Royal Caribbean Charts Aggressive Expansion on Record Demand, Unveils New Ship Class

Royal Caribbean Group (NYSE: RCL) capped off a record-breaking 2025 with a bullish outlook for the year ahead, using its fourth-quarter earnings call to detail aggressive expansion plans across its ocean, river, and private destination portfolios. The company's leadership pointed to unprecedented consumer demand and robust financial health as the foundation for its growth trajectory.

"2025 was an outstanding year, defined by strong demand, disciplined execution, and significant returns to our shareholders," stated Chairman and CEO Jason Liberty. The company reported delivering 9.4 million vacations, generating nearly $18 billion in total revenue, and achieving a 33% year-over-year increase in adjusted earnings per share (EPS). Operating cash flow reached approximately $6.5 billion, with $2 billion returned to shareholders via dividends and buybacks.

CFO Naftali Holtz provided granular detail on the quarter's performance, noting a 2.5% constant-currency increase in net yields on 10% capacity growth. Adjusted EPS for Q4 landed at $2.80, surpassing guidance due to favorable revenue and joint venture performance. The momentum has carried into the critical "wave season," the peak booking period. Liberty revealed the company has seen "the best seven booking weeks in its history" since the last earnings update, with 2026 already about two-thirds booked at "record rates."

Looking forward, management reiterated a framework of moderate capacity and yield growth coupled with strong cost control for 2026. The company forecasts double-digit revenue growth, net yield growth of 1.5% to 3.5%, and adjusted EPS in the range of $17.70 to $18.10, representing a 14% increase year-over-year. Operating cash flow is projected to exceed $7 billion.

The call was punctuated by significant expansion announcements. Liberty committed to adding ten more ships to the Celebrity River Cruises fleet, aiming to become one of Europe's largest river cruise operators by 2031. Separately, the company unveiled a new "Discovery Class" for its flagship Royal Caribbean brand, with two firm orders and options for four additional vessels. While details were scarce, brand president Michael Bayley indicated the new class would be distinct from existing offerings.

On the destination front, the newly opened Royal Beach Club on Paradise Island in Nassau was highlighted as an immediate success, rapidly becoming a top-rated experience for guests. The company also continues to integrate AI and "disruptive technologies" across commercial and operational functions, citing improvements in personalization, energy management, and cost efficiency.

In response to analyst questions about potential overcapacity in key markets like the Caribbean, Liberty expressed confidence, noting current pricing remains higher than the previous year and industry behavior appears "more rational" than in past cycles.

What Industry Observers Are Saying

David Chen, Travel Industry Analyst at Horizon Insights: "Royal Caribbean's results are a clear barometer for the premium experience economy. Their capacity to maintain yield growth while significantly expanding capacity is impressive. The strategic bets on river cruising and new ship classes show they're not just riding the wave but actively shaping the future market structure."

Marcus Thorne, Portfolio Manager at Nautical Capital: "The guidance for $7B+ in operating cash flow is the standout figure here. That level of cash generation provides immense flexibility for debt reduction, shareholder returns, and funding this expansion without straining the balance sheet. The 2026 EPS guide suggests the Street's models might need upward revisions."

Sarah Jennings, Founder of 'The Conscious Traveler' Blog: "It's staggering. While they tout AI and biofuel blends, the core model is still about pumping ever-larger ships into sensitive ecosystems. A 6.7% capacity increase year-over-year? Where's the genuine sustainability roadmap that matches the growth ambition? This is a textbook case of prioritizing shareholder returns over planetary responsibility."

Robert Flynn, Retired Cruise Executive: "The move into river cruising is shrewd. It captures an older, affluent demographic and leverages their existing loyalty base—80% of early bookings from existing customers is a telling stat. It diversifies their product mix away from just mega-ships and mitigates geopolitical or regional demand risks."