12:47 PM EST, 02/04/2025 (MT Newswires) -- Royal Caribbean Group's (RCL) strong forward bookings, higher pricing, and moderate yield growth for 2025 are expected to support cash flow growth and enhance the company's credit measures, S&P Global Ratings said in a Tuesday note.

"We believe Royal has sold more than two-thirds of its capacity for 2025, which provides good forward revenue and cash flow visibility," S&P said.

The firm noted that the company's current booked position is in line with prior years but at higher average prices per day, with the premium over last year widening since its Q3 earnings call.

Investments in new ships and private destinations are also driving stronger bookings, according to the note.

While moderate yield growth in 2025 is expected to support continued revenue gains, S&P pointed out that a potential economic downturn could weigh on future bookings.

However, the company has "sufficient cushion" to withstand a moderate to severe recession. With a strong cash flow base and a moderate ship delivery schedule, Royal is positioned to continue reducing leverage, the ratings agency added.

S&P upgraded Royal Caribbean Group's rating to BBB- from BB+, with a stable outlook.

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