Chief Executive Officer at Royal Caribbean Cruises
Thank you, Michael, and good morning, everyone. Before getting into the details, I would like to take a moment to reflect on last week's monumental launch of our new ship Icon of the Seas. Every once in a while, a revolutionary product comes along that resonates so strongly and makes such a widespread impact that it forever changes the status quo.
For the vacation industry that product, Icon of the Seas, debuted last week two incredible fanfare. Our mission at the Royal Caribbean Group is to deliver the best vacation experiences responsibly and Icon is going to deliver the best family vacation on the planet with her incredible experiences and amazing crew.
I'm absolutely thrilled that after years of planning and anticipation, Icon finally welcomed our first revenue guests on-board this past weekend. With the phenomenal guest engagement and word-of-mouth from this ship, along with our landmark sports partnership with Inter Miami and football GOAT, Lionel Messi, we look-forward to making millions of vacation memories for our guests in the years ahead. A big thank you to our incredible team who worked relentlessly over seven years, dreaming, innovating and flawlessly delivering Icon of the Seas.
So now let's talk about 2023 and 2024. 2023 was an exceptional year, fueled by unmatched demand for our brands as you see on Slide 5. Net yields were up 13.5% compared to 2019, more than 3.5 times our January expectations and we delivered margins that were back to record 2019 levels. Our net income exceeded our January expectations by about $1 billion, resulting in adjusted earnings per share, more than double our January guidance.
We continued our focus on reshaping the cost structure across the operating platform, leading the durable margin expansion which is expected to continue to provide operating leverage as we grow the business. Innovation is core to our company's DNA. And in 2023, we continue to direct that innovative spirit, not only to our new ships and destinations, but also to an amazing guest experience at all points in the vacation journey.
We received exceptionally high guest satisfaction scores and attracted a record number of both new and loyal guests, who are rebooking at twice the rate what we're seeing in 2019. The robust performance in 2023 significantly accelerated our trajectory towards our Trifecta goals with EBITDA per APCD and ROIC on the cusp of our targets. We also continue to invest in the future, while making significant progress in strengthening the balance sheet towards our targets of investment-grade metrics.
The year ended on an incredible note with revenue yield of nearly 18% in the fourth-quarter and 2024 is in the strongest book position in the company's history from both a pricing and volume standpoint. I'm incredibly thankful and proud of everyone at the Royal Caribbean Group for executing so well and doing so while achieving strong financial results and propelling our future growth.
Momentum continues in 2024 with a record-breaking start to the wave season. Bookings have consistently outpaced last year across all key products at much higher rates. In fact, the five highest booking weeks in our company's history, all occurred since the last earnings call. As a result, our capacity is up 8.5% year-over-year, we have less inventory available to book in 2024 than we did a year ago for 2023 and half as many stay rooms left in Q1. Our commercial apparatus is full-speed ahead and all channels are delivering quality demand above 2023 levels.
Our direct-to-consumer channels continue to perform exceptionally well as consumer preferences for digital engagement and our ongoing investment in enhanced capabilities is supporting record-breaking bookings. Our travel partners are also delivering meaningfully more bookings in last year and beating our elevated expectations.
We continue to see particularly healthy demand from North America, where about 80% of our guests will be sourced this year. Our brand's global appeal and nimble sourcing model allows us to attract the highest yielding guests by positioning our ships in multiple markets across the world. Our brands lead in their respective segments and are very successful at capturing quality demand across sectors and sourcing from new consumer basis.
If you think about consumer demand for 2024 and beyond, we look to both macro trends and data points for millions of daily interactions with our customers. We continue to see a very positive sentiment from our customers, bolstered by strong labor markets, high wages, surplus savings and elevated wealth levels.
Year-over-year growth and spend on experiences is double that of spent on goods and cruising remains an exceptional value proposition with lower penetration, higher consumer consideration and high purchase intent. We see an exceptionally engaged consumer base across markets, brands and products. People are looking to book their dream vacations with us and continue to spend at elevated levels. Consumers are engaging and booking their vacations earlier, 70% book at least one of their onboard activities pre cruise at higher APDs and onboard spend continues at record levels and at higher rates.
This positions us very well to outperform the broader travel industry, and now with the pricing gap, to land based vacations. We continue to attract new customers into our vacation ecosystem and deliver the best vacation experiences, so that our guests are highly satisfied and continue to rebook and return to our brands and our products.
2024 is shaping up to be a record-breaking year with 40% earnings growth as our progress continues on an accelerated path towards achieving our Trifecta goals. As you can see in our release today, we expect to achieve several Trifecta targets in 2024, a full-year earlier than previously anticipated. As I've said in the past, Trifecta creates the pathway back to what we internally describe as base camp. And while an important milestone, it is not our final destination as our ambitions go well beyond it.
As highlighted on Slide 6, in 2024, we expect to grow capacity by 8.5% with the introduction of Utopia of the Seas and Silver Ray and the first full-year of service of the three incredible ships that joined our fleet during 2023, Icon of the Seas, Celebrity Ascent and Silver Nova. New ships not only elevate our vacation experiences and draw new customers to our brands, but they also provide yield tailwinds and enhance overall profitability.
In 2024, we expect yields to grow 5.25% to 7.25%, driven by the performance of our entire fleet, new and existing ships, combined with our leading private destinations and strong commercial apparatus.
Load factors and rate growth together with continued focus on margins and disciplined capital allocation are expected to drive record earnings that grow 40% year-over-year, getting us very close to our Trifecta targets. Our proven formula for success remains unchanged. Moderate capacity growth, moderate yield growth and strong cost controls lead to enhanced margins, profitability and superior financial performance.
Our operating platform is bigger and stronger than ever. We have the leading brands in their respective segments, the best people and the best and most innovative fleet and destinations. We remain intensely focused on delivering a lifetime of vacations for our guests and a long-term value for our shareholders.
We are leading the vacation industry and creating exciting new products and experiences, which in 2024 include game-changing ships and the expansion of our highly-rated destination Perfect Day at CocoCay.
Our new ships are performing exceptionally well. And while we always expect to see strong trends when we introduce new ships, Icon of the Seas is definitely living up to her name and that's taking things to a whole new level in every way. Demand and pricing for Icon has been incredibly strong. This year, we are also thrilled to take delivery of the sixth Oasis class ship, Utopia of the Seas, which will set the stage for the ultimate weekend getaway.
Lastly, we will take delivery of Silver Ray, the second ship in the evolution class, redefining ultra luxury cruising. Silver Ray will debut in the Mediterranean this summer before transitioning to winter season in South America. New ships and their incredible innovative experiences further accelerate our efforts to steal market-share from land-based vacations. We completed the expansion of Hideaway Beach and Perfect Day at CocoCay just in time to welcome Icon of the Seas, upsizing the benefit of the strategic asset. Hideaway Beach is our newest adult only ultimate beachfront paradise at Perfect Day at CocoCay, which expands our capacity on the island to over 3 million guests annually.
About two-thirds of Royal Caribbean International Caribbean guests will visit Perfect Day at CocoCay this year, allowing us to deliver high satisfaction scores and higher margins across the fleet.
Our journey to deepen the relationship with the customer continues this year. We will further enhance our commercial capabilities to optimize our distribution channels, build even more customer loyalty and lower our acquisition costs. The outsized increase in our onboard revenue over the past couple of years has been fueled by new capabilities introduced to make it easier for guests to prebook onboard experiences. We will continue to enhance those capabilities in 2024.
About a third of onboard purchases are now coming through the mobile app and we already have about 40% more pre-cruise revenue booked in 2024 as compared to 2023. As a reminder, customers who purchase onboard experiences before their cruise, spent about 2.5 times more than those who do not buy pre cruise.
We will remove friction by investing in a modern digital travel platform, making it easier than ever for guest to book their dream vacations while allowing us to expand wallet share. We will also continue driving business excellence to increase yield and capture efficiencies across our platform.
Our teams are committed to controlling costs and enhancing profitability while focusing on delivering the best guest experiences and doing so in a responsible way. Our sustainability ambitions help inform our strategic and financial decisions daily, ensuring that we always act responsibly while achieving our long-term profitability goals. We are making progress on our SEA the Future commitment to sustain the planet, energize communities and accelerate innovation.
We wrapped the year on track to achieve our carbon intensity reduction targets and we are entering 2024, well beyond the halfway mark. To make this possible, we continue to accelerate innovations with the first methanol capable tri fuel engine that we expect to debut on Celebrity Xcel in 2025. Every new ship represents an advancement in our energy transition efforts.
The game changing Icon of the Seas exceeds industry standards for energy efficiency by 24%. Icon and the recently launched Silver Nova also allow us to take advantage of new technologies such as innovative ways to energy systems on board. By consistently using our latest ships to pilot new technologies, we can validate the decisions we are making now to help position us to achieve our destination net zero target by 2050. To wrap up, the future of the Royal Caribbean Group is exceptionally bright.
With our strong operating platform and proven strategies, we are creating a lifetime of vacation experiences for our customers, also delivering long-term shareholder value that allows us to reach new financial records. We are well-positioned for continued growth in 2024 and beyond. And with that, I will turn it over to Naftali. Naft?