Royal Caribbean's Harmony of the Seas completes dry dock

In:
01 May 2021
By: 
Matt Hochberg

Another Royal Caribbean has completed her routine maintenance.

Harmony of the Seas is back in the water following a multi-week dry dock in Cadiz, Spain.

Harmony of the Seas is one of four Royal Caribbean ships that will get work done at the Navantia shipyards.

There was no major upgrades or enhancements made to Harmony of the Seas. Rather, it underwent routine work that is required every few years (usually five) so that the vessel can be properly maintained and seaworthy.

Captain Johnny Faevelen and James Van Fleet each posted photos of Harmony's final days at the shipyard.

These type of dry docks are known as a technical dry dock.

Harmony of the Seas arrived in Spain in early April to undergo technical work on her propellors, stabilizers and bottom valves, as well as give the ship some paint work. 

Around 8,000 liters of paint were needed for the work.

Read moreHarmony of the Seas Guide & Review

According to the shipyard, Jewel of the Seas and Symphony of the Seas will follow in May 2021, followed by Liberty of the Seas in July 2021.  

Royal Caribbean suspended upgrades and enhancements under its Royal Amplification program until further notice due to the global cruise industry shutdown.

Other ships have gone in for work over the last year, but not received upgrades, such as Allure, Explorer and Anthem of the Seas.

Prior to the global cruise industry shutdown, Harmony of the Seas was scheduled to sail in Europe this summer from Barcelona, although firm restart plans for the ship have not been announced by Royal Caribbean.

U.S ports begin vaccinating cruise ship crew members

In:
01 May 2021
By: 
Matt Hochberg

Two ports in the United States are helping get cruise ship crew members vaccinated to facilitate the cruise industry getting back to service faster.

On Friday, Port Canaveral became the first U.S. port to offer crew members a Covid-19 vaccine.

Port Canaveral's option to give crew members the vaccine came a day after Florida Governor Ron DeSantis and Surgeon General Dr. Scott Rivkees approved an expansion to vaccine eligibility in Florida to include individuals who are in the state for purpose of providing good or services for the benefit of residents and visitors of Florida.

Port Canaveral Chief Executive Officer John Murray released a statement celebrating the start tof this new program, "We have been working closely with our cruise partners, the Florida Department of Health and our port community to come up with a plan and timeline of vaccinating cruise ship crews that could begin the process for a safe return to cruising."

"This expanded eligibility is significantly important for our cruise tourism business, and we’re proud of our efforts to help get this industry up and running."

It is not clear which ship was the first to receive the doses.

Up to 1,000 COVID-19 vaccination shots per day can be provided to vessel crew members, shoreside and waterside support personnel, which aligns with recommendations released this week by the federal Centers for Disease Control for a return to cruising in the U.S.

Port Canaveral officials consulted with the U.S. Coast Guard, U.S. Customs and Border Protection and cruise line operators, as well as the CDC to develop its vaccination model to efficiently and expeditiously get vaccines disbursed to crew members and shoreside personnel. 

The Port of Galveston also plans to offer the vaccine to crew members next week, when the Carnival Breeze and Carnival Vista visit.

The Port of Galveston Board of Trustees announced during a meeting on Tuesday the new plan.

Through a partnership with the University of Texas Medical Branch (UTMB), the Pfizer vaccine will be made available to crew members.

Crew vaccination part of restart plan

Getting crew members vaccinated is part of the cruise industry's plan to return to service.

Royal Caribbean has already committed itself to vaccinating all of its crew members, as of February 2021.  At the time, there was not a plan in place to do so, but vaccine eligibility in the United States is beginning to open up widely.

Moreover, the U.S. Centers for Disease Control and Prevention (CDC) informed cruise lines this week that if they can get 98% crew members vaccinated, they can get cruise ships back into service sooner (along with 95% vaccinated passengers).

Getting crew members to get the vaccine appears not to be a problem for Royal Caribbean.

During a call with Wall Street analysts this week, Royal Caribbean International President and CEO Michael Bayley said crew were overwhelmingly in favor of getting vaccinated.

In a recent survey of crew members conducted by the cruise line, Mr. Bayley said, "we had over 98 percent positive response from our crew saying, yeah, we're going to get vaccinated."

Norwegian Cruise Line will not limit passengers to cruise line shore excursions

In:
30 Apr 2021
By: 
Matt Hochberg

Norwegian Cruise Line has quietly updated its cruise protocols for restart, which includes now allowing passengers to go on third party shore excursions.

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Norwegian Cruise Line (NCL) has a listing of health and safety protocols on its website, known as Sail Safe, in which it has a changed the tour policy.

Based on comparing the website today versus an archived copy, NCL is now allowing passengers to book any shore excursion the wish, instead of limiting them to cruise line only tours.

Guests are free to explore ports of call on their own, according to protocols in each specific port, and can purchase shore excursions as they wish.

This is an important shift in policy considering most lines up until now have required guests to only book shore excursions through the cruise line in order to retain a "bubble" approach to cruising.

New policy on NCL website

Old policy from NCL website from April 6, 2021

NCL's change may also reflect the line's proposed restart plan for every single crew member and passenger to be fully vaccinated, exceeding even the U.S. Centers for Disease Control & Prevention (CDC) updated guideline.

NCL's change is also noteworthy since the cruise line is part of the Healthy Sail Panel, which it founded in conjunction with the Royal Caribbean Group.  Both cruise lines rely on the Healthy Sail Panel to formulate its policies onboard.

On their website, NCL states their policies are guided by the Healthy Sail Panel, "We have developed a comprehensive and multi-layered set of health and safety protocols that span the entire cruise journey, guided by the expert advice from our Healthy Sail Panel. We will continuously refine and improve these protocols as science, technology and our knowledge of the virus improve and will provide guests with all relevant information or any changes to protocols prior to setting sail."

Thus far, the Healthy Sail Panel has only published its set of recommendations from September 2020, although it is understood the panel has been working behind the scenes with the cruise lines.

Among the 74 recommendations, recommendation 59 recommends cruise lines limit guests to cruise line tours.

Recommendation 59: During the initial return to sailing, cruise operators should only allow guests debarking from a ship at a destination port to participate in cruise line-sponsored or verified excursions as a way of limiting potential exposures in the destinations they visit.

It is worth noting these recommendations were written before vaccines became widespread, and classified it as a temporary recommendation, which could be modified or removed later when health conditions permit.

In March, Royal Caribbean's vice president EMEA, Ben Bouldin, said the impact the vaccine has had prompted the cruise line to ask the Healthy Sail Panel to go over their recommendations.

"We have asked the Healthy Sail Panel to go back and revisit their findings in light of the improvements and the encouraging news vaccines provide."

The origin of limiting shore excursion options goes back to the first cruise ships to restart sailings.

In an effort to create a travel bubble, MSC Cruises restarted sailings in August 2020 with the rule in place. They even refused to let a family back onboard that broke the rule.

What about Royal Caribbean cruises this summer?

Royal Caribbean has not formally announced its protocols and rules for sailings restarting this summer, but thus far there have been strong indications guests can expect to be limited to cruise line excursions.

Royal Caribbean's Senior Vice President, Sales, Trade Support and Service, Vicki Freed, said in March 2021 guests will be limited to Royal Caribbean excursions in Cozumel and Grand Bahama Island.

"With our own little bubble, we can really make sure the health and safety protocols are being followed."

Royal Caribbean's own Shore Excursions Health Acknowledgement confirms that only cruise line tours will be permitted, "guests are currently only permitted to book and participate in Shore Excursions which are selected and approved by Royal Caribbean Group."

Guests booked on Odyssey of the Seas sailings from Israel received a list of terms and conditions for their sailings which also allude to the limitation of shore excursion options you can book.

Of course, all of this could change at any time, much like NCL has done.

Moreover, Royal Caribbean has promised additional health and safety measures to be implemented by Royal Caribbean will be announced at a later date.

Royal Caribbean's Royal Beach Club in Nassau is almost a done deal

In:
30 Apr 2021
By: 
Matt Hochberg

It looks like Royal Caribbean's deal to build a beach club in Nassau, Bahamas is nearly complete.

At a virtual town planning meeting in Nassau, a Royal Caribbean representative said the deal is waiting final signatures to be completed.

According to Eyewitness News, Royal Caribbean Group Vice President of Private Destinations, James Black, told the meetings attendees, "all terms for the development have been agreed to, approved and are awaiting signature for final execution of the contract."

The beach club will be built on 7 acres on the western end of Paradise Island.

According to Mr. Black, Royal Caribbean had originally wanted more land, but negotiations brought it down to seven, "The crown land lease is seven acres. Royal Caribbean had originally requested 21 acres including the lighthouse and the government negotiated own from 21 to 10 acres and now to seven acres under submission."

A report earlier this month pegged the project at 13 acres.

Royal Caribbean believes the new beach club will bring an additional 1.2 million visitors to Nassau annually by 2030, with 3,500 daily visitors.

Mr. Black also repeated the same targeted opening date as previously reported, which is a 2023 opening.

Construction would begin "later this year".

The meeting also brought up concerns from other attendees who had competing projects, as well as other concerns.

Some other landowners in the area are concerned about how Royal Caribbean's project may impact their own operations.

Tribune Business noted environmentalists wanted to know how the land, which is currently zoned as  "low density" residential, would have to be rezoned and the associated impact.

Royal Caribbean said was waste management would be handled through a partnership with local vendors, "Our plan to handle solid waste is to work with a local vendor to make use of existing recycling and solid waste management that’s available in Nassau currently."

"There will be a commercial barge operated by local vendors that will address the solid waste."

What is the Royal Beach Club?

Royal Caribbean first announced intentions to build a private shore excursion option in Nassau in March 2020, but has provided no official updates since the cruise industry shutdown shortly thereafter.

Royal Caribbean said the beach club would be built at the western end of Paradise Island, and would be cruise line guests.

Details on what would be offered to guests have not been divulged, but paperwork filed with the Bahamas seems to indicate the club could feature dining pavilions, a 26,000 square foot pool, 4,000 square foot “splash pad” for children, 14 beach bars; restrooms and cabanas.

Royal Caribbean has not publicly commented on any kind of timeline for the Royal Beach Club, nor have they given any update on it since acknowledging they purchased land for the project in early 2020.

Royal Caribbean Group CEO on 2021 Alaska cruises: "reason for some hope"

In:
30 Apr 2021
By: 
Matt Hochberg

Is the Alaska cruise season not totally dead for 2021?

During Royal Caribbean Group's first quarter earnings call on Thursday, Royal Caribbean Group Chairman and CEO Richard Fain was asked about the prospect of return to Alaska for this year, and while "slightly complex", he did not rule it out.

The Alaska cruise season faces two hurdles: the U.S. Centers for Disease Control and Prevention (CDC) ban on cruise ships, as well as Canada's own ban on cruise ships from its waters.

Mr. Fain said even if the CDC relents on its ban, they would need would need a waiver from the Passenger Vessel Services Act (PVSA), or Canada would have to allow at least technical stops.

The Passenger Vessel Service Act (PVSA) of 1886 requires foreign flagged cruise ships to call on a foreign port if sailing a closed-loop cruise form the United States.

This means, cruise ships cannot sail from Seattle and only visit Alaska ports.  It must make a stop outside the country, and Canada is the only place between Seattle and Alaska for that.

The justification for both the PVSA is to protect the U.S. Merchant Marine (the licensed (officers) and documented (trades) personnel on the ships) and to protect U.S. shipyards that both build and repair the ships.

Mr. Fain said during the earnings call that Royal Caribbean and "others" are working on resolving the issue with the CDC and Canada, "we're working on both and others are working on both, but we can't be certain where that will end up."

"I think given the momentum, there's reason for some hope, but that's a sufficiently complex and confusing situation that I don't think we're going to put odds on it one way or the other."

"But as to Alaska specifically, while we're optimistic and we're working to make that happen, there are these other factors."

"We do think that will be in time for the Alaskan season. And we're obviously hopeful that we'll be able to solve the issue with Canada in either one of these two ways."

U.S. Senators Lisa Murkowski and Dan Sullivan, both R-Alaska, introduced a bill in late February 2021 that proposes alleviate the Passenger Vessel Services Act (PVSA) restrictions for cruise ships transporting passengers between the State of Washington and the State of Alaska.

The Alaska Tourism Recovery Act (H.R.1318) was introduced in the House on February 24, 2021 and was referred to the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation the next day.

When the bill was introduced, Royal Caribbean International President and CEO Michael Bayley posted on social media in support of the bill, "If passed, this would represent a step in the right direction for the Alaskan communities that depend on the tourism industry."

"If you support the bill, please reach out to your representatives to make your voice heard!"

So far, that bill has not moved past that point.

Besides Royal Caribbean's lost cruise revenue, the state of Alaska is facing dire consequences for a second cancelled cruise season in a row.

Alaska Governor Mike Dunleavy (R-AK) said over the course of the lost 2020 and 2021 cruise seasons, Alaska will have a $3.3 billion loss in Alaska, "that's in a state with about a fifty six billion dollar GDP, so it's going to be significant."

"We're going to lose millions of dollars in local revenue for our communities, especially along the coast. Unemployment rates will remain stubbornly high when we can actually lower them through this process."

Meanwhile, Royal Caribbean's Alaska cruises are not cancelled yet.

Royal Caribbean did remove bookable Canada-related cruises from its website, but existing bookings are still on hold.

Royal Caribbean offering up to 35% off Cruise Planner purchases with Seas the Deals sale

In:
30 Apr 2021
By: 
Matt Hochberg

Royal Caribbean is offering a discount on cruise add-ons, such as drink packages, shore excursions and more, with its new sale.

The Seas the Deals offer runs between April 30 - May 5, 2021 and is valid on sailings from June 1, 2021 - April 30, 2022 (excluding Quantum of the Seas).

For Quantum of the Seas sailings, the sale is valid on sailings between May 10 2021 - April 30, 2022.

Here is what is included during the sale:

BEVERAGE: Up to 40% off 

  • Classic Soda Beverage Package: 30% off onboard prices.
  • Classic Soda Beverage Package + VOOM Surf & Stream 1 Device: Over 35% off onboard prices.
  • Dasani Water Cans: 40% off onboard prices.
  • Deluxe Beverage Discount varies by ship.
  • Deluxe Beverage Package + VOOM Surf & Stream 1 Device: Over 30% off onboard prices
  • Refreshment Package: 30% off onboard prices

SHORE EXCURSIONS: Up to 40% off

  • Shore Excursions: Discount varies by ship

INTERNET: Up to 50% off

  • The Key: Discount varies by ship.
  • VOOM Surf + Stream Voyage Package 1, 2, 3, 4 Device(s): Discount varies by ship.
  • VOOM Surf Voyage Package 1, 2, 3, 4 Device(s): Discount varies by ship

DINING: Up to 60% off

  • Unlimited Dining Package on 3N – 9N sailings: Discount varies by ship

ACTIVITIES: Up to 20% off

  • All Access Ship Tour (Excludes Grandeur of the Seas)

Gifts & Gear: Up to 20% Off

  • Anniversary Decorations with Champagne
  • Happy Birthday Decorations with Chocolate Cake & Strawberries
  • Happy Birthday Decorations with Vanilla Cake & Strawberries
  • Inky Beach Set
  • Inky Beach Towel (TicTacToe)
  • Inky Travel Set
  • Red Wine and Cheese
  • Royal Caribbean Beach Towel
  • Strawberries with Champagne
  • White Wine and Cheese

PHOTO PACKAGES: Up to 70% off

  • Photo Packages: From 5 - 100 Print and/or Digital Options: Discount varies by ship
  • Photo Package: Private Photo Session: Discount varies by ship
  • Photo Package: Picture This Private Studio: Discount varies by ship

SPA: Up to $30% off

  • Spa Packages:30% off onboard prices.
    • Only on Allure, Anthem, Harmony, Independence, Navigator, Oasis, Ovation, Odissey, Quantum and Symphony of the Seas

To check if your sailing has this new offer available, log into the Cruise Planner on Royal Caribbean's web site look for any available offers. Keep in mind that not all sailings may see the sale applicable, nor are all offers significantly cheaper than previously posted.

If you spot a better discount on something you already pre-purchased, you should be able to cancel the purchase and then re-purchase the same item under this promotion.

More helpful information

CDC update means there are now two potential timelines for cruise ships to restart

In:
29 Apr 2021
By: 
Matt Hochberg

The cruise industry is abuzz with the news that the U.S. Centers for Disease Control (CDC) has provided an update for cruise ships to restart by summer 2021.

Royal Caribbean International President and CEO Michael Bayley was quite optimistic about the chances for cruises to resume in July.

"I think this commitment to mid-July is looking very realistic based upon what we we saw last night," Bayley told Wall Street analysts during an earnings call on Thursday.

"I think the target that's been stated and that we've all been working towards is a mid July. And I think that after what we received last night, it's looking very realistic."

Part of that optimism is based in the CDC allowing cruise ships to restart cruises again and bypass test cruises if 95% of the passengers and 98% of the crew are fully vaccinated.

The changes follow up on a better relationship between the cruise industry and the CDC.  Mr. Bayley said, "we've been in very constructive dialogue with the CDC over the past few weeks."

"I think the mood of Royal Caribbean last night and late into the night and then just speaking also to some of our industry colleagues was simply positive that all of this dialogue that was constructive had resulted in and clearly being heard."

Two pathways

One of the major tenets of the CDC's letter was cruise ships can bypass the required simulated test voyages and go directly to revenue sailings if 98% of crew and 95% of passengers are fully vaccinated.

During the call, Mr. Bayley elaborated on the possibility of some ships requiring the vaccine, while others may not.

"There'll be really two pathways, one pathway for vaccinated crew and largely vaccinated guests that meet the threshold that they've defined. And that would mean that there wouldn't be a requirement for a simulated voyage etc, and there would be a different expectation on protocols and planning. So it's a faster route."

"And then for ships that wouldn't wouldn't meet that threshold for whatever reason, there would be a different timeline and a different set of protocols and requirements."

"So fundamentally that there's two pathways. It's not that simple, but that's a way of simplifying."

Both Bayley and Royal Caribbean Group Chairman and CEO Richard Fain warned that there's still a lot of uncertainty about what the CDC update means, and Royal Caribbean has already reached out to the CDC for clarification.

Will enough people be vaccinated?

Mr. Bayley cited surveys of their customer base as a good sign that many cruisers are willing to, or have already, be vaccinated in order to cruise.

"There's an overwhelming certainty for our customer base. People are just saying, I'm getting vaccinated."

"And if you skew older, the percentage increases quite significantly, mainly because, of course, when the vaccinations started, it started with the older age group first."

What about the crew?

Mr. Bayley said a recent survey pointed to a survey of crew members the cruise line conducted recently as proof Royal Caribbean could meet the threshold by the CDC, "we had over 98 percent positive response from our crew saying, yeah, we're going to get vaccinated."

Royal Caribbean talks about CDC letter and what it means for kids

In:
29 Apr 2021
By: 
Matt Hochberg

Royal Caribbean Group Chairman and CEO Richard Fain started off his call with Wall Street analysts with extremely positive news regarding a new update from the U.S. Centers for Disease Control and Prevention (CDC).

Late last night, the CDC provided cruise lines with an update that opens up the possibility of cruises to restart this summer.

Mr. Fain said the letter is an example of "a significant improvement in the extent and the quality of our dialogue with the CDC."

According to Fain, the CDC has recently significantly increased its efforts in terms of improved communication between the cruise industry and the federal agency.

The updates were described as "very constructive clarifications and the amplifications" which addressed many issues Royal Caribbean had with the Conditional Sale Order (CSO). These are the same instructions that were described by the cruise industry as "unduly burdensome, largely unworkable" when they were first announced.

Mr. Fain sees the new update from the CDC as a major step forward, "We believe that this communication really helps us to see a clear and achievable pathway forward to a safe and healthy cruising in the near future."

Cautious optimism

While the news very welcomed by the cruise industry, Mr. Fain was quick to point out there are still questions to sort out.

"There are still a great many details to be provided in the future and others that need to be resolved. We need to be cautious about all of those. Nevertheless, we now have high hopes that these details can be resolved quickly."

However, Mr. Fain did not rule out a July restart, "It could be possible to restart cruising by mid-July."

"I would also emphasize that the restart does not mean that we will immediately go into full operation. We are hopeful about restarting. That restart will be gradual and deliberate."

Equal treatment

Another positive outcome from this letter is what Mr. Fain sees as a shift in how the CDC treats the cruise industry.

Fain was happy with the tone of the letter, and the CDC's increased communication, "We are pleased that the CDC letter really does reflect an intention to treat us similarly to other industries in similar circumstances."

"Our goal throughout this pandemic and then to make a cruise ship where we can control the environment safely and Main Street, USA. We've already demonstrated our ability to do that, and we are now eager to resume life, as so many other businesses are doing."

What about kids?

While the CDC has opened up the possibility for cruise ships to restart this summer, many cruise fans realized requiring 95% guests to be vaccinated means little to no children onboard in the short term.

During the earnings call with analysts, Royal Caribbean International President and CEO Michael Bayely spoke about what to expect as it relates to kids.

Both he and Mr. Fain cautioned the letter is new, and there are follow up questions to determine, but Bayley felt kids are not out of the question, "We really do have to sit, study and and discuss with the CDC and understand all of these these different nuances."

Mr. Bayley believes the age restriction for kids, which now stands at 16, will be lowered shortly, "We've been told that in the coming weeks and months that that age limit will likely drop to 12. And and we're encouraged by that."

So what about kids below 11?

Mr. Bayley said that age range is not enormous, "obviously we carry a lot of kids 11 and under, but relatively speaking, as a percentage of our total guest counts, it's quite a small number. So we're not overly concerned with that."

Royal Caribbean reports $1.1 billion loss in first quarter of 2021

In:
29 Apr 2021
By: 
Matt Hochberg

Royal Caribbean Group released its first quarter 2021 results on Thursday, along with a business update on where things stand right now related to the global health crisis.

While Royal Caribbean did lose $1.1 billion or $4.66 per share compared to US GAAP Net Loss, that is an improvement over the same time last year, when it lost $1.4 billion.

The Company also reported Adjusted Net Loss of $1.1 billion or $4.44 per share for the first quarter of 2021 compared to Adjusted Net Loss of $310.4 million or $1.48 per share in the prior year.

Royal Caribbean Group's monthly cash burn is approximately $300 million, which is slightly higher than the previously announced range driven mainly by fleet wide restart expenses and timing.

Positive outlook

The biggest difference in this quarter versus last quarter is the anticipated summer sailings that will begin as early as June.

A total of 11 ships across all of Royal Caribbean Group's brand will sail from the Caribbean and Europe, in addition to the four ships already sailing. 

The company said reaction to the new sailings has been "positive".

These cruises are taking place with adjusted passenger capacity and the enhanced health protocols developed with government and health authorities, and guidance from the Healthy Sail Panel.

Royal Caribbean Group Chairman and CEO Richard Fain also talked about the new letter from the CDC which gave a more favorable possibility of cruise ships resuming sailings from the United States this summer.

"Last night, the CDC notified us of some clarifications and amplifications of their Conditional Sail Order which addressed uncertainties and concerns we had raised," Mr. Fain said in a statement.

"They have dealt with many of these items in a constructive manner that takes into account recent advances in vaccines and medical science."

"Although this is only part of a very complex process, it encourages us that we now see a pathway to a healthy and achievable return to service, hopefully in time for an Alaskan season."

Cash outlook

With quarterly losses measured in the billions of dollars, one of the many concerns about the health of the company has been cash flow.

Royal Caribbean Group has raised approximately $12.3 billion through a combination of bond issuances, common stock offerings and other loan facilities.

Among the actions taken during the first quarter of 2021 to help include:

  • Completed a $1.5 billion equity offering at a price of $91 per share;
  • Issued $1.5 billion of 5.5% senior unsecured notes due 2028, the proceeds of which have been and will be used to repay principal on debt maturing or required to be paid in 2021 and 2022;
  • Amended its $1.0 billion term loan due April 2022 to extend the maturity date for consenting lenders by 18 months and, in connection therewith, repaid $138.5 million of principal on the facility using proceeds from the senior notes;
  • Amended its $1.55 billion revolving credit facility due October 2022 to extend the maturity date for consenting lenders by 18 months and, in connection therewith, repaid $277.6 million of principal on the facility using proceeds from the senior notes (with a corresponding reduction in commitments);
  • Completed the balance of the previously announced amendments to its export credit facilities, which in total defer $1.15 billion of principal amortization due before April 2022 and waive financial covenants through at least the end of the third quarter of 2022 and;
  • Amended the majority of its commercial bank facilities and credit card agreements to waive financial covenants through at least the end of the third quarter of 2022.

As of March 31, 2021, the Company had liquidity of approximately $5.8 billion, including $5.1 billion in cash and cash equivalents and a $0.7 billion commitment for a 364-day facility.

Bookings update

Royal Caribbean Group reports booking activity for its 2021 cruises are, "aligned with the Company's anticipated resumption of cruising."

Pricing on these bookings is higher than 2019 both including and excluding the dilutive impact of future cruise credits (FCCs).

Cumulative advance bookings for the first half of 2022 are within historical ranges and at higher prices when compared to 2019. This was achieved with minimal sales and marketing spend which the Company believes highlights a strong long-term demand for cruising.

As of March 31, 2021, the Company had approximately $1.8 billion in customer deposits, in line with its December 31, 2020 balance. Approximately 45% of the customer deposit balance is related to FCCs.

Since the suspension of guest operations on March 13, 2020, approximately 50% of the guests booked on cancelled sailings have requested cash refunds.

Report: CDC says cruise ships could restart in mid-July with 95% vaccinated passengers

In:
29 Apr 2021
By: 
Matt Hochberg

A new ray of hope for cruises to sail from the United States is shining down, based on the contents of a letter.

A letter sent to the cruise industry by the U.S. Centers for Disease Control and Prevention (CDC) indicates a mid-July start up is possible, provided certain requirements are met.

The letter was first shared by USA Today, and provides a much more realistic outlook for cruise ships to sail in the U.S.

The letter was penned by the CDC's head of the Maritime Unit, Aimee Treffiletti, reads, "We acknowledge that cruising will never be a zero-risk activity and that the goal of the CSO’s phased approach is to resume passenger operations in a way that mitigates the risk of COVID-19 transmission onboard cruise ships and across port communities"

A CDC spokesperson then confirmed to USA Today that cruises might be able to start up by mid-July, "CDC looks forward to continued engagement with the industry and urges cruise lines to submit Phase 2A port agreements as soon as possible to maintain the timeline of passenger voyages by mid-July."

Also included in the report are five points of clarification that give cruise lines better insight into the CDC's expectations for a restart:

  1. Ships can bypass the required simulated test voyages carrying volunteers and jump to sailings with paying passengers if 98% of crew and 95% of passengers are fully vaccinated.
  2. CDC will review and respond to applications from cruise lines for simulated voyages within 5 days, a review previously expected to take 60 days.
  3. CDC will update its testing and quarantine requirements for passengers and crew on sailings with paying passengers to align with the CDC's guidance for fully vaccinated people. So, for example, instead of taking a PCR lab test ahead of boarding vaccinated passengers can take a rapid antigen test upon embarkation. 
  4. CDC has clarified that cruise ship operators may enter into a "multi-port agreement" rather than a single port agreement as long as all port and local authorities sign the agreement. 
  5. The CDC has clarified guidance on quarantine guidelines for passengers who may be exposed to or contract COVID-19. For example, local passengers may be able to drive home and passengers who have traveled by air to cruise may quarantine in a hotel.

Pressure has been mounting across different platforms to give cruise lines a chance to resume sailing.  Lawsuits, new legislation, and a vigorous write-in campaign have been some of the new initiatives thrown at the CDC after months of inaction by the agency.

The updated information in the CDC's letter follows blow back on the CDC after they released updated technical guidance for its Framework for Conditional Sailing on April 1.

The new guidance was largely seen as lacking and impractical. CLIA called it, "unduly burdensome, largely unworkable".

Moreover, it seems the CDC is still adhering to a zero-risk objective rather than the mitigation approach to Covid that so many others facets of life have adopted.

Vaccine requirement

Besides the new communication, the clause that allows cruise ships to bypass the test cruises if they have 95% fully vaccinated passengers and 98% fully vaccinated crew members is a new change.

So far, Royal Caribbean has said it has not made a decision on if it will require the vaccine for all of its ships, although all of the ships sailing this summer from the Caribbean and Europe will require it.

Read moreEverything we know about if Royal Caribbean will require a vaccine

On April 5, Norwegian Cruise Line Holdings submitted a proposal that included 100% vaccination of guests and crew onboard, as well as strict health and safety protocols for all sailing through October 31, 2021.

NCLH believes by requiring vaccines of every single person onboard its ships initially, in addition to comprehensive protocols including universal COVID-19 testing, their plan exceeds the intent of the CDC’s Conditional Sailing Order (CSO).

Florida Governor Ron DeSantis has gone on record by saying he does not think private business should be able to require a vaccine for its passengers.

"I'm very supportive of getting our cruise lines back up and running," Gov. DeSantis said in an interview. "We think they should be able to sail. But we also don't think that they should be able to require your personal health information in that regard."

Backing up his opinion is a new State of Florida Executive Order that prohibits Covid-19 vaccine passports (EO 21-81).

Section 2 of the Executive Order prohibits businesses from requiring their customers to "provide any documentation certifying COVID-19 vaccination or post-transmission recovery to gain access to, entry upon, or service from the business."

Royal Caribbean reaction

So far, two of Royal Caribbean's top executives have publicly commented on the letter.

Royal Caribbean International President and CEO Michael Bayley posted on Facebook he is excited about the potential of this change, "Last night, we received great news from the CDC who expressed their commitment to the resumption of cruising this summer.

"This is a result of the consistent conversations we have been having with the agency to determine the best path for our return to service. Thank you all for making your voices heard and for believing in our industry. We will be back!"

Read moreRoyal Caribbean talks about CDC letter and what it means for kids

Royal Caribbean Group Chairman and CEO Richard Fain also mentioned the letter in the company's business update for investors, "

Last night, the CDC notified us of some clarifications and amplifications of their Conditional Sail Order which addressed uncertainties and concerns we had raised," Mr. Fain said in a statement.

"They have dealt with many of these items in a constructive manner that takes into account recent advances in vaccines and medical science."