Royal Caribbean Blog

Royal Caribbean has been successfully sailing Quantum of the Seas in Singapore since December 2020, so what will be the next cruise ship to restart operations?

While Quantum will remain in operation from Singapore for a little while longer, further restart plans are still ambiguous.

During Royal Caribbean Group's fourth quarter earnings call with investors, the next ship to restart operations could be outside the United States.

Royal Caribbean Group CFO Jason Liberty noted the company could add a second ship outside of the U.S. soon, "We are already operating Quantum of the Seas in Singapore, and our second ship in the water could also be outside of the US."

The fact Royal Caribbean may be able to resume sailings outside of the United States is not surprising, considering the success it has had with Quantum of the Seas in Singapore and its TUI brand of cruise ships in Europe.

"These early returns to service not only provide vacations, but they provide an opportunity to demonstrate proof of concept as well," Royal Caribbean Group Chairman and CEO Richard Fain said during the call

"They provide important learnings on how we can coordinate most effectively with governments, port authorities, travel partners, and others to protect our guests, crew, and the destinations we visit."

Thus far, Royal Caribbean International President and CEO Michael Bayley said about 35,000 Singaporeans have sailed on Quantum of the Seas and he says the customer satisfaction increased with the new health protocols compared to before.

"The customer satisfaction ironically is higher with our protocols than it was before our protocols, which is quite funny in a way. And our revenue has exceeded our expectations both from a ticket and an onboard revenue perspective."

Which ship and where would it sail from?

Royal Caribbean cruises are shutdown in North America, Europe, and Australia through at least April.  Even May sailings look to be questionable at this point.

The ship with the best odds for that to occur is Spectrum of the Seas, since is scheduled to potentially restart sailings in China in April 2021.

Whether or not Spectrum sailings are able to restart in China remains to be seen, as throughout 2020 sailings from China looked like they might be able to restart sooner, but that never materialized.

Australia remains closed to cruise ship traffic, so that essentially leaves Europe.

Jason Liberty told investors during the call his company is working with governments around the world about opening back up, "With regards to ship starting in Australia or China or Europe or elsewhere, for example, we literally are in discussions globally around the world with different governments and looking at where they are with COVID and vaccines, et cetera, et cetera."

"I think the point is that there's a lot of opportunity that's starting to open up globally in terms of what's occurring with COVID. And so we are in discussions around the world."

Last, but not least, we have to remember the "second ship" that Mr. Liberty mentioned did not specify if that would be a Royal Caribbean International cruise ship, or a ship from one of the other brands operated under the Royal Caribbean Group corporate umbrella.

Royal Caribbean Group just sold its Azamara cruise line, and the new owners have cancelled cruises through June 30, 2021.

Azamara announced it has decided to extend its global suspension of cruises through June 30, 2021.

In a statement, Azamara said the cruise line wants to ensure it can sail safely, "As the world continues to confront the many challenges resulting from COVID-19, our primary goal continues to be a healthy return to service for our guests, crew and the communities we visit. "

Despite being sold, Azamara also said it is "working diligently with Royal Caribbean Group's Healthy Sail Panel to create a small-ship cruising experience that will protect the wellbeing of our guests and crew yet stay true to the Azamara spirit."

Royal Caribbean currently has its cruises cancelled through the end of April 2021.

Sycamore Partners recently acquired Azamara from Royal Caribbean Group in January 2021.

Royal Caribbean created Azamara in 2007 and operates a fleet of three small cruise ships.

During the earnings call with investors, Royal Caribbean Group CFO Jason Liberty said the sale of Azamara made sense given the opportunity, "This opportunity came our way here with Sycamore. It gives Azamara an opportunity to grow. And I think that it's a great brand that we think will do quite well under this other -- this other venture."

Guests with affected sailings have three options – accept a 125% future cruise credit to book a cruise by April 30, 2022 for departure before September 30, 2022; “lift and shift” the booking to a 2022 equivalent within four weeks of original sailing date; or request a full refund by May 20.

Royal Caribbean has released its Short Caribbean sailings for Summer 2022 - Winter 2023, which are now available for booking.

Royal Caribbean's website has been updated with the new itineraries, which are available to book immediately.

The most noticeable change for these short sailings is all three Freedom Class cruise ships will sail from Florida.

Freedom of the Seas will sail 3- and 4-night cruises from Miami to Nassau and top-rated Perfect Day at CocoCay in The Bahamas.

Independence of the Seas will sail 3- and 4-night cruises from Port Canaveral to The Bahamas, with full-day visits in Nassau and Perfect Day at CocoCay. 

Liberty of the Seas will move to Fort Lauderdale, Florida to sail alternating 3- and 4-night cruises to The Bahamas, including Perfect Day at CocoCay and Grand Bahama Island – a new destination for the ship.

Read more: What is the best time to cruise to the Caribbean?

Mariner of the Seas will remain in Port Canaveral as well, now with southbound 4- and 5-night cruises to the western Caribbean and Perfect Day at CocoCay.offering short sailings.

In addition, Adventure of the Seas and Grandeur of the Seas will offer short cruises from Galveston. 

Over in Tampa, Brilliance of the Seas and Rhapsody of the Seas will offer 4- and 5- night Western Caribbean cruises.

View the full Short Caribbean 2022-2023 sailings:

• Adventure of the Seas
• Brilliance of the Seas
• Freedom of the Seas
• Grandeur of the Seas
• Independence of the Seas
• Liberty of the Seas
• Mariner of the Seas
• Rhapsody of the Seas

Something else new for these itineraries are stops at Grand Bahama Island, which points to Royal Caribbean's port project in Freeport, Bahamas.

Royal Caribbean is in talks to purchase the Grand Lucayan resort, although those plans are currently stalled as the terms of the agreement have changed due to the global health crisis.

Assuming it does go through, Freeport could be transformed to offer guests a variety of experiences.

The original plans called for a first phase to be a world-class beachfront destination with a 526-room hotel, shopping village, spa and wellness center, water-based family entertainment including a massive water and adventure theme park, a 40,000-square-foot convention center, adventure activities such as zip lines and off-roading, restaurants and bars, entertainment and lively nightlife.

Royal Caribbean and the ITM Group have proposed a revised deal/plan to purchase the Grand Lucayan Resort and redevelopment of Freeport Harbour. 

The release of the Summer 2022 - Winter 2023 Short Caribbean cruises is the third deployment to be released this winter, following Northeast and China & Hawaii sailings a few weeks ago.

Over the next few weeks, more sailings will be released for the 2022-2023 season, although changes to the deployment schedule are possible.

Planning on booking a 2022 cruise? These stories will help:

• Is it worth it to book a short 3-night cruise?
• Do's & Don'ts of Perfect Day at CocoCay
• What was added to each Royal Caribbean ship during its Royal Amplified refurbishment
• Which is the best Royal Caribbean cruise ship?

Royal Caribbean Group announced it lost $1.4 billion in the fourth quarter of 2020, but its stock price jumped up by 9% and perplexed quite a few people.

How could a company that loses so much money get investors to want to buy that stock?

Many cruise fans openly wondered how this could be the case.

On the RoyalCaribbeanBlog Facebook page, a few readers were curious why Royal Caribbean's stock shot up following the announcement of the loss.

Frank Vogt wrote, "And yet their stock is up $7.88 today...I'm happy but just don't understand why it keeps going up."

Profits and losses aren't everything

The reason Royal Caribbean's stock went up after posting a big loss is a reflection of how the stock market works, and what investors look for in any company.

Dan Kline, lead advisor/host of 7investing Now, explained why stocks do not always go the way you might think based on quarterly results, "Stocks don’t always behave logically after earnings.

"Apple, for example, posted an amazing quarter and its share price went down. In the longer-term, it will go up."

Investors consider a wide range of variables and benchmarks when looking at any stock. Given the information they have access to, investors might make certain estimates on what seems reasonable and/or likely for that company to achieve.

They not only consider the profits and losses now, but also the long-term future of the stock.

Generally, analysts predict a company's earnings per share (EPS) and revenue numbers for the quarter, fiscal year, and future fiscal years.

What did Royal Caribbean do right?

Mr. Kline explains why Royal Caribbean's stock jumped, despite the loss."In the case of RCL, the loss was expected but the picture going forward looks optimistic. People are buying shares based on that optimism."

"This remains a very risky play as lots of things could prevent a return to cruising. I own some RCL and some CCL, but they are less than 2% of my portfolio combined."

Helping Royal Caribbean's cause was a bullish call with investors, where cruise line executives provided encouraging news and a positive outlook on where things are going.

Read more: Royal Caribbean talks vaccine impact, Cruises to Europe in 2021, Cuba and more

Specifically, Royal Caribbean pointed to strong demand for cruises in 2021 and 2022, as well as imminent progress being made with the U.S. Center for Disease Control (CDC) which could lead to test cruises starting.

The amount of cruises booked for the second half of 2021, as well as 2022, was a good start.  On top of that, executives said bookings are higher than 2019 both including and excluding the dilutive impact of future cruise credits.

Mr. Kline added the company's comments gave him more confidence in the direction Royal Caribbean is going, "I think that I'm confident that RCl won't go bankrupt after what their CEO said."

"They have significant cash on hand and booking trends ae encouraging. I'm surprised that Richard Fain went out of the way to say that it had future bookings from a fair amount of new customers. I would have expected mostly returning regulars like me."

"It's still a lot of risk, but it does seem like a comeback is more possible, even likely, than it was even a few weeks ago and investors are picking that up. This is a very long-term investment, however, as the financial hole is deep."

As the cruise industry inches ever closer to restarting operations, the U.S. Centers for Disease Control and Prevention has asked Royal Caribbean to share some of its safety technology, a cruise line executive revealed Monday.

On a Royal Caribbean Group earnings call, Michael Bayley, president and CEO of Royal Caribbean International, said the CDC has asked the line to share the technology behind two new tools on which it is heavily relying during Quantum of the Seas voyages, which resumed from Singapore on December 1, 2020, with no port calls.

"...that technology development is really, we think, groundbreaking and very sophisticated," Bayley said. "And in our conversations that we had the week before last with the CDC, they specifically asked us to share that technology and what we've been doing in Singapore with them, which we've subsequently done."

"There are two technologies that have come from Quantum that really are game-changing. One is the e-mustering, which completely transforms the whole process of lifeboat mustering," Bayley explained.

Muster 2.0 -- otherwise known as "e-mustering" -- is a system that helps to keep large groups of passengers from congregating for what, previously, was an in-person safety drill prior to sailaway on each cruise.

Now, passengers can simply watch safety briefings via a cell phone app or their in-cabin televisions. They will have a four-hour window in which to do so and then report, in person, to a designated area where a crew member will verify completion.

Read more: Top 10 questions about Royal Caribbean's new Muster 2.0

Bayley then discussed a second innovation used on Quantum of the Seas -- contact tracing.

"The second is, we've really developed technology for contact tracing, using a combination of technologies. One of them is a Tracelet, which basically each guest wears, and you can tell exactly how long they've been in contact with everybody else who's wearing a Tracelet.

"Then, we have artificial intelligence connected into basically CCTV cameras that use facial and body recognition to then double check and verify contact tracing in the event that somebody did have covid onboard the ship."

Although Royal Caribbean filed a patent for Muster 2.0 in 2019, months before the pandemic was declared, the Traclet's patent was filed in October 2020 as a means to help track covid cases onboard.

Read more: How cruising changed on Royal Caribbean's first cruise back

Similar to Royal Caribbean's WOWBands, Tracelets are made of silicone. The latter use tracking technology to determine who came in contact with any person found to test positive for covid during a sailing. This information allows proper action to be taken in terms of isolating and quarantining to avoid further spread.

Royal Caribbean's new rules state the following:

"Contact tracing is an important part of our enhanced protocols to keep all our guests and crew safe. Each guest will be provided with a wearable device that allows rapid tracing in the event it is necessary. If you have found to have come within 6 feet of a covid-positive person, for at least 15 minutes, certain actions may be required for your safety and the safety of your fellow guests."

Currently, cruise lines are implementing a slew of new protocols in line with the CDC's conditional sail framework. They include improved air filtration systems and cleaning procedures, as well as plans for isolating, quarantining and disembarking ill passengers if necessary.

In order to test these protocols, cruise ships will soon be required to undergo test sailings with volunteer passengers. If all goes well, each vessel would then be required to receive authorization from the CDC in order to resume revenue voyages.

There is a new photo of Royal Caribbean's next new cruise ship for all of us to enjoy.

The Meyer Werft shipyard shared a new webcam photo of Royal Caribbean's next new cruise ship, Odyssey of the Seas.

There was a flurry of activity over the weekend as the ship was moved away from the pier, and her lifeboats were tested. 

This is likely a sign that Odyssey of the Seas is being prepared for her journey down the Ems River, which is known as her conveyance.

Read more: Odyssey of the Seas should begin her conveyance soon

The movement of Odyssey of the Seas away from the pier also gave cruise ship photographer Björn Haß the opportunity to give us a closer look at some of the ship's signature features.

Photos by Björn Haß

After her conveyance, the ship will conduct sea trials.

Odyssey of the Seas will be among the largest cruise ships in the world when she launches, but she will not claim the title of the largest.

The 169,000 GT cruise liner has an overall length of 347.1 meters, is 41.4 meters wide and can accommodate more than 5000 passengers.

This means she is smaller than the Oasis Class cruise ships, which currently hold the title for the largest in the world.

Read more: What Is the Biggest Royal Caribbean ship?

Royal Caribbean Group confirmed in its business update yesterday that Odyssey of the Seas will be delivered in the first quarter of 2021, although no specific date has been announced.

Due to the global health crisis, it is likely the handover ceremony will be a virtual one. Royal Caribbean Group held a virtual delivery of Celebrity Apex when it was delivered.

More information: 

• 5 plans Royal Caribbean will and won’t be able to do in 2021
• Beautiful photos of Royal Caribbean's next new cruise ship
• New show announced for Royal Caribbean's Odyssey of the Seas

The one dominant question in the cruise industry is when will cruise ships be able to sail again.

Royal Caribbean Group Chairman and CEO Richard Fain spoke to CNBC following his company's fourth quarter 2020 earnings call about a variety of topics, but when cruises might restart was the primary concern.

While Royal Caribbean Group reported another billion dollar loss, they were quite pleased with strong demand for cruises in the second half of 2021 and into 2022.

CNBC Global Markets Reporter Seema Mody put it bluntly when she said, "all the demand in the world is no help. Richard, if the industry is not given the clearance from the CDC."

Mr. Fain pointed to restarting cruises will take a lot, and both the cruise industry and the CDC are looking at a variety of factors before cruises can restart.

"We just we're in the midst of a huge surge...over the end of last year," Mr. Fain explained. "Nobody was going to suggest that we start operating in that kind of environment."

"But as that's coming down, as the numbers get better, as the prevalence in society gets better, as the vaccine gets out there more, I think that's when we can start having serious conversations to restart."

Read more: Royal Caribbean expecting CDC's technical instructions "any day"

So where is that point, exactly?

Mr. Fain said there is no single percentage or data point to look for, "I think the CDC, and we ourselves and our healthy sales panel, would say no one statistic is the determining factor."

"Unfortunately, there's no one magic threshold that says, 'now is the day. If we reach this point, we can go.'"

Read more: Royal Caribbean talks vaccine impact, Cruises to Europe in 2021, Cuba and more

Passengers worst fear: infection or isolated?

Richard Fain also talked about the distinction between passengers fearing getting infected versus being stuck on a cruise ship as the result of a case.

"People aren't so much worried about getting sick on a ship, they're worried that somebody else gets sick and that that destroys their whole vacation.

"That's why the protocols that we've come up with, a big focus of them, is how do we isolate cases when we have a case because there will be cases on the ship just as there are always cases in society. Our job is to make sure that it stays cases and doesn't become an outbreak."

"That's a lot of our discussion with the with the CDC and others, and that the vaccines are a big part of that."

Can Royal Caribbean borrow even more money?

Seema Mody ended the interview by asking Richard Fain does Royal Caribbean have more resources to borrow if the shutdown continues.

"We have a quiver of things full of actions we could take if we needed."

"We have been methodical about this and always looking fairly far out so that we're not dealing with an imminent issue. We always want to be dealing with if something goes wrong, we have time to fix it."

"And in this case, we've built up enough of our liquidity. We've built up enough of our ammunition so that we have the luxury of not having to deal with the crisis, but to gradually improve our liquidity, our financial health, because we want to get back to investment grade as quickly as we can."

Royal Caribbean held an hour long meeting with Wall Street investors that touched on topics ranging from what the vaccine rollout is doing to help bookings and protocols, booking trends, Cuba cruises and much more.

Financial analysts asked Royal Caribbean Group executives a myriad of questions surrounding their near- and long-term futures that provided interesting insight into what they are seeing and expecting right now.

Here is a breakdown of some of the most interesting anecdotes to come out of the call.

Cruising in a vaccine world

One major change since the last earnings call with investors is the role of the Covid vaccine.  It has gone from theoretical to beginning widespread distribution, and it has fundamentally changed how Royal Caribbean and governments seen cruise ships restarting.

When Royal Caribbean Group produced their 74 recommendations for cruise ships to restart sailings safely, it was crafted without vaccines in mind, but the world is changing.

Royal Caribbean Group Chairman and CEO Richard Fain sees early 2021 as an interim period, where the vaccines are still relatively new.

"They're coming out amazingly quickly, but it still is going to take months to get huge numbers of people vaccinated."

Neither the cruise lines or governments have answers yet on how effective the vaccines are, and what effect they will have on the populous, but Mr. Fain is optimistic based on the results of Israel, where a speedy rollout has spurred a quick return to normalcy.

"We think that the vaccine is, of course, the ultimate weapon and the fact that it is coming out and beginning to come out so quickly and that the pace of that is growing will be a basis for a new set of of approaches."

Mr. Fain admitted no one knows yet what those new vaccine-bolstered protocols will look like.

Read more: Royal Caribbean adds COVID-19 into cruise contract for all passengers

What will cruises in Europe be like 2021?

A lot of attention has been placed with the CDC and cruise lines in North America, but what about cruises to Europe where American regulations do not apply?

Royal Caribbean International President and CEO Michael Bayley confirmed that while their sailings in Europe are not subject to the CDC jurisdiction, he believes they will be guided by the protocols coming from either the Healthy Sail Panel, European Union, or U.K.

"We know that the operations in some of the European countries, particularly Germany, Italy, have been ongoing for the past couple of month... and those protocols that have government operations have basically been based on the Healthy Sail Panel or the CLIA member policies, and then overlaid with specific instructions by the National Health Authority."

"I think what we're going to see is very similar to what we're going to see in the United States, which is as we continue to see infections decline and vaccines increase, then we're going to move to protocols that probably are some kind of hybrid between vaccines and testing."

"We imagine that they'll be very similar to the guidelines that we'll get from the CDC."

Read more: Royal Caribbean expecting CDC's technical instructions "any day"

Correlation between vaccine distributions & new bookings

Perhaps nothing has been more beneficial to Royal Caribbean's bottom line or overall morale than the rollout of Covid vaccines.

Mr. Bayley noted almost as soon as vaccines got approval, bookings jumped, "One of the things that we've seen really after we came out of the holidays early in January, is a proportional increase in the number of guests booking who were 65 plus, and that is continue to increase."

"Our belief is, is that 65 plus are getting vaccinated, then they're obviously becoming more comfortable with booking, and we're seeing that very much in our bookings from about January forward."

"As the vaccine spreads down into the population by age, we'll see that probably accelerate."

Royal Caribbean Group Chief Financial Officer Jason Liberty added that while experienced cruisers have been the backbone for bookings since the shutdown, there has been more recently an increase in new cruisers booking around the same timeframe Mr. Bayely talked about.

"As the vaccines are being rolled out, we're seeing that there's a pretty strong relationship to booking volumes and and vaccines."

"What we have seen more recently, though, it's not back to where it was pretty Covid, there has been an increase in first two crews coming back into the space."

"It's also building confidence that we're getting closer to the other side of this and people are beginning to realize that that travel should be here sooner rather than later."

98% of crew members in favor of getting vaccinated

Royal Caribbean recently announced it plans to get all of its crew members vaccinated, and that has overwhelmingly been met with positivity by the crew.

Mr. Bayley said Royal Caribbean sent out a survey to all of their crew members last week, which totals around 70,000 employees.

Of the 32,000 responses they got within 12 hours, 98% of all of the crew who responded they were in favor of being required to get the Covid vaccine in order to work.

"We also learned that over 4000 of our crew have already been vaccinated at home."

"I think we are very encouraged by the results."

Read more: It looks like Royal Caribbean will vaccinate its crew members

There is at least one ship that can still go to Cuba

As soon as Royal Caribbean announced Majesty of the Seas and Empress of the Seas would be sold, there was immediate concern there would not be a ship capable of going to Cuba if that ever re-opened.

Michael Bayley was equally concerned when the news came there was a buyer.

"We do have a ship, ships, that will fit into into Cuba if that should come back."

He did not specify which vessel that was.

Read more: Royal Caribbean sold two smaller cruise ships with enormous legacies

Will they sell more cruise ships?

Could Royal Caribbean sell more cruise ships? It depends on the opportunity.

Jason Liberty said Royal Caribbean will remain "opportunistic".

"I think we need to remember that pre-pandemic, all of these ships generated quite a bit of cash flow."

"For us typically to test on on a ship is a little bit less about the cash that we would receive; It's more strategic on whether we think this ship, whether it's in its current state or through some moderate investment, fits our brands."

Cruise lines could finally get the critical information they need from the U.S. Center for Disease Control Control (CDC) to get test cruises going.

During Royal Caribbean Group's fourth quarter 2020 earnings call with investors, Royal Caribbean International President and CEO Michael Bayley gave an update on where things stand with the CDC.

Mr. Bayley said that Royal Caribbean has been in "regular communication" with the CDC and expects to get technical instructions on what each ship needs to do in order to prepare itself for test cruises.

"We're literally expecting the technical specifications any day soon," Mr. Bayley told investors.

When the CDC lifted the No Sail Order at the end of October and replaced it with the Framework for Conditional Sail Order, the CDC outlined a series of steps required for cruises to be able to progress towards restarting.

Cruise lines are still waiting for those instructions.

Read more: Everything you need to know about Royal Caribbean test cruises

"It's an intergovernmental process between several agencies within the government that are reviewing the technical specifications."

"But they've assured us as soon as all of these things come together, they want to get us back into operations. So we're just literally waiting."

With dropping infection rates, Royal Caribbean sees higher optimism for test cruises to begin.

"We're waiting and, you know, hopefully we'll get them soon and we can we can start a trial sailings."

The fact all cruise lines are still waiting for technical instructions from the CDC came up in January when Carnival Corp. CEO Arnold Donald told investors during an earnings call that they were still waiting on additional guidelines from the CDC for future phases.

In early February, the CDC confirmed to RoyalCaribbeanBlog that the agency had still not delivered those instructions to cruise lines, but was coming soon.

"We anticipate the next phase of technical instructions (Technical Instructions for Port and Local Health Authorities Agreements) to be released in the next few weeks."

Working with the CDC

The nature of Royal Caribbean's relationship with the CDC also came up during the call, as many in the public point out the different approach the CDC has taken with cruise lines versus other sectors of travel.

Mr. Bayley characterized the discussions with the CDC as "productive".

"They're dealing with an incredibly challenging situation and environment."

"They've assured us on several occasions that when these indicators really start to move in a very positive way, then they'll start working with us to get us back into operation. And that's exactly what we're seeing now."

"My sense is, is that we're getting closer and closer to good news."

In terms of getting a sense of what the CDC or cruise lines are looking for in these statistics, there are still unknowns, but Royal Caribbean Group Chairman and CEO Richard Fain pointed to factors such as how quickly the vaccine continues to roll out, or how the Covid variants will affect numbers going forward.

"I think it's premature for them, or for us, to try and speculate on what threshold the number has to be, because it's so many variables."

"I think we're more encouraged to see the really dramatic drop that we've been experiencing and the really nice roll out, particularly in the United States, in the U.K., in the in the vaccine."

Royal Caribbean Group released its fourth quarter and full year 2020 financial results, along with an update on its business operations.

All cruise lines have been ravaged by the effects of the industry shutdown, and Royal Caribbean Group is no exception.

For the full year, Royal Caribbean Group reported US GAAP Net Loss of $(5.8) billion or $(27.05) per share compared to US GAAP Net Income of $1.9 billion or $8.95 per share in the prior year. Royal Caribbean Group also reported Adjusted Net Loss of $(3.9) billion or $(18.31) per share for full year 2020 compared to Adjusted Net Income of $2.0 billion or $9.54 per share in the prior year.

In the fourth quarter 2020, Royal Caribbean group has a US GAAP Net Loss $(1.4) billion or $(6.09) per share and Adjusted Net Loss was $(1.1) billion or $(5.02) per share. 

"These results reflect the staggering impact that the pandemic brought to our Company and the whole industry during 2020," said Jason T. Liberty, executive vice president and CFO.

"The COVID-19 pandemic is having a painful and profound impact on our world and our business; unquestionably, this crisis is the most difficult in the Company's history. But we have been impressed and grateful for the resourcefulness and agility of our team in responding to these unprecedented challenges. More importantly, we remain confident about the ability of our Company to recover and return to the positive trajectory we were on previously," said Richard D. Fain, Chairman and CEO. "We are encouraged to see the sharp decline in cases and the growing availability of vaccines. We can't wait to get back to the business of showing people the world and making great memories."

Working towards a restart

While much of their operations remain shutdown, Royal Caribbean Group is still working towards getting back into service.

The cruise line said it is working to meet the requirements of the Framework for Conditional Sailing Order issued by the U.S. Centers for Disease Control and Prevention (CDC) for US sailings, but obstacles remain.

Specifically, Royal Caribbean Group called out the "many uncertainties" that remain regarding the specifics of the plan.  This seems to echo Carnival Corporation's comments that they are still waiting on basic instruction from the CDC on how to proceed.

Read more: What are the chances my cruise will sail?

In addition, the timing and cost of implementing the CDC's requirements remains in question.

Nonetheless, Royal Caribbean Group expects to re-start its global cruise operation in a phased manner with the initial cruises having reduced guest occupancy, modified itineraries and enhanced health and safety protocols.

Read more: Is there a pattern to when Royal Caribbean cancels cruises?

Financial state

In 2020, Royal Caribbean Group raised approximately $9.3 billion of new capital through a combination of bond issuances, common stock public offerings and other loan facilities.

As of December 31, 2020, the Company had liquidity of approximately $4.4 billion, including $3.7 billion in cash and cash equivalents and a $0.7 billion commitment from a 364-day facility

The current cash burn is, on average, in the range of approximately $250 million to $290 million per month during a prolonged suspension of operations.

This range includes all interest expenses, ongoing ship operating expenses, administrative expenses, hedging costs, expected necessary capital expenditures (net of committed financings in the case of newbuilds) and excludes changes in customer deposits, commissions, principal repayments, and fees and collateral postings related to financing and hedging activities. 

Once ships begin to move to restart operations, that spend will increase as it brings the ships out of their various levels of layup, returns the crew to the vessels, takes the necessary steps to ensure compliance with the recommended protocols and gears up its sales and marketing activities.

New ships

A few new ships are still "on the books" for Royal Caribbean Group, with financing committed to it.

Odyssey of the Seas and Silver Dawn should be delivered during the first and fourth quarters of 2021, respectively.

Read more: Odyssey of the Seas should begin her conveyance soon

Wonder of the Seas and Celebrity Beyond both have their financing committed for 2022.

Excluding the newbuild deliveries, the capital expenditures for 2022 will depend on the Company's schedule to return to service.

Cruise bookings update

The good news is bookings for cruises in the second half of 2021 are "aligned with the Company's anticipated resumption of cruising."

In fact, pricing for 2021 bookings is higher than 2019.

Cumulative advance bookings for the first half of 2022 are within historical ranges and at higher prices. Royal Caribbean believes this highlights a strong long-term demand for cruising.

Since the last quarter, approximately 75% of bookings made for 2021 are new and 25% are due to the redemption of FCCs and the "Lift & Shift" program. 

As of December 31,2020, the Company had $1.8 billion in customer deposits of which 50% are related to FCCs. Since the suspension of operations, approximately 53% of the guests booked on cancelled sailings have requested cash refunds.