CNBC's Contessa Brewer interviews Royal Caribbean CEO Jason Liberty about the company's Q2 earnings, growth in younger travelers and the outlook for the cruise industry.

Royal Caribbean has experienced significant growth in the past year, with its shares more than doubling and second-quarter earnings surpassing expectations. CEO Jason Liberty attributes much of this success to a surge in demand from younger travelers, particularly millennials, who are booking cruises closer to departure dates and are willing to pay higher prices for available cabins.

Liberty also noted that while the company has seen a temporary decline in international travelers to the U.S., especially from Canada and Western Europe, there are signs of recovery. He emphasized the importance of delivering exceptional experiences and leveraging loyalty programs to maintain customer trust and encourage repeat business across Royal Caribbean’s global brands.

Royal Caribbean CEO: younger travelers driving cruise bookings

Royal Caribbean shares are up more than 100 percent over the last 12 months. Earnings today for the second quarter came in higher than expected. You raised guidance CEO Jason Liberty. It's great to talk to you a little bit about this quarter and what's coming down the pike. When we heard the earnings we saw shares declining. Do you think that investors just have expectations that are too high for Royal Caribbean continually trouncing expectations. Well I think there's a there's probably a few things in play Contessa. And first it's great to talk to you. I think I think I mean I do think that ambitions potentially for the second half of the year might have been a little bit higher than than what we put out there today in terms of our forecast. And of course you know the strength that we're seeing that we saw in the first quarter we saw in the second quarter. I think their expectation was we were just going to raise the back half of the year accordingly. But a lot of that performance was driven by close in demand and that close in demand is not something that we had seen at that level. And so we did not incorporate that into our forward looking guidance which is why you saw the share the share starts to rebound as we were going through the call. That actually got a lot of attention on the call. When you say close in demand what you mean is travelers booking a cruise much closer to when the departure date is than traditional. Like traditionally people would have maybe booked their cruises months and months away from when they actually left. How else are you seeing your consumers behavior and their preferences changing. Yeah well there's a series of shifts that are happening at least for us. You know one you know demographically about half our guests are now millennials or younger. And and so that that in the result has them booking a little bit closer in than than the Gen Xers and baby boomers in terms of their their their planning activities. But in general we're still seeing a very healthy demand booking window. So the people are planning further out. But what we saw especially in the second quarter and we saw this also in the first quarter is that in the in the weeks coming up to a sailing the very few cabins that we would have left on each voyage people not only were trying to get those cabins but they were willing to pay considerably more money to ensure they get the vacation experience that they're looking for. And so that's really what drove some of that close in demand. And we typically in our yield management programs really look for consistent patterns over longer periods of time to then kind of affect how we're going to consider that going forward. Does does your loyalty program matter. I mean when you were on the call you were talking a bit about competing with land based travel destination. So you're competing with Marriott and Hyatt and Hilton and they're known for their loyalty programs. Are you seeing that your travelers are willing to stick with you because of the program. Yeah. Well I would I think you you named a few of our competitors but I really think that we can we compete with all the experiences. I think last year we competed with Taylor Swift in terms of what a consumer is actually looking to do. I think loyalty is one very important component to it. How do you incentivize your guests to stay with inside your ecosystem. We think is really important. But I think probably more important is making sure each and every day and every single moment you're delivering and you're leveling up to the experience that that guest is looking for because at the center of everything is really trust and our and our guests and our customers trust that one we're going to deliver an experience to them that is in line with how we've communicated and marketed to them. And then we're going to surprise them as we sprinkle a lot of fairy dust all over the vacation experience that goes above and beyond what they had expected. And when you have that you combine that with loyalty you're able to curate things in front of them that's more relevant to them. That's a recipe really for great success. And I think that's what our brands and our and our and our company continues to do. That just gets enhanced with loyalty and also creating loyalty across our different brands which allows us to make sure that we meet them on the vacation experience they want to. As we talk about internally going from a vacation of a lifetime to a lifetime of vacations and our brands are able to deliver that for them. I want to get your perspective as a CEO of a global travel company. We have seen international travel decline into the United States and the travel and leisure industry has talked to me somewhat about concerns over brand USA and how the U.S. is perceived overseas right now because of our changing trade policies and the like. Are you seeing any indication that international travelers are concerned with. I don't know you being a U.S. based company or that the U.S. is losing some of its allure. Well I think we we certainly have seen some of a pullback from international guests coming to the U.S. seeing that more in terms of the travel from Canada down to the U.S. and a little bit on the Western Europe side. Your brand USA is obviously an incredible entity that helps promote travel to the U.S. and I and so I think that there is this kind of moment where there's a little bit of a pullback going on. You know when you think about I mean fortunately for us you know we we operate global brands. Those global brands are supported by yield management systems and marketing and commercial apparatus that seeks the highest paying guests in the world. So we're able to be much more flexible to based off of where that customer is coming from and what they're willing to pay. But I do think temporarily we saw this more in the in the first and second quarter and we're now seeing beginning the rebounding of that international traveler coming to the U.S. Jason Liberty. It's good of you to spend a few minutes with us right after earnings. Appreciate your time. Pleasure Contessa. Thank you so much.

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