If you’re planning a trip on one of Royal Caribbean’s floating cities, you’ll have to book your cruise early. The days of last-minute deals have officially come to an end.
The cruise line announced this week that it will stop offering discount deals 30 days prior to a ship’s sail date on trips lasting more than four nights. The policy will apply to ships in North America, the United Kingdom and Ireland.
The world’s second-largest cruise company first announced a move to phase out the fire-sale practice in April, when it starting cutting back on last-minute deals 10, 20 or 30 days before a ship’s sail date.
But Royal Caribbean Cruises Ltd. chairman and CEO Richard Fain said the tiered approach at cutting flash deals was causing confusion among travelers who weren’t sure when the deals stopped for their particular cruise.
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“We did decide that having different rules and different itinerary lengths was possibly confusing and definitely unnecessary,” Fain said. “We now think we’ve got it right and we do not expect more changes in the near future.”
Last-minute deals “cheapen” the Miami-based company’s brand, Fain said, and upset loyal customers who book cruises ahead of time.
Passengers who book three- or four-night cruises, who are traditionally late bookers, will still be offered last-minute deals.
The announcement came during the company’s quarterly earnings, when Royal Caribbean announced a surge in fourth-quarter profit, helped by lower fuel costs. But for the year, the line’s profit declined by 12.8 percent over 2014.
The guidance for 2016, too, fell short of Wall Street expectations, causing the line’s share value to drop Tuesday. It has recovered slightly and closed Thursday at $73.58 — still 12.9 percent lower than before it released earnings.
For the fourth quarter, the cruise line operator’s profit rose 88 percent to $206.8 million, or 94 cents per share. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 92 cents per share.
Revenue rose 5 percent to $1.9 billion in the period, falling short of Wall Street forecasts. Seven analysts surveyed by Zacks expected $1.95 billion.
Operating costs fell 5.7 percent to $1.17 billion as lower fuel costs helped offset lackluster revenue growth.
For the year, the company reported profit of $665.8 million, or $3.02 per share. Revenue was reported as $8.3 billion.
For the current quarter ending in April, Royal Caribbean expects its per-share earnings to be 30 cents, while it expects full-year earnings in the range of $5.90 to $6.10 per share. Analysts surveyed by FactSet had been expecting earnings of 46 cents for the first quarter and $6.26 for 2016.
Royal Caribbean said that weakness in Latin America economies is prompting it to refocus its Pullmantur brand on the core market of Spain. But, difficulties in Latin America were offset by new hardware, a stronger Caribbean presence and a successful winter season in China, the company said. Royal Caribbean owns U.S. lines Royal Caribbean International, Celebrity, Azamara Club Cruises and European brands Pullmantur, CDF Croisieres de France and Tui Cruises.
This report was supplemented with material from The Associated Press.