Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Group Second Quarter 2024 Earnings Call. All participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to introduce Michael McCarthy, Vice President of Investor Relations. Mr. McCarthy, the floor is yours.

Good morning, everyone, and thank you for joining us today for our second quarter 2024 earnings call. Joining me here in Miami are Jason Liberty, our Chief Executive Officer; Naftali Holtz, our Chief Financial Officer; and Michael Bayley, President and CEO of Royal Caribbean International. Before we get started, I'd like to note that we will be making forward-looking statements during this call. These statements are based on management's current expectations and are subject to risks and uncertainties. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release issued this morning as well as our filings with the SEC for a description of these factors. We do not undertake to update any forward-looking statements as circumstances change. Also, we will be discussing certain non-GAAP financial measures, which are adjusted as defined, and a reconciliation of all non-GAAP items can be found on our investor website and in our earnings release. Unless we state otherwise, all metrics are on a constant currency-adjusted basis. Jason will begin the call by providing a strategic overview and update on the business. Naftali will follow with a recap of our second quarter, the current booking environment and our updated outlook for 2024. We will then open the call for your questions. With that, I'm pleased to turn the call over to Jason.

Thank you, Michael, and good morning, everyone. I am proud to share our outstanding second quarter results and the continued upward trajectory of our business. As you saw in the press release this morning, our momentum continues. Demand for the incredible experiences our leading brands deliver continue to be robust. As a result, we achieved Trifecta 18 months early. We are reinstating a dividend, and we are raising our full year guidance. Less than two years ago, announced Trifecta, a three-year financial performance program that created the pathway back to what we internally call base camp. We said we would deliver triple-digit adjusted EBITDA per APCD, double-digit adjusted earnings per share and return on invested capital in the teens. Today, I'm delighted to share that we have achieved all three Trifecta goals on a trailing 12-month basis, 18 months ahead of the schedule. In addition, our leverage is now below 3.5 times when excluding the impact of new ships that were delivered midyear. With Trifecta accomplished and our balance sheet in the strong position, we are excited to broaden our capital allocation by reinstating a quarterly dividend of $0.40 per share. Capital returns that include a competitive dividend have always been and will continue to be a key pillar of our strategy to supplement growth as we focus on delivering long-term shareholder value. I want to thank the entire Royal Caribbean Group team for their passion, dedication and commitment. Their efforts helped accelerate our path to reaching Trifecta and will continue to ensure us to deliver the best vacation experiences responsibly, while driving exceptional financial results. Trifecta is an important milestone, but we are just getting started as our ambitions go well beyond it. We are excited by the large opportunity in front of us as we seek to take…

Thank you, Jason, and good morning, everyone. I will start by reviewing second quarter results. Our teams delivered another strong performance that exceeded our expectations, resulting in adjusted earnings per share of $3.21. The $0.51 share outperformance compared to the midpoint of our guidance is driven by better revenue across our leading brands and across key itineraries as well as approximately $0.15 per share favorable timing of expenses. We finished the second quarter with a net yield growth of 13.3%. Load factors were 108.2 and contributed approximately 300 basis points to yield growth, with the remaining increase driven by rates that were up by 10% from both new and existing hardware. OT products had double-digit yield growth with strength in close-in demand for the Caribbean and Europe that drove the outperformance in the quarter. SCC excluding fuel, increased 5.7% in constant currency. The favorable cost performance compared to our guidance is driven by favorable timing of expenses that more than offset the negative impact of stock compensation given the significant appreciation of our stock price during second quarter. Adjusted EBITDA was $1.6 billion and gross EBITDA margin was 38%. As Jason mentioned, we also achieved our Trifecta targets on a trailing 12-month basis as of the end of the second quarter. We delivered $113 adjusted EBITDA per APCD, 13% above our triple-digit target, mid-teens ROIC consistent with our target in the teens and $10.08 adjusted EPS slightly above our double-digit target. Leverage was below 3.5 times when excluding the impact of new ships that were delivered midyear, and we are on track to get very close to our double-digit carbon intensity reduction target by year-end. Our 2024 booked position remains very strong across all products and markets and continues to outpace last year in both rate and volume. The Caribbean…

[Operator Instructions] Our first question comes from the line of Steven Wieczynski with Stifel. Please go ahead.

Yeah. Hey, guys. Good morning. Congratulations, on another pretty solid beat here. So Jason and/or Naf, if we think about the guidance for the rest of the year, not to kind of touch on this very briefly, but the feedback we're getting, I would say, from investors this morning is that the embedded fourth quarter yield guide of -- I think it's just about 5% is showing a material sequential decline and could possibly indicate bookings are slowing, I guess. I'm guessing the lower yield was more a function of you guys being at essentially full load factors last year in the fourth quarter of 2023. But is there anything you would add on there? And then maybe also a little bit more color on 2025 bookings and if there's any -- been any changes from -- in booking patterns for next year as well?

Yeah. Good morning, Steve, hope all is well. So I think maybe just first starting off on the back half of the year. Obviously, our yields have grown significantly since 2019. So the back half of the year, our yields are up 25% versus 2019. And so I think our commentary of strength and how we feel about the back half of the year, I think, is still very bullish. But as you mentioned, we have been ahead of the curve in terms of bringing our business back up. And so our load factors relative to last year, our load factors were pretty normalized in the back half of last year. So really, all the yield improvement that you're seeing in Q3 and Q4 is really being driven by price. And so I think it's a really strong indication that not only the willingness to pay more, but these prices continue to increase as we build and manage demand. When we think about 2025, first, the reason why -- it's July, so we typically don't talk a lot about 2025. So it is early. We mentioned in the release that we're now in a place where we're taking more bookings for 2025 than we are for 2024. So the strength in the commentary that we talk about on pricing and pricing increasing, it very much applies to 2025 and beyond. So we feel very good. We're in a very strong book position for 2025, pricing is up and increasing are the trends that we continue to see. But I think it's important to just note again that load factor recovery is done. We are operating at full factors. I think it needs to also take into account that the yields have improved by over 25% versus 2019. So it's not necessarily a like-for-like story in the industry, I think, to point to. So I think we feel really good about 2025. The pattern show pricing continues to accelerate. And I think that, what you're starting to see in the back half of the year is still elevated compared to like what we described as our formula of success of that moderate yield growth, which is typically around 3% to 5%, and we're pointing to a yield profile that is at the very top end of that in Q4 and above. And so I think we feel that for us, if we're growing our yields moderately controlling our cost, growing our business in a disciplined way, what you see is significant margin accretion, significant return profile and continued step change step change -- significant in our earnings profile.

And Steve, I'll just add one more thing about 2019. I said it in my prepared remarks, but also remember, in 2019, the first half had an easier comp, right, because we didn't have CocoCay open. It opened in the second half of the year, and that with a lot of other structural changes, it was five years ago. It's pretty consistent through that period in terms of your growth.

Thanks for the color guys. Second question, Jason, would be around your recent change in deployment with Ovation, essentially taking that ship out of the China, home porting it on the West Coast. We've gotten a bunch of questions about this move. And I think investors are concerned at this time the China market might not be as strong as what you would have previously thought? Or maybe it's just the domestic market is just way more profitable right now. But any thoughts there as to or any color around the move there would be helpful. Thanks.

Hey, Steve, it's Michael. We're kind of in this great position of having very good market choices to make. We -- I believe in the long-term potential for China has not changed at all. Spectrum, as you know, we started operating it out of Shanghai a few months ago. It's performing very well in the market, and we feel good about the China market. It still hasn't reached the levels we're seeing in the American market. And of course, this is where we've got these good choices. And we have strong ambitions to grow the West Coast in the US. If you think about California as the sixth largest economy in the world. Navigator, which is the ship we put in the West Coast about a year or so ago has been performing exceptionally well. So we kind of faced with this choice, should we deploy Ovation into Tianjin or should we deploy into California? And we made the decision really based upon maximizing performance, but it doesn't in any way indicate that we're moving away from the China market. We're quite committed to the opportunity there. And I think you'll see that we'll be announcing in the future more deployment into China.

Great. Thanks, guys. Thanks for the color. Appreciate it.

Our next question comes from the line of Brandt Montour with Barclays. Please go ahead.

Hey, good morning, everybody. Thanks for taking my question and congratulations on the dividend announcement this morning. So first question is on the fourth quarter, just following up on Steven's question. The 5% implied yield guidance, which I know you have tougher comps, and that's all price. Can you help us understand what the sort of -- how to think about the like -- the embedded like-for-like is within that? And maybe it's easier to answer. How does that compare versus the like-for-like that you generally embed in your longer-term algo?

Yes. Well, so I would comment, Brandt, first, hope all is well. It's actually, if anything, the like-for-like is growing faster than what would be in our typical algorithm. And as new ships come on, they're meaningful, but the overall denominator is much larger. So the impact on yield profile, I mean, Icon is obviously just unbelievably successful, Utopia is crushing it. But it's a smaller percentage of our overall denominator. So really, what you're reading into that 5% is that the like-for-like is growing. And as part of that story is not just a ticket, but it's also what's happening onboard. And I think the power of our pre-cruise commerce engine is shifting more and more of that booking activity for onboard spend forward, which is also resulting in us getting our guests to have a fuller breadth of experiences, which increases our share of wallet.

Great. That's super helpful. And then just as a follow-up, and I apologize for sort of a shorter-term question, but this earnings season, we have heard from land-based -- some of land-based hotel operators made some softer comments on pricing sensitivity. I'm curious, when you look at your 2025 bookings data, what you're seeing coming in, are you starting to see any pricing sensitivity at all forming at the lower end itineraries, the older ships, your base -- your Royal Caribbean brand versus your other brands, anything that you're seeing?

Yes. We obviously -- we have the opportunity of taking on 25,000, 30,000, 35,000 bookings a day. You're going to see the cash register ring every -- pretty much every second somewhere in the world on our ships. And I know there might be a group seeking to hear that there's some type of break in the pattern, but there just isn't we're seeing our guests the booking window continues to extend, so they're planning further out, their willingness to pay more for these incredible vacation experiences continues to increase. So our pricing continues to increase into 2025 and into 2026. And that's not just happening at the short product that's happening in the ultra-luxury space as well. And I think, Brandt, it's -- people say, well, how can that that be? I think it's still just a reality there's still a 20% value gap to land-based vacation. And you get a lot of bang for the buck when you're traveling with our brands. And I think that value gap is potentially shielding us from some of that that noise that you're hearing from land-based operators. But for us, whether you look at it by product, whether you look at it by market, whether you look -- well, whether it's ticket or whether it's on board, the trends that we see is just continued acceleration on the pricing side. Now there's some reality as well that we're managing to, which is, we’re really well booked and you're never at that optimal or you too booked or under booked, but for us, we probably -- because we have less inventory to sell in the back half of this year, a lot of that pricing opportunity is also -- is going to fall into 2025.

Okay. Thanks a lot. Great quarter.

You got it. Thanks, Brandt.

Our next question comes from the line of Vince Ciepiel with Cleveland Research. Please go ahead.

Thanks. So I guess, it's kind of a question on strategy on a go-forward basis, and you touched on this in your opening comments, just getting back from the Utopia inaugural and from the moment you're boarding the ship to naming ceremony, I mean it's very clear that you're targeting this kind of get away biggest party at sea type of focus. So can you talk a little bit about how you make decisions with allocating new hardware towards this shorter sailing that's a getaway as opposed to something more like a week long vacation, family-oriented icon type experience? And I imagine that the development of your private islands close to South Florida probably unlock some of this. But what do you see as being a bigger driver in the years ahead?

Well, it's a great question, and you kind of answered a lot of the question in your question. For the Royal brand, we are very much a multigenerational family brands. We're fortunate that we've got the scale and the size. We've seen over the past couple of years that got growth in every single segment. And we know that the on-ramp for Cruise is the short product. We've known that for quite some time. We changed up our strategy some years ago with the development of Perfect Day, CocoCay and significant investment in many of our ships that we moved to the short cruise market. And we started to really aggregate that segment of our business. And the volume of new-to-cruise is significantly higher on short product than it is on longer for very logical reasons, which I think you touched on. It's just a much easier product to purchase. It's only a few days. It's less investment of time for new-to-cruise. And we found that when you get the product right, you can stimulate it a large amount of demand. And I think what we've seen with Utopia is it was a very strategic decision to take a brand new Oasis class that we started to work on some years ago in terms of the product vibe, the energy, what we're offering the customer and placing it into really, the Port Canaveral, Orlando market, drive to market, which is significant. It's a great product to put up against what we see in Orlando, and it's easy to package a trip on Utopia as well as maybe a trip to Orlando. But certainly, we've seen the demand has been outstanding for that product, and we're only in the second week of Utopia, and it is literally knocking it out of the park, exceptionally high customer satisfaction, Net Promoter Scores, the onboard revenues being just very strong. We're very pleased with the onboard revenue and guests are booking it. So, we know that if we get that product right and we can put our best foot forward, that then we'll see a significant upswing in repeat to brand because of what they've experienced with Utopia. And certainly, when you think of Icon in the seven-day market and soon to be Star of the Seas, which is also going to Port Canavera down into Perfect Day. We've got a really good, strong range of products that we can offer to the customer and they're booking it. Just as a side headline, Icon now is currently sailing at around 132% load factor, which is -- we're just delighted with very high customer satisfaction.

Yeah. And Vince, I think just to add, because I think Utopia is just a great example of our intentionality. I mean each of our brands are hyper-focused on understanding the different segments, the consumer of today and the consumer of tomorrow and growing demand. And our commentary around what's happening with the younger generation and half of our guests are now in that category, though I consider myself young but I'm not in that category, I guess. But it's us trying to address these multiple generations, these multiple experiences that people are looking to collect and trying hard to meet our guests there. And I think you can see that whether you're looking at Utopia with the short, whether you're seeing that with Icon on seven, but you see that in Celebrity, you see that with Silversea. And our goal is to really make sure we have an experience that matches with the guests at different points in life and that goes to our overarching strategy of having a lifetime of vacations.

Got it. That's helpful. So the Michael Bayleys and the millennials of the world, like Utopia, it sounds like. Question on 2025 yield setup. I think you got into this a little bit when asked for this on 4Q like-for-like. But when you think about next year, you have another half year of Utopia, you have Star coming, you've Xcel at the tail end, you've Royal Beach Club, like there seems to be a number of drivers incremental to the like-for-like that could be supportive of yield growth. And then you also mentioned the denominator is much larger now. So do you expect these other factors to be yield accretive next year an additional like-for-like or like-for-like is still the larger driver? How should we be thinking about that?

Yeah. Well, I think when you – certainly a full year of Utopia, a full year or half a year of Star will definitely be something that I would point to that will contribute to our yield improvement next year as well as like-for-like. Xcel is at the very, very end of the year, and Royal Beach Club will be towards the back half of the year, and that will ramp itself up as we typically do to make sure it's operationally perfect. And so I think those are the -- I think Xcel and the Royal Beach Club will probably be more of a driver in 2026 than it will be in 2025. But certainly, that new capacity is -- it benefits us. And what we're seeing in the like-for-like pricing is that we expect that to be a meaningful contributor to our yields in 2025, as well as, by the way, onboard spend activity.

Great. Thanks.

Sure.

Our next question comes from the line of Matt Boss with JPMorgan. Please go ahead.

Great. Thanks and congrats on another great quarter.

Thanks, Matt.

So Jason, with all your Trifecta targets hit, you cited today that you're just getting started. So maybe could you elaborate on what that means in terms of global market share based on new customer trends that you're seeing today? And then Naftali, maybe just the multiyear margin opportunity. EBITDA margins exit this year, 200 to 300 basis points above 2019. Where do you see us going from here?

Well, I think -- so the comment on the -- just getting started and you're all very familiar with this. But when we've talked about Trifecta, and even internally, we talked about it as base camp. So we've hit it. We've announced we're hitting it, but you won't see anybody here like doing victory laps. It's getting our business. We're now back to full strength, full financial health. And if you just take what we've talked about with our formula of moderate yield growth, cost discipline, discipline in the growth of our business, it drives significant margin and returns for the business. You combine that with the land-based things like the World Beach Club in the Bahamas and the Royal Beach Club in Mexico, you see the power of the earnings and the returns that are going to come forward here in the business. So I think when we look at like what's next. It's now setting ourselves on how do we make sure we execute on those significant margin drivers. And if you think about, just in 2024, a 1% change in our yields is $120 million. 1% change in our cost is about half of that. So if you're continuing to grow your yields faster than you're growing your costs or significantly faster than you're growing costs, that's going to deliver a lot of margin and return. The other point that I would add is that, when we -- like what are chasing like we're -- again, we're not chasing our cruise competitors. What we're chasing is how do we grab more and more share from that $1.9 trillion and growing vacation market. And I think with things like Icon and Utopia and Nova and Xcel, et cetera, and the private destinations, what we're doing is trying to further differentiate ourselves and real in more of those land-based consumers and to make sure that we are a clear consideration and a vacation choice. And if we do that really well, that's where we can further close the gap to land-based vacation and that will -- because there's so much operating leverage in this business, that's going to drive significant earnings power and returns to our shareholders.

And Matt, I guess the one -- on your question on the margin. So we're very happy with way we've obviously executed in the last 2 years, and you can see our margins much higher than 2019. And this was because we were focused on our formula and kind of continuing to have profitable growth. That doesn't change going forward. So as we think about new ships, new experiences, new initiatives, we want to continue to grow the revenue. That's obviously a great opportunity, as Jason said, $65 billion category, $1.9 trillion market. We see this as an amazing opportunity to win share from the consumer and continue to grow the business and expand it. And while doing that with higher margins. And I'll go back to what Jason said, 1% is -- of net revenue yield is $120 million, 1% of NCCX $16 million, so you can see that if we continue on this formula and continue to grow the business, there's much more runway on the margin itself, that also creates a lot of free cash flow, right? We're a much bigger company today. So that will just expand our opportunities for capital allocation as well.

Great. Best of luck.

Our next question comes from the line of Conor Cunningham with Melius Research. Please go ahead.

Hi everyone. Thank you. And maybe just to stick on that return answer that you had. Obviously, it's great to see that the dividend is back. But as you think about additional -- as the Board thinks about additional avenues of shareholder returns, just curious like how you think about that and how that steps up from here? Is it just a function of time? Or are you targeting additional balance sheet optimization before you start to think about maybe share repurchases and so on? Thank you.

Yes. Sure. Well, thanks, Conor. And of course, these things are always Board decisions. I think the dividend really reflects that now we have gotten ourselves into our balance sheet zone, our credit metric zone, that we have been focused on doing. And I think that historically, we've used both the dividend and other forms like share repurchasing to return capital shareholders. And I would suspect that we would kind of be focused on both of those things and growing both of those things over time. So I think the dividend and the amount of the dividend, I think, is a reflection of, again, keeping ourselves in that to 3.25 times to 3.5 times debt-to-EBITDA zone. We've reached that on the 3.5 times side, but our ultimate goal is to make sure we have a competitive dividend and opportunistically buy back shares over time.

And I'll just add that our balance sheet is obviously in the zone where we -- this is within the target. There's always opportunities, right? So we, obviously, first and foremost, manage maturities. We want to reduce -- continue to reduce the cost of capital. We still are not done with unsecuring our balance sheet. So we have some work to do, but we're definitely in a very strong balance sheet position that allows us to reinstate the dividend and just continue to grow the business.

Okay. That's helpful. And then sorry to ask about the 2025 booking comment again. But how does your yield management strategy change next year relative to this year? It just seems like there's additional opportunity to optimize it, you didn't necessarily have -- or maybe to ask it a little differently. Did you feel like you left anything on the table given your booking curve this year wasn't what you expect for it to be next year as you approach that? Thank you.

Yes, sure. So I think that you could see that obviously in the guide we had in the beginning of the year to where we are today, right? We're about 400 plus basis points higher than we were in our expectations in the beginning of the year. So that's a reflection of an acceleration demand and really acceleration in price. So your takeaway from that is, clearly, we left some money on the table and we were too booked going into WAVE. Now how we decide to take on those revenues is we have a very sophisticated revenue management system, a very sophisticated management team, that is looking at historical trends, what's happening in the market, to inform price and how much we take on and when. And so I think for us, it's always a debate on -- and again, this is always probably plus or minus 5 percentage points in terms of where our book position should be as we lost different periods. And of course, our ultimate goal here is not tell you that we're in record this or record that. Our ultimate goal here is to optimize our revenue. And that's what our tools do each and every day, and it could very well be that we cross the year in the same type of book position or a little bit less, or a little bit more and that's just to make sure that we are, again, maximizing and optimizing our revenue.

Appreciate it. Thank you.

Sure.

Our next question comes from the line of Robin Farley with UBS. Please go ahead.

Great. Thank you. So Utopia looks like a great new ship. But so don't mind that I'd like to ask about your next potential ship order. It's kind of a 2-part question. First is some other cruise have been ordering sort of further out than we had seen before the pandemic, some eight or nine years, some 12 years. Are you sort of having to think longer term about your order book than maybe you would have previously? Is that something you feel that you'll also to do or that we may see you do? And then secondly, it seems like there's kind of unofficially talk about a new ship class for me that would be smaller than the last two ship classes that you've had and that may allow you to go to some markets that can't handle some of the sort of newer larger ships today. And I wonder if you can help quantify for us what percent of the driving market now, right? Because there are clearly markets like Miami, New York, where you have a big driver market, but these other potential new port cities that you're not going to with some of your new hardware that would be new drive, kind of new source markets with better within drive. Can you quantify kind of what percent increase that could be in your drive market penetration? If thinking about what those smaller ships may reach, I realize this is a longer-term question, but. Thanks.

Hey, Robin. Thanks for the question. So first, we feel we have a very good line of sight on our order book. And it's all subscribed to being disciplined in the growth of our business. And of course, as we're adding capacity into our fleet, just always remind that as you're seeing with Utopia and Icon, where you're seeing with Silver Ray, et cetera, they're going into different segments and different markets and different deployments each and every day. So of course, in the cruise ship business or in the cruise business, you're always thinking longer term, you're not just thinking longer term in terms of growth and orders, but also your environmental footprint and what we can be doing to further reduce our emissions and the fuel that we burn, et cetera. So this is a longer-term business and designs of ships like Icon, which you heard us talk about with seven years in the making. So this just doesn't happen a couple of years out. So I think we feel very confident about our path of growth and we feel very confident in our ability to take on those orders in a very disciplined way. We're always going through and look -- we're always designing the next classes of ships really for all of our brands. We specifically pick segments and brands in those segments and deployments and experiences that we believe have a very long runway to generate demand globally as each of our brands are globally sourced business. And of course, the other thing I think that's important when you think about ship classes, whether they could be small, they could be larger, is kind of also a consideration that we also have ships that are reaching 30, 35 years. And so some of this is not just about we want to build same size ships, ships, smaller it's also replacing ships that will eventually kind of reach their end of life. And I think when your question comes about the drivable market, the ships that you're referring to that we're looking potentially at smaller ships will probably replace some of those older ships. It's a little bit less about the sourcing market. It's more about where those ships can go. It's getting them into maybe some of the more unique and bespoke destinations further diversify our footprint around the world. We go to about 1,000 different destinations today and we keep more and more and trying to spread out where our guests go size of the ship can sometimes matter. And I think our brands are always designing to how do we have the most flexible platform to deliver the experiences in which our guests are looking to go on.

Great. Thanks very much.

Great. One more question please.

Our final question will come from the line of Ben Chaiken with Mizuho. Please go ahead.

Hi good morning. With Paradox Island, how are you positioning this this relative to CocoCay? And is a different customer or similar? Meaning are your future Paradise Island guests going to CocoCay today? Or is it a different itinerary? And then a quick follow-up. Thanks.

Hi Ben, it's Michael. Yes, it's positioned as another incredible experience. It's a Beach Club experience. It's exactly what our customers are looking for when they go to the Caribbean. They are seeking an experience on the beach. So, it's a Royal Caribbean Beach Club. It will fit very well into Perfect Day, particularly for the short product market. You can spend a day in Perfect Day. And then the next day, you can spend a day in the Beach Club. So, it's kind of like totally perfect. And we think we're going to see very strong demand for the product. We've deployed. We've got our itinerary set for the Beach Clubs as they come online. And it will be a combination of short product, including Perfect Day, longer product that may call into the Beach Club as it goes into Nashville and often -- more often than not including Perfect Day as well. So, it's really a very complementary product that fits extremely well with Perfect Day, and it also fits very well into short and long product. So, we think it's going to be really a huge success. And the demographics are exactly the same as the Perfect Day and the same for the brand.

Very helpful. And then as you think about pricing versus ancillary spend, how do you imagine Paradise will be different than CocoCay or similar?

In terms of spend, we think it's going to be very similar. There are some differences because the Beach Club is a full purchase experience, whereas Perfect Day, there's huge amount of the experience is complementary and then there's many elements of the experience that you purchase. Because we -- when you go to Perfect Day, the entire ship goes there and it's the entire day for the guest. Whereas when you have the Beach Club experience, it's an experience that's available to the guest, but the guest can choose other experiences as well. So, there's literally a ticket price to enter into the Beach Club.

Got it. Thank you.

Okay.

I'll turn the conference back to Naftali for his closing remarks.

Thank you. We thank everyone for your participation and interest. Michael will be available for any follow-up. We wish you all a great day.

Ladies and gentlemen. This concludes today's conference. Thank you all for your participation. You may now disconnect.