NEW YORK (AP) — Royal Caribbean Cruises Ltd., battered by a sharp and prolonged drop in vacation spending, said yesterday it lost less in the first quarter than expected as bookings stabilised and cruise costs declined more than anticipated.

Travellers responding to aggressive discounts boosted bookings close to the date of departure, and the company plans to keep offering the deals.

"Admittedly, we are providing our guests more value than we would like to these days, and pricing continues to be miserable," said Chairman and Chief Executive Richard Fain during a conference call with investors. "But at least it seems to be at a miserable level that's relatively stable."

Falling fuel prices, the stronger dollar and internal cost-cutting all helped improve the results, Royal Caribbean said.

The company's shares jumped $1.82, or 16 percent, to $13.23 in afternoon trading. The stock has traded between $5.40 and $33.78 during the past 52 weeks.

Royal Caribbean lost $36.2 million, or 17 cents per share, compared with a profit of $75.6 million, or 35 cents per share, a year ago.

Revenue slipped 7 percent to $1.33 billion, from $1.43 billion in the first quarter of fiscal 2008.

Analysts surveyed by Thomson Reuters forecast a wider loss of 34 cents per share on revenue of $1.31 billion.