Speaking to investors during the Royal Caribbean Group's second quarter earnings call, Chairman and CEO Richard Fain gave an overview of his company's restart plans.
While there was another quarter of losses exceeding a billion dollars, the outlook looks far more positive with ships returning to service.
Mr. Fain was optimistic that despite issues his company faces right now, the future looks very good.
It seems Mr. Fain believes the key has been a combination of healthy sail protocols, a compelling onboard experience for guests, and strong demand for cruises, especially in 2022.
Of course, there are going to be hesitations to travel again, and Mr. Fain thinks providing customers peace of mind is the key, "We believe that the best way to get them comfortable is to demonstrate just how well the process works."
"We call that the flywheel effect. Once we get the vast majority of our fleet back online and thousands of people sailing safely, it will make even more people feel comfortable doing the same thing."
To make things safe onboard, Royal Caribbean Group identified three pillars of health and safety:
- Ensuring ship experiences are as safe, or safer, than the shoreside equivalents
- Meeting and exceeding our exacting pre-pandemic expectations
- Doing so in a financially prudent manner
In terms of the protocols, Mr. Fain is quite pleased with how things are going onboard, "The idea is to limit the spread of Covid-19 aboard our ships. We all know it's impossible to eliminate cases on board a ship totally, just as it's impossible to eliminate cases on land."
"But the steps that we are taking are designed to prevent the isolated cases from becoming an outbreak, and it seems to be working."
Further building on that confidence is when there are cases onboard, they are limited and isolated.
"We have had people test positive, but almost everyone around them is vaccinated, they've remained isolated cases. That's the goal where individual cases and no significant spread."
"Repeat this with a few hundred thousand or million cruisers, and that creates the trust that will drive our resurgence."
According to Fain, in the month of July (excluding Singapore sailings), an average of 92% of the people on board cruise ships were fully vaccinated and Mr. Fain believes this number is likely to rise going forward.
Strong demand
As they say, the proof is in the pudding, and Royal Caribbean Group has been surprised how many are eager to get back onboard.
"Our guests are eager to cruise again," Mr Fain said during the call. "We had hoped that there would be pent up demand for cruises, but even we were surprised by the level that we're seeing."
"It is clear people are to people are eager to travel, to take a vacation and we are ready to make their vacation dreams come true."
There is likely to be more losses still to come, but the company feels good about their chances as next year comes around.
"While the third and fourth quarter of this year will continue to be painful, it's looking generally in line with our return to service and occupancy ramp up expectations."
"We don't expect 2022 to be a normal year. However, we are seeing rapid and steady progress towards normalcy starting in the spring and summer of next year."
Delta variant
While the Delta variant has the attention of a lot of people, Mr. Fain believes it is a short-term concern, not a long-term problem.
"The Delta variant is problematic for everyone, but even this looks manageable by our extensive protocols," Mr. Fain said while addressing the concern.
"If we only obsess about the present, we will fail to prepare for the future. We must keep our eye firmly on that future that we can see is coming."
