President and Chief Executive Officer at Royal Caribbean Cruises
Thank you, Michael, and good morning, everyone. Over the past several months, our teams have been very busy and focused on generating strong quality demand combating inflation and most of all, delivering the best vacations in the world as we return our business closer to historical load factors while maintaining price integrity and generating $3 billion in revenue and almost $750 million in adjusted EBITDA in the third quarter. As you have seen in our announcement this morning, we have announced a 3-year financial performance program that we have termed Project Trifecta. Now before getting into the details of the program, let's first talk about how the business is performing. As our third quarter results clearly demonstrate the strength of our vacation platform, which includes our leading global brands, the best and most innovative ships in the industry and a powerful and nimble commercial apparatus, coupled with strong execution by our operating teams have delivered another quarter of strong performance that exceeded our expectations. Our entire fleet is operating globally in our key destinations. Demand for our experiences was very strong, and we achieved 96% load factors overall, with the Caribbean at close to 105% at record pricing and high satisfaction scores.
We delivered adjusted EBITDA of $742 million and positive earnings per share of $0.26, which was above our guidance. Our strong financial performance, coupled with proactive refinancing actions, further strengthened our already strong liquidity position and improved our debt maturity profile. I am thankful and proud of everyone at the World Caribbean Group for delivering the best vacation experiences to our customers in a responsible way, while executing so well on our recovery and building on our future. The successful return of our business to full operations and the accelerating demand environment positions us well to deliver on our expectations of record yields and record adjusted EBITDA in 2023. Next, let me elaborate on the Trifecta Program we announced this morning. With the operational return of our business well in hand, we are now focusing the team and our stakeholders on returning to record financial performance and beyond. The introduction of the Trifecta program provides us the coordinates we are looking to achieve over the next few years while delivering the best vacations in the world responsibly.
Specifically, we are focused on achieving three metrics by 2025, growing EBITDA profitability per APCD to triple digits, delivering double-digit earnings and achieving a return on invested capital in the teams. We look to achieve these metrics while we return the balance sheet back to investment-grade profile and reduce our carbon intensity by double digits compared to 2019 as part of our commitment and focus on advancing the sustainability of our business. Our formula for success is based on moderate capacity growth, moderate yield growth and strong cost discipline. For those who have followed us for some time, this will sound very familiar as we demonstrated in the past, it leads to strong financial performance and does not assume a perfect operating environment. Our plan is well grounded in a set of underlying strategies, robust secular and demographic trends, a strong culture and a powerful foundation of leading global brands, the most innovative fleet in the industry and the very best people. The main thrust of our plan is to take further advantage of our strong foundation and further orient our ecosystem around the customer by enhancing our commercial apparatus and product offerings. By doing this, we will further enhance customer preference, engagement, cruise frequency, guest experience and spend.
This, combined with expanding our fleet through innovative new ships and land-based experiences like Perfect Day at CocoCay will drive our profitability growth and strong cash flow generation. Disciplined capital allocation to high returning investments will allow us to reduce leverage while investing in our future and delivering a strong shareholder value. Trifecta creates the pathway back to what we internally describe as base camp. However, base camp is not our final destination. Our ambitions go well beyond it. And while it may not always be a straight line and there may be some choppy waves from time to time, we are confident in our leading platform and ability to execute on our strategies to deliver those goals over the next few years. Before going into the booking commentary, I wanted to share some of the behaviors that we are seeing from our guests. Global demand for travel is ramping up as consumers continue to shift spend to experiences. Well, this is good news to us as we are squarely in the experience business. The value proposition of cruise remains incredibly attractive. I would say, too attractive. Our full addressable market is back, and our brands are attracting new customers into our vacation ecosystem. As a result, gas mix for the quarter was equally distributed across loyalty, new to cruise and new to our brand, similar to what we saw in 2019. Let me highlight some observations from our daily engagement with our customers.
This quarter, we delivered 1.7 million amazing vacation experiences, and we have more than 130,000 guests sailing on our ships globally every day. The positioning of our brands attracts guests across broad demographics, psychographics and at a median household income above $100,000. This provides us a unique vantage point on what our guests are looking for in their behaviors. Overall, across markets, brands and products, we continue to see a financially healthy, highly engaged consumer with a strong hunger to dream and seek a variety of vacation experiences. Our commercial apparatus is seeing elevated booking activity across channels as we help our customers design their dream vacations. Our guests are willing to spend more than ever with us to create those memories. Consumers are engaging earlier in the planning their vacation with about 60% purchasing onboard experiences before they even set sail. This has led to an 8-point increase in penetration and much higher revenue APD related to pre-cruise purchases versus 2019 levels. Our guests continue to seek the rich experiences we offer, spending significantly more on board our ships compared to 2019 across nearly all categories. All this is translating into strong booking activity. During the third quarter, we saw both strong demand for close-in sailings and accelerating demand for sailings in 2023.
Next, let me talk a little bit more about the new ships that are planned to join our fleet next year. Our innovative new ships and onboard experiences will allow us to continue to differentiate our offering as well as deliver superior yields and margins. Two weeks ago, we revealed details on our new and amazing Icon of the Seas, which will be delivered in late 2023 ahead of its January 2024 debut. It is a game-changing first of its kind vacation experience, where everyone can experience their version of the ultimate vacation. Icon will have eight distinct neighborhoods, each a destination in and of itself, packed with an array of amazing experiences. The ships state room configuration will allow for load factors to be accretive to the overall portfolio and the ship will be significantly accretive to our key financial metrics. The ship opened for sale about a week ago, and the market response was nothing short of remarkable. On the first day of bookings, we far surpassed our previous single-day booking record for the brand and the company overall, and it wasn't even close. With each new ship, we raise the bar in the travel industry while enhancing what our guests know and love. In addition to Icon, Celebrity set will join the Celebrity Fleet in the fourth quarter of 2023, and Silver Nova will join the Silversea fleet in late summer.
In the coming days, we will open a brand-new flagship terminal in Galveston, Texas. The new terminal significantly expands our capacity in the region with the ability to accommodate the larger Oasis class ships and give us further access into the attractive drive two markets of Texas, Oklahoma and the entire Southeast region. The facility will also be the first cruise terminal to generate a 100% of its needed energy from on-site solar panels and will be the first Zero Energy cruise terminal facility in the world. While we are still early in our planning cycle, 2023 is shaping up to be a strong year for the company and a return to normal typical business. Our overall capacity will grow 14% compared to 2019 on account of 10 new ships, which have joined or will join the fleet across our brands during this period, net of dispositions. Our deployment across markets is relatively unchanged compared to 2019, with Caribbean representing just over half of our overall deployment. Europe at almost 20% and in Asia in the low single digits with no planned deployment in the high-yielding China market.
About 80% of the population is within driving distance to a U.S. home port and we have upsized the short Caribbean product by 35% compared to 2019. Almost 65% of guests sailing on Royal Internationals Caribbean itineraries will experience Perfect day At CocoCay in 2023, up from 30% in 2019. We expect almost 80% of 2023 guest sourcing to come from North America as we continue to see particularly strong demand from that customer. Our global brands appeal and nimble sourcing model allow us to attract the highest yielding guests and partially mitigate the impact from the strong dollar. While 2022 bookings remain strong and on pace to achieve occupancy's targets, the most notable change over the past few months has been a substantial acceleration in demand for 2023 sales. We received twice as many bookings for 2023 sailings in Q3 as we did in Q2, resulting in considerably higher booking volumes than during the same period for 2019 sailings. As a result, all four quarters of 2023 are booked well within historical ranges at record prices with bookings accelerating every week. While the last three years were certainly challenging, the resiliency of our business allowed us to recover quickly and be fully back up and running. Our operating platform is larger and stronger than it has ever been with the best brands, best ships and best people.
Our commercial capabilities allow us to reach more quality demand and our itineraries are strategically planned to appeal to both new-to-cruise and loyal customers. The value proposition of cruising remains incredibly attractive, and we have an opportunity to close the gap to other land vacation alternatives as we grow our addressable market. We continue to expect the business to accelerate as we close out 2022 and set a strong foundation for us to deliver record yields and adjusted EBITDA in 2023. Our formula for success remains unchanged. As we have demonstrated in the past, moderate capacity growth, moderate yield growth and strong cost controls lead to enhanced profitability and superior financial performance as we seek to improve the balance sheet. The future of the Royal Caribbean Group is bright. With our strong platform and proven strategies, I'm confident in our recovery trajectory and our ability to deliver on the Trifecta program as well as reach new financial records.
With that, I will turn it over to Naftali. Naf?