Royal Caribbean chairman talks its COVID resilience, bets on more premium customer experiences

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Five years after the pandemic brought global travel to a standstill, Royal Caribbean (RCL) has emerged as one of the strongest players in the cruise industry.

Richard Fain, CEO of the Miami-based company from 1988 to 2022, said the company’s recovery is the product of long-term discipline and a bit of optimism.

“I’m willing to accept short-term costs for an amazing long-term future,” he told Yahoo Finance Executive Editor Brian Sozzi on the Opening Bid Unfiltered podcast.

Royal Caribbean stock is up roughly 450% since 2021, compared to Carnival’s (CCL) 127% jump and Norwegian Cruise Line’s (NCLH) 49% gain.

However, its shares fell 8.5% on Tuesday after its latest earnings report as investors digested a revenue miss and conservative forward guidance. Revenue came in at $5.14 billion, up 5.2% year over year but shy of estimates for $5.17 billion, according to Bloomberg data. Adjusted earnings per share climbed 9.6% to $5.75, beating expectations of $5.67.

The earnings print signaled that demand, while strong, isn’t growing as fast as some had hoped.

Royal Caribbean has raised its full-year 2025 guidance throughout the year — from $14.55 to $15.55 after Q1 to $15.58 to $15.63 following its Q3 results — though it still missed the consensus estimate of $15.68.

The company’s initial 2026 EPS guidance of roughly $17 also fell short of the Street’s $18.16 consensus, raising concerns that earnings growth could slow as costs rise and competition intensifies in the Caribbean market.

Analysts note that Royal Caribbean has a history of conservative forecasts, which could leave room for upside if conditions improve.

Melius Research’s Conor Cunningham said in a note that the company’s “floor for 2026 earnings is set with upside.”

“The algo of moderate capacity growth, moderate yield growth, and cost execution is working,” Cunningham wrote, pointing to expanding margins and demand across key markets like the Caribbean and Europe.

Fain, who has remained chairman but will transition the role to current CEO Jason Liberty in the fourth quarter, credited Royal Caribbean’s long-term growth to its focus on the guest experience, from serving better dinners to adding entertainment options.

“People saw that, in fact, when you do something better, they will come and they will pay to come,” he said.

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The company’s performance is worth noting, considering it spent about 15 months without sailing during the pandemic, burning hundreds of millions of dollars a month while ships sat idle.

“There were plenty of ‘oh shit’ moments,” Fain recalled. “But we said at that very first day, ‘Bullshit. We are not going to be victims here.'”

Now, the company is operating at record occupancy levels through 2026, adding capacity, and rolling out new ships. It’s also expanding its portfolio of private destinations, including private islands and beach clubs that are accessible only to its cruise guests.

For Fain, the company’s rebound speaks to a mindset that outlasted crisis. His new book, “Delivering the Wow: Culture as Catalyst for Lasting Success,” dives into how culture and communication helped Royal Caribbean weather the storm.

“There was never a point where I really said, ‘Ah, I’m not sure we can make this,'” Fain said.

Francisco Velasquez is a Reporter at Yahoo Finance. Follow him on LinkedIn, X, and Instagram. Story tips? Email him at francisco.velasquez@yahooinc.com.

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