Consistent demand for cruise travel has provided a longer-than-expected booking season for operators like Royal Caribbean (RCL 2.27%). Normally from the holidays through the end of March, this year's wave season has stretched into April and beyond.

Amid the booking frenzy, Royal Caribbean posted impressive first-quarter results and raised its full-year guidance, citing a "strong revenue outlook." Here are three reasons to be bullish on this cruise line stock.

1. Profitability is on the horizon

Although Royal Caribbean took an adjusted loss of $59 million in the first quarter, CFO Naftali Holtz pointed out that the result was actually "significantly above our expectations and the high end of our guidance range." Compared to the prior year's loss of $1.2 billion in Q1, the company appears on the brink of profitability.

While shuttered during the pandemic, Royal Caribbean implemented both operational and cost structure-related measures that helped ease the impact of inflation on the bottom line. Pricing has been an effective strategy for the Miami-based vacation purveyor, and categories from food and beverage to airfare and shoreside operations all received price increases.

According to CEO Jason Liberty, these price hikes "effectively absorbed a tremendous amount of inflation" for Royal Caribbean. Underscoring his team's "commitment to enhancing profitability," Liberty cited how capacity growth, yield growth, and "strong cost controls" should buoy margins, profitability, and overall financial performance.

2. Record EBITDA anticipated in 2023

Following Q1's better-than-expected results, Royal Caribbean raised its full-year guidance for net yields and earnings before interest, taxes, depreciation, and amortization (EBITDA). The company anticipates this year's adjusted EBITDA to surpass its prior record from 2019.

Having brought in an adjusted EBITDA of $3.6 billion in 2019 and a mere $712 million in 2022, Royal Caribbean is shooting for 500%-plus EBITDA gains in 2023 year over year. The company expects to reach $5 billion in EBITDA annually by 2025 according to its financial initiative, known as the Trifecta Program.

After first-quarter EBITDA of $642 million, the second, third, and fourth quarters of 2023 will have to produce an average adjusted EBITDA of $986 million each to fulfill Royal Caribbean's guidance. Prospective investors should watch closely to see if the company either reduces its full-year guidance or delivers on its estimates. 

3. Bookings continue to surpass 2019 levels

During Royal Caribbean's earnings call in May, Holtz asserted, "Bookings have consistently been higher than the same time in 2019, with the gap widening as [the] wave extended further into the year than ever before."

The cruise line's private island destination in the Bahamas, Perfect Day at CocoCay, has proven to be a major driver of bookings, with more than half of cruises to the region including a visit there. Liberty believes a main pillar of Royal Caribbean's success has been its mass appeal to cruisers, attracting "vacationers who are seeking everything from a short getaway to Perfect Day to a luxury world cruise." 

A direct result of its record-breaking wave season already surfaced in Q1, when Royal Caribbean delivered vacations to an all-time-high 1.9 million guests. Not only that, the company achieved 102% occupancy last quarter amid "meaningfully better prices" than in the pre-pandemic era, according to Liberty.

For the year, Liberty anticipates serving over 8 million guests with higher prices and onboard sales growth initiatives to keep the revenue flowing.