Royal Caribbean Results Soar, Employees Share The Wealth
Bruce Parkinson, Open Jaw
Royal Caribbean stock shot up this week, certainly in response to a solid earnings report, but possibly impacted by a healthy dose of humanity exhibited by the company.
A Q4 earnings call revealed that strong demand for cruising coupled with disciplined cost management helped deliver another record year for the company.
RCL's net income was US$1.63 billion for the full year 2017. That compares with last year’s net income of US$1.28 billion. Gross yields for full year 2017 were up 5.7%, while net yields were up 6.4%.
More good news: the company's forward bookings are stronger than last year and at higher pricing.
Chairman/CEO Richard Fain said the company had a number of “aspirational goals” for the year, and in order to achieve them, “we had to raise our game in many, many areas."
He cited improvements in areas ranging from surpassing financial targets to onboard product. Fain then went on to describe how the line is raising its game in terms of how it rewards employees.
"Because this achievement would not have been possible without the passion and the commitment of our people, the company has decided to give them a surprise reward,” Fain said. “Every one of our 65,000 employees will receive a bonus equal to 5% of their salary. We're calling this, ‘The Thank You, Thank You’ bonus.”
The $80 million program is not a cash bonus. "It will be in the form of equity grants vesting over three years, thereby giving every employee a stake in the company's future," said Fain.
"The program also includes major upgrading of crew facilities and recreation areas. Our people are what make our business. We wanted to show our appreciation in a tangible way, and we wanted it to reach every employee regardless of level of the organization."
Later, Fain noted, "Ethical leadership is an important part of our world view."
For full year 2018, net yields are expected to increase 1.5-3.5%. "Our yields are increasing on top of an exceptional 6.4% net yield growth experienced in 2017," said CFO Jason Liberty, who called that development “quite extraordinary and a testament to the strength in the demand for cruising and our brands."
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.