Hurricanes cost Royal Caribbean $55M, but Q3 profit still rises

Royal Caribbean Cruises Ltd. reported an 8.6% increase in
third-quarter net profit despite costs from the most destructive hurricane
season in its history.

Net income rose to $752.8 million from $693.3 million. If not
for five hurricanes in September, including two in the Pacific, Royal Caribbean
said that net profit would have been $55 million more.

“That made it by far the most expensive hurricane
season in our 45-year history,” chairman Richard Fain said in a conference
call with analysts.

Royal Caribbean said strong close-in demand for cruises in
July and August and higher onboard spending helped it offset hurricane-related
costs and lost revenue from canceled cruises and a decrease in bookings.

Fain said demand fell “precipitously” during
September, both for cruises that month and for future bookings. The softness
lasted about six weeks but bookings for virtually all itineraries are back to
normal now, Fain said.

Fain said he thinks that travelers have become “inured”
to disruptions such as hurricanes or terror attacks, so that they are affecting
booking patterns for shorter time periods than in the past.

Royal Caribbean said its forecast of adjusted full-year
earnings of up to $1.59 billion still holds.

In the third quarter, revenue advanced slightly to $2.57
billion from $2.56 billion a year earlier. 
Onboard revenue was up 5%, led by increases in internet usage and shore
excursions.