Can Exclusive Destinations Be RCL's Next Revenue Engine?
Royal Caribbean Cruises Ltd. RCL is doubling down on a strategy that extends its competitive moat well beyond the ship to exclusive land-based destinations. Management sees these proprietary experiences, from Perfect Day at CocoCay to the new Royal Beach Clubs, as a core driver of pricing power, higher onboard monetization and market share gains.
On the third-quarter 2025 earnings call, CEO Jason Liberty highlighted that the company will expand its exclusive destination portfolio from two to eight by 2028, including new developments like Royal Beach Club Santorini, Paradise Island and Perfect Day Mexico. This aggressive build-out is part of RCL’s “commercial flywheel,” a model designed to deepen loyalty, attract new cruisers and keep guests spending inside its ecosystem.
Early results support the strategy’s potential. Perfect Day at CocoCay has been a powerful engine of ticket price uplift and incremental onboard spend, while Beach Clubs are expected to skew toward shore-excursion-driven revenues, further supporting yield diversification.
Notably, these privately controlled experiences also give RCL better control over margins compared with third-party ports, a meaningful lever as it targets sustained margin expansion and high-teen ROIC in the coming years.
While near-term weather disruptions, such as the temporary closure of Labadee, can create noise, management emphasized that demand for Caribbean itineraries featuring exclusive stops remains robust.
RCL’s destination strategy is not just about new thrills; it is a capital-efficient revenue model that strengthens pricing, loyalty and competitive differentiation. Exclusive destinations look well-positioned to become the company’s next major revenue engine.
Competitive Landscape: How Rivals Approach Private Destinations
While Royal Caribbean is rapidly scaling its portfolio of exclusive destinations, two major cruise competitors are pursuing similar strategies, though with less scope and differentiation today.
Carnival Corporation CCL has invested in private ports such as Amber Cove in the Dominican Republic and Mahogany Bay in Honduras, which have supported onboard spending and itinerary appeal. However, Carnival’s development pace has been slower and its properties lack the broad, high-end experience ecosystem that RCL is building. Carnival has focused more on improving its core fleet and balance sheet rather than large-scale exclusive destination expansion, potentially giving RCL a strategic advantage in pricing power.
Norwegian Cruise Line Holdings NCLH operates Great Stirrup Cay and Harvest Caye, both successful private destinations that enhance onboard revenues and guest satisfaction. Yet Norwegian’s geographic footprint is narrower and it has not announced a comparable expansion roadmap. This creates room for RCL to widen the differentiation gap through scale, variety and loyalty monetization.
In the battle for pricing premium and loyalty retention, exclusive destinations may become the decisive competitive edge.
RCL’s Price Performance, Valuation & Estimates
Shares of Royal Caribbean have gained 6.5% in the past six months compared with the industry’s growth of 0.9%.
RCL Six-Month Price Performance
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From a valuation standpoint, RCL trades at a forward price-to-earnings ratio of 14.45X, below the industry’s average of 15.64X.
P/E (F12M)
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The Zacks Consensus Estimate for RCL’s 2025 and 2026 earnings implies a year-over-year uptick of 32.54% and 14.52%, respectively. EPS estimates for 2025 have remained unchanged in the past seven days.
Image Source: Zacks Investment Research
RCL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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