding last year’s levels. Fourth-quarter pre-cruise revenue rates are similarly ahead of 2025.

Net Yields, a key measure of cruise revenue performance, increased 0.9% during the quarter, helped by stronger-than-anticipated close-in bookings in Europe and the Caribbean.

Sandals Partnership Expands Horizon

A major strategic development is Royal Caribbean Group’s September announcement that it will acquire a 50% interest in Sandals and Beaches Resorts. The agreement would extend the company’s reach beyond cruising into the Caribbean all-inclusive resort market.

The Sandals and Beaches portfolio includes 18 operating resorts, three properties under development and more than 1,000 acres of undeveloped Caribbean land.

Royal Caribbean sees opportunities to cross-market the brands, noting that approximately 30% of its cruise guests also take all-inclusive vacations, while a similar proportion of Sandals and Beaches customers also cruise.

The transaction is expected to close in early 2027, subject to regulatory approvals and other customary conditions. Sandals and Beaches will retain their existing brand identities and operating leadership.

Looking ahead, fourth-quarter revenue is also forecast to grow 9%, but the company cautioned that higher fuel costs and currency movements will partially offset its improved operating performance.

Looking further ahead, Royal Caribbean says it remains on track to achieve its financial targets for 2027, including approximately 20% compound annual growth in adjusted earnings per share from 2024 through 2027.

For travel advisors, the results reinforce the strength of cruise demand, while the Sandals and Beaches investment signals Royal Caribbean’s ambition to capture a larger share of clients’ overall vacation spending.