Royal Caribbean sees European demand ease amid US-Iran conflict

Royal Caribbean Group said the ongoing conflict in the Middle East between the US and Iran has softened demand for some European cruises this summer.

The situation reduced yield growth expectations for the second half of 2026 despite bookings remaining at healthy levels, the company said in its second-quarter 2026 earnings call.

Chairman and Chief Executive Officer Jason Liberty said geopolitical tensions had weighed on near-term booking patterns, with the greatest impact expected during the third quarter.

The comments provide one of the clearest indications yet from a major cruise operator that the conflict has influenced consumer destination choices for the European summer season.

Liberty said Europe had begun the year strongly before the prolonged conflict altered booking behaviour.

“The situation had persisted longer than anticipated, influencing consumer destination preferences and resulting in more modest yield growth for Europe sailings this summer,” he said.

He noted that Europe had been “off to an incredible start at the beginning of the year,” before geopolitical developments and their impact on fuel markets tempered demand.

Despite the slowdown, Liberty stressed that European itineraries continue to perform well.

“That’s not to say that European yields are down. European yields are still very good for this year, but they are less than what we had expected,” he said.

He added that, without the geopolitical disruption, the company would likely have increased its financial outlook for the second half of the year.

“We would’ve raised the back half of the year, if not for those activities,” Liberty said.

Chief Financial Officer Naftali Holtz said Europe represents approximately 14% of Royal Caribbean Group’s full-year capacity, rising to 28% during the third quarter when the region accounts for its largest seasonal deployment.

Holtz said the company had experienced “a modest and near-term impact on 2026 bookings since the last earnings call, primarily due to the prolonged geopolitical activity that is driving our reduced yield outlook for the remainder of the year.”

The comments suggest the impact has been limited to booking trends rather than prompting any changes to deployment or capacity, with executives continuing to describe demand as strong overall.

Royal Caribbean Group has continued to invest in its European offering despite the softer yield outlook.

This year saw the introduction of Legend of the Seas, bringing the Icon Class to Europe for the first time, while the company also expanded its destination portfolio with the opening of the Royal Beach Club in Santorini.

Royal Caribbean is not the only cruise operator to acknowledge the impact of unrest in the Middle East on deployment and demand, with several lines having adjusted itineraries or cancelled planned Gulf programmes over the past year. However, the latest update suggests the effects are also being felt more broadly in consumer booking decisions for European cruises.