Speaking exclusively to E! News a source said: "They looked very loved up and were paying more attention to each other than the view."
The official title to their relationship comes as no surprise following recent news that Katy, 31, and 39-year-old Orlando - who has five-year-old son Flynn with ex-wife Miranda Kerr - have keys to one another's homes.
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A source said: "They've barely been apart for weeks, so Orlando figured he should officially give Katy a key to his apartment so she can come over whenever.
"She was thrilled and offered him one to her place on the other side of LA too.
"They spend most nights at his place and practically live together but the holiday cemented things between them. Now she's happier than ever."
- Bang! Showbiz