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Mark Kempa

Thank you, Harry, and good morning, everyone. My commentary today will focus on our fourth quarter 2024 financial results, 2025 guidance and our financial position.
Unless otherwise noted, 2024 and 2025 net yield and adjusted net cruise cost ex field per capacity day metrics are in a constant currency basis, and comparisons are to the same period in 2024. Let me begin with our fourth quarter results on slide 10.
Once again, our fourth quarter results came in ahead of guidance, with net yield growing 9%. The 210 basis point outperformance was driven by strength across brands and geographies, as well as strong onboard spend.
Adjusted net cruise cost ex fuel, was slightly above guidance, ending the quarter at $157 mainly driven by increased variable compensation due to our strong performance. Excluding this and the $6 dry dock impact, adjusted net cruise cost ex fuel would have decreased year over year, demonstrating the benefits of our transformation initiatives.
The combination of healthy top line and strong cost control drove adjusted EBITDA of $468 million exceeding our guidance. Finally, adjusted net income for the quarter was $125 million dollars or adjusted EPS of $0.26, which included an approximately $70 million or $0.15 benefit due to foreign exchange rates.
A reminder that as foreign exchange rates move, we revalue both our debt and advanced ticket sales that are denominated in foreign currencies. While this appears as a benefit in the fourth quarter net income, the impact is a headwind in future periods when these advanced ticket sales are realized ultimately through the P&L.
Now moving to our record full year 2024 results on slide 11. Let me start with our top line performance. We delivered exceptional results this year, with net yield increasing 10% compared to prior year. This represents the highest net yield growth in our company's history.
At the same time, our disciplined cost management delivered strong results, further solidifying the commitments that we made at the beginning of last year. Our adjusted net crews cost one fuel per capacity day only increased $1 to $160 in 2024 when excluding the dry dock impact during the year.
This result was achieved despite higher variable compensation due to our strong performance. Excluding this, our adjusted net cruise cost ex fuel would have decreased year to year.
I am extremely proud of the significant progress we have made to streamline our cost base during the year, demonstrating our focus and commitment to our margin enhancement initiatives while still delivering an exceptional guest experience, and we expect this to continue in 2025 and beyond.
As a result of the strong net yield growth and cost savings initiatives during the year, our adjusted EBITDA came in at just over $2.45 billion while adjusted EPS came in at $1.82 which includes an approximate $0.10 benefit from FX, and our operating cash flow came in at just over $2 billion driving our leverage down 2 full turns to 5.3 times.
Our exceptional 2024 performance demonstrates our successful operational execution while capitalizing on strong demand in the market, which positions us well along our path to achieve our charting the course 2026 financial targets. As we look ahead to 2025, we are committed to maintaining this momentum with continued focus and drive.
Moving to slide 12, let me walk you through our 2025 outlook, starting with the first quarter. In the quarter, we are projecting pricing growth of 3.6% and net yield growth of 0.5%. The underlying drivers of this growth ratear occupancy is expected to be down 3% year over year, coming in at just over 101%.
As we discussed in our prior earnings call, we have two large ships, Norwegian Breakaway and Norwegian Bliss, that are repositioning from the Caribbean to Europe for dry docks during the quarter. As a result, we have a 71% increase in repositioning capacity days during the quarter.
These sailings naturally have a lower load factor than sailings in those vessels typical deployment in the Caribbean. To address these challenges in the future, we have established agreements with shipyards in the Caribbean that will allow us to perform dry docks closer to our core operating regions, reducing the need for lengthy repositioning sailings going forward.
Turning to pricing, we face a challenging year over year comparison. In the first quarter of '24, we delivered exceptional net per diem growth of 13%, driving a 16% net yield growth. Despite this challenging comparison, we expect pricing to increase 3.6% in the first quarter of 2025.
This growth is particularly notable, given that, along with lower load factors, repositioning sailings typically generate lower prices as compared to typical itineraries. And finally, looking to the last three quarters of 2025, where deployments are more normalized, we expect our net yield to grow at a healthy 3.5%, driven by strong 4.6% pricing growth on the back of 7% capacity growth.
Turning to adjusted net cruises cost ex fuel, we expect Q1 growth of 3.9%, which includes an $8 impact of increased dry dock capacity days and related costs in the quarter. Excluding this, adjusted net cruise cost ex fuel, is expected to be up 2.1%, which is below inflation and higher than our cost growth for the remainder of the year due to costs associated with the delivery of Norwegian Aqua.
Our unit cost growth will normalize going forward as we anticipate no meaningful dry dock impacts on our full year adjusted net cruise cost comparisons. We expect adjusted EBITDA to come in at $435 million and adjusted EPS at $0.08. Looking now at the full year, net yield growth is expected to be approximately 3%.
This growth is mainly driven by strong performance from our largest brand with more modest growth rates at our other brands that are absorbing outsized capacity growth. The recent appointment of our Chief Luxury Officer positions us well to enhance yields and margins across these brands going forward.
Driving more into the cadence of net yield throughout the year, we expect a temporary moderation and growth in the first quarter due to factors that I previously mentioned.
The subsequent three quarters, which better reflect our core business operations, are projected to grow at approximately 3.5%, primarily driven by strong net per diem growth of approximately 4.6%, which is in line with our long-term algorithm.
Turning to unit cost, building on our strong cost control performance in 2024, we intend to continue this momentum into 2025 and are targeting our adjusted net cruise cost ex fuel to grow by 1.25%, well below anticipated inflation rates.
This low unit cost growth comes after a year of only 1% cost growth and is a testament to our culture change and disciplined execution. This success is driven by the transformation office's ongoing strategic initiatives, which continue to identify and implement sustainable efficiencies across our organization, but that do not impact the guest experience.
These efforts are not just short-term fixes. They represent structural changes that will generate value for years to come. Now I want to give you some detail on the timing of cost throughout the year. As I previously mentioned, the first quarter is the only period where we face year by year comparison impacts from dry docks and a related decline in capacity days, as well as the delivery of Aqua.
For the remainder of 2025, we expect to have essentially flat unit costs reflecting our continued focus on efficiency and strong cost discipline. The spread between our net yield and unit costs for the last three quarters of the year will reach approximately 300 basis points.
These quarters better represent our core business, and this performance significantly exceeds our long-term algorithm while demonstrating our commitment to our Charting the Cource targets. As a result of the cost savings initiatives and strong net yield growth, we are expecting full year adjusted EBITDA of $2.72 billion which is net of an approximately $70 million headwind from both FX and fuel.
Adjusted EPS for the year is expected to be $2.05 setting us up well to achieve our 2026 charting the course targets. Similar to adjusted EBITDA, adjusted EPS also includes an approximately $70 million or $0.15 headwind from both FX and fuel.
Moving on to our margins on slide 13, the combination of a more efficient cost structure and strong top-line growth drove significant margin enhancements in 2024, with adjusted operational even of margins improving almost 500 basis points to 35.5%.
For 2025, we expect our margins will continue to strengthen, reaching approximately 37%. These improvements position us well to achieve our 2026 charting the course margin target of approximately 39%. On slide 14, I discussed our balance sheet and debt maturity profile.
In 2024, we made important strides in liability management and strengthening the balance sheet. We began in March refinancing our backstop commitment from secured to unsecured and repaid $250 million of 9.75% senior secure notes to 2028, our highest rate debt at the time.
We continued in September with the refinancing of $315 million of notes due December 2024 with 6.25% unsecured notes due 2030, with the remaining balance of the $250 million paid at maturity. More recently, in January of this year, we successfully issued $1.8 billion of 6.75% quarter unsecured notes through 2032, which were used to replace $600 million of secured debt with unsecured debt and $1.2 billion to refinance a portion of our [5 and 7/8] notes due 2026.
We also upsized our revolving credit facility to $1.7 billion and extended its tenure with improved terms. Through these strategic transactions, we have optimized our collateral utilization, further strengthening our capital structure while supporting our growth trajectory.
The rating agencies are also taking notice of our progress, with both S&P's and Moody's recently upgrading our credit ratings with a positive outlook. Moving to leverage on slide 15, the company has been delivering on its track record of net leverage reduction. During 2024, we reduced our net leverage to full terms, ending the year at 5.3 times.
We are confident we can continue making meaningful progress on this front going forward, driven by our organic cash generation and scheduled amortization payments. Looking to 2025, we expect to bring down net leverage to approximately 5 times or better.
This comes after net leverage temporarily increases to 5.7 times in the first quarter due to the delivery of Aqua in March. Ending the year at approximately 5 times or better demonstrates the company remains on track to achieve our 2026 target of the mid-4s, and I am confident that our continued focus on deleveraging will further strengthen our balance sheet and create value for our shareholders in the many years to come.
With that, I'll turn it back to Harry for closing remarks.

Harry Sommer

Thank you, Mark. Looking at slide 16, I want to take a moment to once again recognize the significant progress that we made during 2024 on our key charting the course financial targets. Adjusted operational EBITDA margin improved approximately 500 basis points.
Adjusted EPS grew by 161% to $1.82. Net leverage declined two full terms, and our adjusted ROIC ended up 320 basis points at just about 11%. These exceptional results were made possible through the dedication of over 40,000 employees who worked tirelessly to provide our guests with memorable vacations at great value.
It is truly an honor to work side by side with this outstanding team and witness what we can accomplish together. At our investor day back in May, we set our 2026 targets based on a straightforward executable plan backed by an experienced management team, outstanding staff, a clear [strategy and] a performance driven culture designed to drive meaningful results and shareholder value and an extraordinary guest experience.
Given our strong progress towards these targets in 2024 and our expected continued momentum in 2025, I am more confident than ever that our strategy is working and our execution is delivering results. I look forward to what 2025 will bring as we continue charting our course towards our bright future.
With that, we will now move on to the question and answer portion of the call, and I will hand the line back to our operator.

Question and Answer Session

Operator

(Operator Instructions)
Lizzie Dove, Goldman Sachs.

Lizzie Dove

Hi there, thanks for taking the question. My first question is on bookings color. You did give some color, which I appreciated, but wondering if you could go a bit deeper and just talk about the different brands you made a comment about the biggest brand performing the best and some of the luxury brands may be lagging a little bit with the capacity growth.
Curious just if you can expand on that. And then anything about different geographies and cadence of 2Q through 4Q.

Harry Sommer

Oh, good morning, Lizzie, and thank you for the question. Listen, I think we're reasonably happy with our booking pace that we've been seeing both in Q4 and for the first two months of the year. I think we referenced in our prepared remarks that we're particularly happy with Europe and Alaska, which has really have outperformed for us for the summer period for this year.
I think by brand, again, in our prepared remarks, we referenced the fact that that our luxury brands are just a little slower than we would have liked and in exchange the NCL brand is performing a little bit better, but nothing major. It's not a huge shift from one to another. I think bookings are where we need them to be, and I'll say steady as she goes.

Lizzie Dove

Perfect. That's helpful. And then obviously, the 2024 results ended up being so much better than you thought initially and a much bigger delta between yield growth and cost growth than you kind of started out thinking.
I'm curious like how much of that is a pull forward versus just actual kind of overachievement of those cost savings? Or putting it a different way, you've talked about the $300 million in the past, between back then and 2026, like is there kind of more upside to that? Or how should we kind of be thinking about that?

Harry Sommer

So I'll give some broad color, and then I'll turn it over to Mark for some more specifics on this question. Yes, the cost savings, well, you have so many questions, I guess, yes, (inaudible) good answer. Let me be a little bit more specific. The cost savings have come in a little bit quicker than we initially expected, which is obviously a good thing. We want to start out with a reasonable and measured plan.
And as the year progresses, I give kudos to the entire management and staff for taking this cultural change seriously as I knew they would and overachieving our initial expectations. Mark, I'll let you comment on the pull forward and what that means for '[28] and --

Mark Kempa

Lizzie, thanks for the question. Look, we've been pretty consistent. We targeted a $300 million efficiency program over three years. We did accelerate or overachieve on some of that in year one. That said, we continue to harvest and we continue to see opportunities in both '25 and '26.
And I think that's really demonstrated in the fact that when you look at our net cruise cost guidance ex fuel, we're guiding 1.25 points. So to put that in context, if you think about where inflation is generally around 3% to 4%, we are actually guiding a couple of points below that.
So we feel good about where we are. As I say every quarter, we gain more and more confidence around that. And everything we're doing is really streamlining and gaining more efficiencies, all on the premise without impacting the guest experience.

Harry Sommer

I can't emphasize that point enough. I don't usually like to have two comments on one question. I think the point that Mark made about guest experience is the extraordinary importance. I referenced in my prepared remarks that we have record guest satisfaction scores at each of our three brands.
And that's something that we diligently follow on a weekly voyage by voyage basis to make sure we stay on top of this. This starts with guests. It doesn't start with financials. This starts with guests. And if we can get the product right and happy guests, the financials follow, which is our 2024 results are testament to.

Lizzie Dove

Awesome thank you.

Operator

Brandt Montour, Barclays.

Brandt Montour

Good morning everybody. Thanks for taking my question. You guys gave some helpful commentary on pricing the first quarter versus the rest of the year at [3.6] and [4.6] respectively, which are healthy rates. But I'm curious why you guys are penciling an occupancy loss ex the first quarter looks like 1 point in your guide, [105] versus [104] for 2Q through 4Q for 2025. Just curious if there's a mix issue or if that's an opportunity for you guys?

Harry Sommer

I would say, in Q1, we spoke to the issues with dry dock and repositioning cruises. So I hope that's self-explanatory what happened with the occupancy rates in that. Obviously, on the repositioning cruises to and from the dry dock, transatlantic cruises in January and February tend not to fill with lots of children, as you may imagine, which impacts those rates and the surrounding cruises as well.
But for the rest of the quarter, there is a bit of a mix issue, although on a long-term basis, as we discussed, we're transitioning more to have Caribbean basis, for example, in GSE, we talked about shifting from, I think it was 400,000 guests to 1 million guests from prior year to '26.
And '25, there's actually a slight shift the other way where our Asia, Africa and Pacific itineraries, I think we include this as one of slides in our presentation is actually up 20% from 9% to 11% of our total deployment.
And we've also employed a larger ship on our longer Alaska runs, the Norwegian Joy is now doing our 9, 10 night Alaska runs, which also has a bit less of a family mix because they're longer in length. So I think those two changes in mix account for the entirety of the small change in occupancy that you see.

Brandt Montour

That's super helpful. And then just a follow-up, Harry, it was good to hear that you guys are seeing strong demand, particularly from US into Europe. Maybe you could just double-click on that. I mean obviously, is some of that easier comps?
Obviously last year, you had there were some geopolitical events in late '23 that effected '24. But also just pre post-election, if you're seeing, if you saw any sort of change in booking behaviour? And then the third part of this multiparter, any sort of more recent hesitation or concerns around the geopolitical media cycle filtering into bookings?

Harry Sommer

So yes, three part follow-up question there. Let me cover them all. Yes, I wouldn't say that we had particularly soft comps for last year. I think last year, where we ended up with a 10% yield growth reflected good performance across all geographies.
I don't think you can get to a 10% yield growth if there's really softness in any itinerary. So the fact that Europe is doing well for this year, I think, is just a reflection of a great customer product, good marketing, good acceptance for the experiences that we offer, which we're absolutely happy to see.
In terms of behavior pre and post-election, the week of election was a challenging week as it is every four years, but that's one out of 200 weeks, so we don't necessarily worry about that. But I think since then, we've seen normal patterns. Nothing really extraordinary positive or negative since the election has occurred. I have answered the questions, sorry, move on.

Brandt Montour

Perfect thanks.

Harry Sommer

Yes, I've answered the question sorry, move on.

Operator

Steve Wieczynski, Stifel.

Steven Wieczynski

Hey guys, good morning. Congratulations on a strong fourth quarter. So Harry or Mark, as we think about the guidance for the year, if we think about the 3.5% yield growth that you're kind of expecting there in the second quarter through the fourth quarter. That's probably actually a little stronger than we were kind of looking for.
And look, you gave a lot of commentary around demand for Alaska, Europe, so that's probably part of that. But just maybe help us understand maybe how you're thinking about the onboard side of things as we think about kind of the middle to the latter part of the year.
It just seems like I guess what I'm trying to get here is, is there a potential upside to that 3.5% number based on maybe a little bit higher load factors plus on board?

Harry Sommer

The guidance we provided are numbers that we feel confident with that we can deliver. I wouldn't necessarily imply that there's upside that we haven't yet factored in. it's the number that we believe in. We think a 3.5% yield growth on a 0.5% cost growth in the back three quarters of the year represents a very strong performance, especially coming off of the extraordinary performance last year.
I'm not here to give new guidance 10 minutes after we just gave original guidance. In terms of onboard spend, our philosophy here is to have a databased department which takes a look at what guests want and provide guests more of what they want and we provide guests more of what they want.
They gladly pay us for it. So it's not, I just want to be clear and this sort of goes with the first comment I made, this is not a finance driven organization. This is a customer-driven organization. And to the extent that we can deliver extraordinary products, whether it's on the crew side or in the case of your question, the onboard side, we can generate higher revenues.
We have an entire team that all they do day in and day out is take a look at the 13 different verticals we have of onboard revenue and make sure that we're delivering them to our guests in an exceptional way and then obviously, pricing it in a way that reflects the value.

Steven Wieczynski

Okay. And then second question, maybe a bigger picture question around your capacity growth. And Harry, obviously, you have a decent amount of capacity coming online over the next, let's call it, 5 to 10 years being very evenly spread out.
But maybe wondering how you're thinking about the retirement side of things given. If I kind of look at your fleet, you've got a handful of ships that are now in, let's call it, that 25 to 30 years age range. So is that something you guys are starting to contemplate?

Harry Sommer

Yes. Obviously, we always look at what the market is out there. But I'll just point out that our oldest ships in our fleet are from '98 and '99. So none of them have reached yet 30 years. And we believe our ships can even perhaps get to 35 years or beyond.
So there still is a little bit of room there, if you will, before we have to be more aggressively considering ship retirements. We have also been very aggressive. One of the blessings of coming on after the previous CEO, which was a huge believer in investing in our product is our ships are extraordinarily well maintained.
I to visit them on a regular basis, and I'm very pleased with even the older ships in our fleet, how well they have stood up. So I don't think that there's anything imminent coming. But of course, we always keep our eye open. I think Mark wants to add to my comments.

Mark Kempa

Yes. And I think, Steve, around that question is, I think when you look at our prepared remarks and some of the activities that just occurred in January, around our revolver and related collateral, structurally, that puts us in a position where we can actually be in a position down the road should we desire to start disposing of vessels.
Again, not indicating we're on that path. But it now allows us to explore that and set some of our strategy around that. So I think we have much more flexibility now than we had before, but it sets us well up into the future for the best outcome.

Steven Wieczynski

Okay. Yes. And Mark, that's what I was trying to figure out. Thanks for the color guys appreciate it.

Harry Sommer

Of course, thank you.

Operator

Daniel Politzer, Wells Fargo.

Daniel Politzer

Hey, good morning, everyone. Thanks for taking my questions. I wanted to just follow up on Europe and maybe ask the question in a bit of a different way. How would you classify demand there versus Caribbean given seemingly different supply demand dynamics in those markets. I mean, can you maybe talk about the impact of the strong FX and strong dollar and if that's also providing some ongoing tailwind as it relates to demand?

Harry Sommer

We've been seeing the strong demand in Europe for the entire booking season, even going back to last summer when summer '25 would have started booking. So I don't think it's particularly related to the strong US dollar. I think, it just is reflective of, as I mentioned in one of the previous questions, the great product offering that we have and the good marketing messaging that we get out to our guests.
So I haven't really seen that much change as the US dollar has strengthened since the election. Versus Caribbean. Listen, obviously, we've called out Europe and Alaska, so we're really, really happy. But I'll just point out that at least during the summer, Caribbean is a very small part of our deployment.
It gets down to about 9% in Q3. So the fact that we didn't necessarily point out Caribbean doesn't necessarily reflect a weakness. It just, I point to Alaska and Europe because on a combined basis, they're well over half of our deployment in the summer, and that's what we're focused on and particularly happy with.

Mark Kempa

And Dan, as you think about that with the comments around the dollar, most of the vast majority of our guests are spending in US dollars, they're purchasing their cruise ticket in US dollars and their excursions.
So yes, while there could be some minor benefit around a stronger dollar, I don't think it's a huge driver one way or the other. Other than the fact, I would be remiss if I didn't remind the group today that we do see an impact from that in our overall earnings per share as a result of the stronger dollar. But that said, I think we're feeling good with those markets.

Daniel Politzer

Got it. That that makes sense. And then, look, there's obviously been some headlines lately, from the current administration on taxation of the cruise industry.
I don't know to what extent you could comment, but if there's anything you could kind of opine on whether it relates to your exposure level of operating income that you, could be risked and maybe talk us through some of the puts and takes or even a history lesson on this area of the tax code.

Harry Sommer

I'll stay the history lesson, but I'm happy to think about the current environment. It's funny we had an over under how many questions into the earnings call with this tax thing come up for the first cruise line that has reported since the Commerce Secretary comments a little while back. Listen, this thing with [AA3] is really, really complicated and would obviously require legislative action to change.
Now considering how many moving pieces they are and the complexity of our business, and the complexity or the variety, if you will, of our deployment and the relatively short amount of time our ships are in US waters, it's really hard for us to speculate on what this would mean to us.
So I won't. Perhaps over time, there'll be more clarity on what's going on, and we'll see then. But I will say that I'd be remiss if I didn't point out to some of the positive things that are coming out of the administration. I think this push for sustained piece in the Middle East and potentially between the Ukraine and Russia can be a significant tailwind for us in 2026.
And I'll take Russia as an example. In our Summer '26 deployment, we have one-third of our fleet, 11 ships that are going to be based in Northern Europe, and that's all without St. Petersburg being available. If St. Petersburg was to become available for the summer '26 season, I think as a company, with one-third of our fleet based in that region of the world, we could disproportionately benefit from positive things in that region.
So of course, as a human being, I hope for peace for purely humanitarian reasons. As a cruise operator, we think this can provide us a unique opportunity for the summer of '26 or if not for the summer of '26, for the summer of '27. We're here for the long term, and we are very pro the work that the administration is doing in trying to bring peace to those two regions.

Daniel Politzer

Thanks, really helpful perspective and hopefully you guys hit the unders on the on the number of questions. Thanks.

Operator

James Hardiman, Citi.

James Hardiman

Hey, good morning. A quick follow-up on, I think it was Brendt's question earlier on occupancy. A lot of the color that you've given us would seem to suggest that the yield headwind from occupancy this year, it sort of feels more onetime-ish.
So maybe as we think about the go forward occupancy rate, I mean, you did 105% roughly in 2024. That's going to be mid-103 range in '25. What's that look like? And you did 107 in 2019, I might add. But what does that look like in 2026 and beyond?

Harry Sommer

It's a little early for us to give guidance for 2026, but I think the general comment that we may have a mild tailwind on occupancy in 2026, I think, is a correct way to look at things. We'll have a little less Asia, Africa, Pacific deployment. We'll have a little more Caribbean deployment, a little more shorter Caribbean deployment.
As we talked about, our ramp-up, for example, of visitors to GSC. So I think it is fair to expect a mild tailwind coming into '26, but it would be premature for me to comment by exactly how much that would be.

James Hardiman

Got it. Totally fair. And then along the same lines, obviously, it's pretty early for 2026, but you guys do have these Charting the Course targets that are out there. And so if I just look at 2025, the guide is for about 13% earnings growth that reaccelerates in 2026 to get to that [245] that's about 20% earnings growth.
Obviously, capacity is accelerating a bit. Is there anything else worth calling out? Or what else would you call out? Let me ask the question that way. Obviously, you've got Great Stirrup Cay coming online, which should be a benefit. I didn't know if there's any sort of below-the-line opportunities.
Occupancy sounds like it's going to be a little bit better. So just sort of bridge the gap between where you're guiding '25 and where you've targeted '26.

Harry Sommer

I'll make a specific comment and then a general comment. I know you referenced the 13% improvement in EPS from '24 to '25. But I'll point out that if you adjust for the FX change that Mark talked about in his commentary, it's actually represented 29% of increase in EPS year over year on an FX-adjusted basis. And clearly, we don't expect, well, at least today, we don't expect the US dollar to continue to appreciate at the rate it is.
So that would be, make the '26 earnings growth, actually, a lower bar than the '25 earnings growth, not a higher bar. But I'll go back to our general, if you will, algorithm that we believe moderate capacity growth with low to mid-single digit yield growth and sub-inflationary cost growth all will lead to improving margins, strong cash flows, de-levering balance sheet and 100% allow us to achieve our Charting the Course targets in 2026.

James Hardiman

Got it, that's a good color. Thank you.

Operator

Vince Ciepiel, Cleveland Research.

Vince Ciepiel

Great, thanks. I want to come back to Great Stirrup. I don't know if I catch the number right, that maybe it would be 1 million passengers in '26. It sounds a little bit higher maybe than previous targets. And what percentage of capacity do you envision stopping there in '26? And any way to frame up the potential yield benefit you might see from Great Stirrup?

Harry Sommer

So 1 million passengers in '26, yes, you did hear that correctly. Yes, that is slightly higher than what we had previously talked about as we've now completely finalized our '26 deployment. So we're giving you the latest and most accurate numbers. I believe we're scheduled to have just over 3 million guests next year. Mark, can you help me on that one?

Mark Kempa

Yes, over 3 million guests.

Harry Sommer

So this would represent, say, 30% of all our guests would include a visit at Great Stirrup Cay. It'll be a little bit premature for me to comment again on '26 guidance. I won't comment on any yield benefit. But obviously, if we didn't think it was worth going there, we wouldn't.

Mark Kempa

And Vince, keep in mind, what we've announced so far is that we are completing the pier in the fourth quarter of this year. And most importantly, what that's going to allow us to do is deliver the product that we've actually sold to the customer.
So I think that number one will be an overall just brand tailwind. But again, we will have more throughput in there in FY26, but I agree with Harry, it's a bit too premature to talk about what the yield benefit could be simply from adding a pier.

Vince Ciepiel

Thanks. That's helpful. And then to the earlier comments on hoping for peace and what that could mean for numbers, I thought that was a helpful way to quantify St. Petersburg. Any thoughts on what Middle East or Red Sea kind of opening up could mean how quickly things could adjust. Is that more of a '27 opportunity at this point? Or could there be any lift to '26 if things got a lot better, faster there?

Harry Sommer

Yes. So I think you have it exactly right. I mean unlike north of Europe, where we have 11 ships positioned there already. So I'm not saying it would be easy, but it would be reasonable for us to adjust itineraries to take advantage of it opening in St. Petersburg if and when it was to happen.
And clearly, in '27, we will also have something like 11 ships or one-third of our fleet there. So even if we missed the opportunity in '26, there's a longer-term tailwind in '27. Middle East is a little bit more complicated because that's part of the deployment program where we positioned ships between the summer and winter.
So we would not change our deployment to take advantage of a Red Sea, Middle Eastern opening in the short term, I agree with you that likely would be more of a '27 item as you suggest.

Vince Ciepiel

Thank you.

Operator

Conor Cunningham, Melius Research.

Conor Cunningham

Everyone, thank you. Just going back to the book position commentary. I was under the impression that there may be some changes in inventory management. Can you just talk a little bit about that, what you're doing this year versus last year? It just seems like there's an opportunity to better utilize price? Just trying to understand it a little bit better. Thank you.

Mark Kempa

Yeah, good morning, Connor. Look, I think what we've said and what we've continued to say is every year, every quarter, we get better and better at improving our revenue management systems. And yes, while we continue to make what we believe are low cost technology improvements, that's part of our normal day to day business. So that's something we focus on week in, week out, quarter after quarter. It's a never-ending process.
As you well know, revenue management is an art as much as it is a science. But I don't think we've indicated that we're doing some sort of sweeping change. It's more of continuous refinement and improvement of our existing processes and technology.

Conor Cunningham

Okay. That's helpful. And then I was hoping you could just touch on the demographic changes. And you've highlighted a lot of marketing efforts with partnerships in the deck and whatnot.
So are you seeing an influx of new to cruise and new to brand? Just trying to understand how like the ROIs on the marketing campaigns as you change some stuff. Thank you.

Harry Sommer

Thank you for the question. I can't point to anything meaningful one way or another. We continue to have roughly the same mix of new to cruise, new (inaudible) guests. We're happy with the mix we have today.
I'll get the same commentary that Mark gave on revenue management systems that we have a team of data scientists that are constantly looking at our marketing efforts upper funnel, mid-funnel lower funnel to optimize to the best of our abilities across all three of our brands. We're happy with the direction it's going. But the continuous thing that we work on day in and day out.
Maria, I believe we have time for one last question.

Operator

Robin Farley, UBS.

Robin Farley

Great, thank you. I think on last quarter's call, you had given a little bit of color on your forward bookings, I think a little more detail. I think you had said that price and load factor in each quarter in 2025 was at the same or higher than last year.
Could you kind of give us a sense of that? Or is there a difference in any of those quarters kind of how that is compared to last quarter? Thanks.

Mark Kempa

Thanks for the question. Look, I think rather than focusing on is every quarter at higher load or higher pricing. I think the better question for us is, are we at our best optimal booked position whether it's on a 12 or 15 or 24 month basis.
And I think the resounding answer to that based on our commentary is, yes, we are in what we believe is our optimal book position. We are focused on delivering the best economics out of the customer. We are not necessarily focused on the minutia between each quarter.
Yes, obviously, we monitor that. But you want us to be in our best optimal position versus thinking about any sort of records or anything like that. So no change in thinking or no change in our forward outlook, simply really focusing on what we believe important and is that optimal range.

Robin Farley

Okay. Great. And then just a quick follow up on a totally different topic. I think I probably know what your answer will be, but just to get your official sort of thoughts about the [river] cruise business. Some others have been looking at that for the first time.
And I assume your focus and your balance sheet is mostly going to be really just focused on your core business and a lot of things you want to do in your existing business, but I get your official thoughts on that.

Harry Sommer

Robin, thank you for the question. I think that's exactly right. We have, I think, one of the most robust order books in the industry with 13 cruise ships on order, two being delivered this year, a book that extends out for the next decade. We are very passionate about what we do.
We're very passionate about what we do today because we do it well, and we can deliver outstanding financial performance by delivering a guest experience. And we are putting all our efforts behind continuing to do that.
If there are other brands that want to do something else, I leave that with them. But for our company, we are very happy with our current strategy and direction.

Robin Farley

Great, thank you very much.

Harry Sommer

So, once again, I want to thank everyone for joining us today. We'll be around all day today to answer any follow-up questions you may have. Thank you all very much and have a wonderful day.

Operator

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.