Report: Cruise Passengers Spending Less on Board, Hurting Profits

Royal Caribbean International Logo SmallRoyal Caribbean, the second-largest cruise company in the world, released its quarterly profit results to Wall Street and they were down by two-thirds. The company indicated that the line was dealing with several mishaps during the quarter, and shortened or interrupted cruises (mass illness, weather) cause cruise passengers spend less on-board. Royal Caribbean International said lower on-board spending combined with increased operating costs are to blame for the large decline.

The cruise industry as a whole was taking a beating in the news with several high profile cases of illness on board, and that included the largest cruise operator in the world, Carnival. They too recently cut the forecast for this year due to a rough first quarter as company profits were down and spending on advertising was up.

The future is looking good for Royal Caribbean and the cruise industry though, with bookings up nearly 20%. The cruise line also indicated that demand for cruises remains high in China and Europe, and the company hopes to take advantage in those markets.

Source: Reuters/CNBC