Royal Caribbean Cruises is expecting strong bookings into the western Caribbean this year, particularly Cuba.
"Demand has been strong and we're booking ahead of same time last year in the Caribbean, so we're quite pleased with the performance," said Royal Caribbean International chief executive Michael Bayley during an analysts call on first-quarter results.
"The western Caribbean and other itineraries have been performing particularly well, including the Cuban itineraries, which we've almost doubled capacity into Cuba this year," he added.
Royal Caribbean International, owned by Royal Caribbean Cruises, was given approval to sail to Cuba in late 2016 and since then has added itineraries for its Empress of the Seas and Majesty of the Seas cruiseships.
He said that Cuba and the western Caribbean accounts for 51% of Royal Caribbean International's booked capacity to the Caribbean for all of 2018.
Overall, the Caribbean made up 70% of Royal Caribbean International's bookings for this year's first quarter and will account for about 45% in the second quarter, almost 40% in the third and about 57% in the fourth.
"So the environment is fairly good. It's meeting our expectations," he said. "And in fact, the last couple of weeks, we've seen quite a lot of strength in our bookings for Caribbean."
By comparison, 2018 bookings to Puerto Rico have been "quite sluggish," he said.
Royal Caribbean Cruises president Adam Goldstein said the customer satisfaction with Havana has been "very, very high" as Cuba has been a very good market for Royal Caribbean International.
"But the reality is that there is still just one functioning pier that ships can go to on either side of the pier in Havana, there's going to have to be some type of considerable infrastructure improvement that takes place over the next several years," he said.
The Caribbean government has become more efficient at using the pier on both sides, allowing Royal Caribbean International to increase the number of sailings there, he said.
"So for what it is, it's been terrific," he said. "But in the overall sense of our portfolio, it's still fairly small."
Royal Caribbean International, which has 26 ships, is sister to smaller Celebrity Cruises and Azamara Club Cruises, also owned by Royal Caribbean Cruises.
Slightly higher results for first quarter
Royal Caribbean Cruises posted a profit of $218.7m versus earnings of $214.7m a year earlier.
Revenue came in slightly higher at $1.43bn from $1.42bn.
"We are delighted to report another record-breaking quarter and to be driving towards record earnings for the year, above our initial guidance," said chief financial officer Jason Liberty.
Earnings translated into earnings per share (EPS) of $1.02 compared to $0.99 EPS for the same quarter last year, beating analyst consensus of $0.96 EPS.
The company estimates second-quarter EPS to be $1.85 to $1.90 and full-year EPS to range from $8.70 to $8.90.
