There's some positive news for Royal Caribbean in particular, with analyst Felix Wang of Hedgeye Risk Management noting that Oasis and Allure "are doing really well on the booking front."
But they still have nothing on Royal's latest: "From what we're seeing Quantum pricing power is ridiculously above the rest of Royal Caribbean's fleet." Not to mention vs. ships from other companies.
"If you look at April the average per diem is up around 70% on Quantum vs. other Royal ships and Norwegian Breakaway," says Wang. He calls such differential not only "phenomenal," but significantly beyond the differential of Oasis and Allure when they were new to the market.
Meanwhile, in the U.K. market, Royal's next new ship, Anthem, is "pricing fine" vs. P&O Britannia. "They have an enormous premium there as well," says Wang. He does postulate, however, that Anthem might be feeling a slowdown of the market. "Anthem pricing is slightly falling now so I'm wondering if it has topped out. They had a great October/November but December/January hasn't risen that much. It could be due to general concerns about the strength of the U.K. market."
Such concerns might not last too long, as Anthem will move to a U.S. home port in the fall.
The pricing power is well and good for Royal's flagships, but Wang says it doesn't extend to the fleet as a whole. In particular, Royal's older ships are minus 10% in yield from last year. "It's great that their newer ships are doing well," says Wang, "but at some point Royal may have to cut pricing dramatically for the older ships, especially those introduced before 2006."