Core Viewpoint - The consumer's determination to travel is driving a significant increase in global air passenger traffic, with a 15% year-over-year growth in the first half of 2025, particularly strong in Asia-Pacific and Europe [1][2]. Group 1: Travel Market Dynamics - Despite a nearly 10% decline in the U.S. dollar, which typically increases the cost of international travel, strong wage growth in the U.S. is offsetting this effect, leading to robust demand for travel [2]. - The combination of increased income and pent-up demand for previously inaccessible international destinations is fueling the travel market [2]. Group 2: Company-Specific Insights Booking Holdings - Booking Holdings Inc. (NASDAQ: BKNG) is trading at over $5,600 per share, with a 12-month stock price forecast of $5,388.37, indicating a potential downside of 5.84% [4]. - The company reported earnings exceeding expectations by nearly 30% in its most recent quarter, showcasing its pricing power and impressive 86% gross margins, driven by artificial intelligence [5]. - Booking's strongest periods are typically in the second and third quarters, supported by demand for travel to Asia Pacific and Europe [5]. Marriott International - Marriott International (NYSE: MAR) has a current stock price of $280.08, with a 12-month forecast of $275.90, suggesting a downside of 1.49% [7]. - The company reported a global RevPAR increase of approximately 4% in Q1 2025, with international RevPAR up more than 6%, particularly strong in Asia Pacific [8]. - Marriott's diverse brand portfolio and expansion into luxury and upscale properties allow it to target less price-sensitive consumers [9]. Royal Caribbean - Royal Caribbean Cruises Ltd. (NYSE: RCL) has a current stock price of $334.10, with a 12-month forecast of $280.40, indicating a downside of 16.07% [11]. - The cruise industry is experiencing a recovery, with Royal Caribbean's stock up over 106% in the last 12 months and more than 40% in 2025 [12]. - The company has significantly reduced its debt, refinancing approximately $3 billion in short-term debt and repaying about $2.1 billion in principal, resulting in a debt-to-equity ratio of 2.21, which is more than 60% lower than its 2022 peak [13].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 increased by 24.9% year over year to almost $900 million, driven by increased capacity, higher occupancy, and higher revenue per passenger cruise day (PCD) [19][20] - Adjusted gross margin rose by 23.8% year over year to $613 million, resulting in a net yield of $544, which is 7.1% higher than Q1 2024 [19][20] - Adjusted EBITDA for Q1 totaled $73 million, improving by over $77 million compared to the same quarter last year, marking a significant year-over-year increase [20] Business Line Data and Key Metrics Changes - **River Segment**: Capacity PCDs increased by 22.3% year over year, with occupancy at 93.9%, about 180 basis points higher than last year. Adjusted gross margin grew by 21.5% year over year, while net yield was $593, down 2.7% year over year [21] - **Ocean Segment**: Capacity PCDs increased by 10.4% year over year, with occupancy at 94.4%. Adjusted gross margin increased by 25.3% year over year to $395 million, and net yield was $499, up 13.6% compared to the previous year [22] Market Data and Key Metrics Changes - Advanced bookings for 2025 reached $5.5 billion, which is 21% higher than the previous year at the same point in time, with 92% of capacity booked [26] - For 2026, 37% of capacity is already booked with $2.7 billion in advanced bookings, which is 11% higher than the 2025 season at the same point in time [27] Company Strategy and Development Direction - The company focuses on disciplined execution of its growth strategy, emphasizing direct marketing to stimulate demand without resorting to pricing promotions [12][56] - The company is committed to expanding its fleet, with plans for additional ocean and river vessels, reflecting a strategic expansion across both offerings [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model and consumer demand, noting that bookings have remained strong despite macroeconomic uncertainties [9][15] - The company highlighted a strong balance sheet with a net debt to EBITDA ratio of two times, providing stability and flexibility for future investments [14][23] Other Important Information - The company announced the construction of the Viking Libra, the world's first hydrogen-powered cruise ship, set for delivery next year [16][17] - The company has a total cash and cash equivalents of $2.8 billion as of March 31, 2025, with an undrawn revolver facility of $375 million [23] Q&A Session Summary Question: Pricing and Promotions - The company has not turned to pricing promotions for future seasons, indicating that pricing dynamics are nuanced and dependent on inventory sold [38][39] Question: Booking Window Changes - Management confirmed that there have been no material changes to the booking window, which remains similar to prior years [40][41] Question: Diverging Net Yield Growth - Management explained that the ocean segment typically operates year-round, while the river segment has a seasonal nature, affecting yield comparisons [46][48] Question: Consumer Demand and Marketing Strategy - Management emphasized that direct consumer engagement is the primary strategy to stimulate demand, rather than adjusting pricing [55][56] Question: Geopolitical Situations and Capacity - The company is prepared to reactivate vessels currently laid up in Russia if geopolitical conditions improve, which would contribute positively to EBITDA [103] Question: Cost Management - The company focuses on efficient vessel design and strong internal discipline to manage costs, aiming to enhance margins while maintaining product quality [115][117]