Royal Caribbean Cruises Chairman offers update on the state of cruise business

In:
25 Mar 2020
By: 
Matt Hochberg

Royal Caribbean Cruises Ltd. Chairman and CEO Richard Fain has shared another video speaking to travel professionals on the current state of the cruise industry while in the midst of a prolonged shutdown.

Speaking from his backyard, Mr. Fain filmed his message with his phone on an iPad, dressed more casually, and offering words of encouragement. 

His message comes less than a day after Royal Caribbean announced it would extend its global suspension of cruises for an additional 30 days.

"We all came to work in January ready for a truly gangbuster year, and look where we are today. But even against that very serious backdrop, the work goes on here in Royal Caribbean."

"Our immediate focus is on keeping our guests and our employees safe and healthy, even while the last few ships are returning to port. But you should also know that we're putting just as much effort and just as much focus into making sure that from the day we begin sailing again - and it won't be that long before we do - we're able to offer our guests safe, healthy, and enjoyable cruises from day one."

Mr. Fain explained he believes lots of people will want a vacation escape once the current crisis improves, and Royal Caribbean has "teams studying to make sure that health and sanitation procedures are best in class and make use of the hard lessons we've learned over these last few months."

This is one of many videos Mr. Fain has recorded in the last few weeks that offer comfort, inspiration and a dash of humor.

Mr. Fain also touted the fact Odyssey of the Seas is coming, which is Royal Caribbean's next new cruise ship and set to debut in November.

"Better days may seem far away right now, but they're coming sooner than you think."

Freedom of the Seas Amplification Review on Royal Caribbean Blog Podcast

In:
25 Mar 2020
By: 
Matt Hochberg

Our newest podcast episode is out to help give you a quick "audio escape" to a Royal Caribbean cruise!

Episode 347 is available for downloading, which has a review of the Royal Amplification to Freedom of the Seas.

Don from EatSleepCruise joins Matt on this week's episode to talk about the changes made to Freedom of the Seas, as well as his sailing onboard that was extended by a couple days.

Here’s the podcast page for Episode 347. And don’t forget to subscribe to the podcast via RSSStitcher or on iTunes!

Take a listen and as always, let us know what you think! Please rate and review the podcast on iTunes and leave your comments below!

Royal Caribbean offers 125% credit towards Cruise Planner purchases on cancelled sailings

In:
25 Mar 2020
By: 
Matt Hochberg

If you pre-purchased drink packages, spa treatments or anything else on Royal Caribbean's Cruise Planner site and now your cruise is cancelled, Royal Caribbean will give you the option of onboard credit in the value of 125% of the total Cruise Planner purchases on your reservation.

This new option is only for cruises cancelled between April 11 and May 11. Royal Caribbean is now giving guests the choice to get a 100% refund of pre-purchased add-ons or 125% value in onboard credit. This is in addition to the offer of a 100% refund on the cruise fare or 125% future cruise credit.

Guests have until April 8, 2020 to pick between the two options.  

If you do want to take advantage of the 125% onboard credit offer, you can use a self-service form to process the request.

If you do not fill out that form on or before April 8, all Cruise Planner purchases will be automatically refunded.

In the first 30 days of cancelled cruises, Royal Caribbean did not offer this onboard credit for Cruise Planner purchases.

Royal Caribbean extends suspension of cruises an additional 30 days due to coronavirus

In:
24 Mar 2020
By: 
Matt Hochberg

Royal Caribbean announced it has extended its voluntary suspension of cruises an additional 30 days due to coronavirus.

The cruise line had cancelled all sailings through April 10, and will now cancel all cruises through May 11, 2020.  

Royal Caribbean expects to return to service on May 12, 2020.

We are working with our guests to address this disruption to their vacations, and we are genuinely sorry for their inconvenience. We are also working with our crew to sort out the issues this decision presents for them.

In addition, due to port closures around the world, Royal Caribbean added they expect to return to service for Alaska, Canada and New England sailings July 1, 2020.

Like the previous 30 days of cancelled sailings, guests impacted by this round of cancellations can choose between a 100% refund or 125% Future Cruise Credit. Future Cruise Credits will be automatically issued on April 30, 2020.

Any pre-purchased amenities and packages, such as internet, beverage, dining or RoyalUp upgrades, will be automatically refunded. Royal Caribbean Travel Protection will also be refunded.

The global outbreak of coronavirus has impacted all sectors of travel, and all cruise lines have had to put further sailings on hold. Royal Caribbean had announced just a pause for 30 days, while some cruise lines opted to delay resuming sailings for a longer period of time. MSC Cruises paused for 45 days and Viking Cruises opted to wait until May 1, 2020.

UPDATE 6:04PM: Voyager of the Seas in Singapore is scheduled to return to service in June 2020.

More resources:

5 ways Royal Caribbean's Odyssey of the Seas will be different from other Quantum Class ships

In:
24 Mar 2020
By: 
Matt Hochberg

Odyssey of the Seas will be Royal Caribbean second Quantum Ultra Class ship when she debuts in November 2020, and she already promises to offer a number of firsts for guests to enjoy.

The days of subsequent cruise ships in a class being carbon copies of the ships that came before them are gone, and when Royal Caribbean builds a new ship, it starts with a blank canvas to bring new ideas, enhance existing venues, and spice up everything else along the way.

While we do not know quite everything yet about Odyssey of the Seas, here are five ways Odyssey will be different from any other Quantum (Ultra) class ship that came before her!

First Quantum Class ship with Giovanni’s Italian Kitchen & Wine Bar

Odyssey of the Seas will be the first Quantum Class ship to offer guests Giovanni’s Italian Kitchen & Wine Bar. 

Not only is this the first Quantum Class ship not to offer Jamie's Italian, it also will be one of the first ships in the fleet to offer Royal Caribbean's refreshed look at Giovanni's Table.

Royal Caribbean promises pizza, cured meats and specialty cheeses, as well as an impressive selection of wines and limoncellos. 

Playmakers in the SeaPlex

The addition of Playmakers Sports Bar & Arcade to Odyssey of the Seas is a first for the Quantum Class, but Royal Caribbean went above and beyond by moving it to the SeaPlex.

Located on the second floor of the SeaPlex, Playmakers will serve up the beers, wings, sliders and burgers it is known for, while giving guests a choice of watching the action below them in the SeaPlex, or catching a game on one of the many televisions throughout the bar.

On other ships, Playmakers has been located either on the Royal Promenade or Boardwalk. With views of the ocean on one side, and the SeaPlex fun on the other, I think this Playmakers location may be the best one yet.

Revamped Adventure Ocean

Odyssey of the Seas will usher in the cruise line's new take on supervised fun for kids with the new Adventure Ocean club.

Adventure Ocean has been completely revamped, and was first offered on Navigator, Oasis and Freedom of the Seas.  

Children and their families can choose their own immersive adventures and discover whimsical rooms with climbable creations at Play Place; hands-on art, science and tech fun at Workshop; friendly competition in physical, interactive games at Arena; and make new friends over gaming consoles or while just sitting back in Hangout.

Younger children (ages 3-5 years old) have their own space and will benefit from experiential activities at the multipurpose AO Junior area.

Just like other Quantum Class ships, babies and toddlers will have access to AO Babies.

Royal Caribbean has also redesigned its teen club concept with Social180. Located just outside the SeaPlex, the new teens-only area features gaming consoles, music and movies in their own lounge or out on the private patio.

Two-level pool deck

I think families are going to love the new approach to the pool deck with the two resort-style pools and four whirlpools.

Odyssey of the Seas will feature two open-air, resort style pools that are surrounded by casitas and hammocks. This new pool deck concept has been a hit on other recently Amplified cruise ships, and it promises much more pool deck space than on other Quantum Class vessels.

In addition, you can expect Splashaway Bay aqua park for kids to enjoy waterslides, fountains, water cannons and more. Adults can escape to the Solarium that has swimming pools and whirlpools, a full-service bar, daybeds and hidden nooks for prime napping.

The Lime and Coconut will make its Quantum Class debut next to the pool with two stories of drinks and island vibes. If you get hungry, the first El Loco Fresh on a Quantum Class ship is available.

More to come

There are still more surprises to come with Odyssey of the Seas, including entertainment.

Nick Weir is the Senior Vice President of Entertainment for Royal Caribbean International, and he has hinted at some big shows and fun coming to Odyssey of the Seas. 

Mr. Weir has said Odyssey will feature the biggest drone project ever onboard, as well as brand new productions.  Needless to say, these new shows will be brand new to the fleet.

Coming soon in November

In November 2020, the ship’s inaugural year will kick off with 8- and 6-night itineraries from Fort Lauderdale, FL. Odyssey will then sail to her homeport of Rome in May 2021 and become the first Quantum Ultra Class ship to cruise Europe for the summer. 

More Odyssey of the Seas info

Will Royal Caribbean offer big discounts after cruises resume?

In:
24 Mar 2020
By: 
Matt Hochberg

Among the many unanswered questions RoyalCaribbeanBlog readers have had over the last couple of weeks, it has been "will Royal Caribbean cruise prices go up to make up for lost income?" and "will Royal Caribbean cruise prices have lots of discounts after they start cruising again?".

The impact of the voluntary suspension of cruises is only starting to be felt by the company, with concerns more sailings could be canceled as well. Needless to say, things are far from ideal for Royal Caribbean and they have a lot of tough choices ahead of them.

If you are also wondering what to expect, there is some compelling anecdotal evidence to consider.

Market impact

Perhaps the most noticeable way to gauge Royal Caribbean's plight in recent weeks has been to watch its stock price.  

Like the entire travel sector, Royal Caribbean's stock price has lost a tremendous amount of value in a very short time. Shares were trading at $28.19 when the market opened on March 24. That's down from a 52-week high of $135.32.

The cruise line has been fighting tooth and nail to reduce the impact of the shut down, as well as restore confidence and financial balance to their operations. They increased credit capacity, took out a $2 billion loan, and reduced 2021 capital expenditures and operating expenses.

On the bright side, Royal Caribbean's business was booming before everything changed. Royal Caribbean Cruises had about a $2 billion profit in 2019, and things looked promising for an even better 2020.

The damage, however, is done and it may take years for their share price to recover.

The Motley Fool characterized their stock outlook as:

"It's not pretty but Royal Caribbean can survive a lost quarter of revenue and, eventually, it can return to being profitable. It may have to put off building some new ships and it's certainly going to have to offer discounts to casual customers (and very good deals or comps to regulars) but the company will come through this."

Getting people back

Even if someone snapped their fingers and every cruise in 2020 that has not been cancelled goes forward, 2020 will be a down year in terms of annual passenger count. But there is no doubt when cruising returns, Royal Caribbean will work diligently to get passengers back onboard.

Barron's took a look at Royal Caribbean's position and estimates things will bounce back in the next two years, but that does not mean it will be an easy road.

I assume that in 2021 and 2022, the company will recover close to historical passenger counts, but negative sentiment will still linger, resulting in a below-100% average occupancy. 

The other major factor working against travel is a recession. When times are good, people spend money more freely, but when they feel the pinch, consumers cut back. Nonessentials, like vacations, go out the window for many folks.

A piece written by Bill McGilton for Daily Wealth compared what happened to Royal Caribbean back in 2009 during the Great Recession, and the cruise line strategy back then was to offer deep discounts to get people onboard, and make up the revenue with onboard spending.

During the last recession, a seven-day cruise to Alaska (normally more than $2,000 per person) was going for $499 per person on Holland America and $399 per person on Carnival. A four-day trip from Miami to the Bahamas (normally around $1,000 per person) was going for $200 per person on Norwegian Cruise Lines.

Once the passengers are onboard, the cruise lines nickel-and-dime them with extras like alcohol, specialty restaurants, and gambling. On paper, it sounds like a decent strategy. After all, cruise lines generate almost a third of their sales from onboard spending. And the deals are fantastic for the customers. But it doesn't work.

Even with these massive 75% to 80% booking discounts, onboard traffic fell at least 25% across the industry in 2009. Royal Caribbean's sales fell 10%. That might not sound like much, but it only takes a small decrease in sales to crush its profits... Sure enough, profits fell 75% in that same year.

Concerning ourselves with the consumer side of things, deep discounts for cruise fares in an economic downtown similar to the one we are experiencing in 2020 is a strategy we may very well see coming our way.

Dr Christopher Muller, a senior professor at Boston University’s school of hospitality administration, told The Guardian that he believes the cruise industry will bounce back from all of this as well, and also pinned the industry's rebound on pricing.

“The logical thing is they will have to have very deep discounts, and those deep discounts will be especially present in the next cycle of cruise seasonality in September,” he said.

“By August and September the consuming public will be enticed to go back on cruises because the pricing is going to be outrageously good with enormous discounts.”

Not out of the woods yet

Of course, we are still knee-deep in a cruise shutdown, the markets are anything but consistent, and consumers are not sure what they will be doing tomorrow, let alone this summer.

One the one hand, some people will be quite eager to get out of their homes and put all of this in the rearview mirror as they drive to the cruise port.  On the other hand, others may not be rushing to get back onboard so quickly.

Ultimately, we will have to wait and see if Royal Caribbean does offer discounts across the board, special promotions, or just targeted offers to bouy specific sailings.

Your Thoughts

Do you think Royal Caribbean's prices will rise or fall once cruises resume? Are you anticipating deep discounts on hotels, cruise fare, or airfare? Will you be ready to pounce on deals–or will you wait for a full economic bounceback? Share your thoughts with everyone in the comments!

Video: Are you an old school cruiser?

In:
24 Mar 2020
By: 
Matt Hochberg

Everyone cruises differently, but there are some people that prefer the traditions of cruising, and we tend to call them "old school".  Are you one of those people? Today's video will help sort that out for you!

Big ships or small ships? Water slides or card rooms? Sea days or port days? Formal night or no dress code? These are the sort of things that will determine just how "old school" you really are.

And if you love this video, there’s plenty more for you to enjoy over on our Royal Caribbean Blog YouTube Channel!

By the way, have you subscribed yet? Be sure to subscribe to our channel and never miss a single video!

So check out the video and then let us know: Are you a cruise traditionist? Or do you embrace change? 

7 Experts share their advice for traveling after COVID-19

In:
24 Mar 2020
By: 
Matt Hochberg

Whether by cruise ship or airplane or car, so many people relish traveling as a way to see the world, revisit history, and enjoy great food along the way. The outbreak of COVID-19 has changed everything, and travel has been particularly hard hit.

Between the lockdowns, cruise lines suspending operations, and the economy taking a hit, it seemed appropriate to reach out to a few travel experts for what their advice would be given the global impact of this virus.

I contacted seven of the very best cruise experts to ask them what travel advice they would share to anyone who wants to get out there again. Here is what they had to say.

It could take a while

"Be patient. But also be aware that it could be a while. If 30 days from now, the situation around the world is still a mess, the cruise lines could decide to extend the period even longer.

The only people who want the ships to be sailing more than would-be guests is the cruise lines themselves."

- Doug Parker (Host of Cruise Radio)

Be Flexible

"Don't let today's concerns keep you from planning future trips - planning now can also give you something to look forward to while your vacations may otherwise be on hold.  

If you have an upcoming trip you don't think will work out, don't cancel earlier than required by providers' policies; you don't want to cancel a trip you could have taken, plus, if a travel provider decides to cancel, they may offer better terms than you'll get cancelling on your own.  

Above all else, be flexible; as unprecedented as this is to your life, the same is true for businesses."

Billy Hirsch (Cruise Expert, CruiseHabit.com)

Stay up-to-date

"These are unprecedented times across the globe, and certainly for the cruise industry. The best piece of advice right now is to stay up-to-date on the latest policies and updates from your cruise line.

Changes continue to be made daily – and compensation continues to be announced for impacted cruises, so it’s more important than ever to keep in contact with the line, fellow cruisers and/or your travel advisor for the latest updates as they’re made."

- Colleen McDaniel (Editor-in-Chief of Cruise Critic)

Wait it out

"The advice we're sharing with our community right now is to be as patient as possible. Whether that means you're on pins and needles wondering if your late Spring cruise gets cancelled, or booking another cruise in the near future, we're all anxious to have some answers!

But, we think waiting just a few more weeks to see how the remainder of this month pans out before taking action is a good move for most. If you're anxious to book, consider securing a deal on a cruise sailing later in the year, or into 2021. There's much less cancellation risk, and lots of great cabins available."

- Sheri Griffiths (Host of CruiseTipsTV)

Stay safe and stay positive

"It's tough not being able to cruise now and knowing exactly when we can get back out there, but I'm definitely trying to stay positive. We all know this will pass and cruise travel will come back strong. I feel badly for people who might be struggling with income and lack of work at these times, though."

If you are passionate about travel and cruising, it can be of some comfort to start planning for a cruise or trip for later this year (or even next year) so that you have something to look forward to -- while also taking advantage of some great prices and relaxed policies on cancellations for rebooking.

Like most people, I've been already getting a bit of cabin fever as we spend most of our days stuck in the home, but it's helped to be able to look for deals and get excited about planning for some time at sea once this all passes. There is going to be a huge amount of pent-up demand and energy for cruising and travel in general when things get back to normal."

- John Roberts (Travel writer, In The Loop Travel)

There's no rush to decide now

"If you’re thinking of booking a trip for the next few months, my advice there, too, is that there’s no rush. I think pricing is going to come down significantly on close-in departures in the coming months. We haven’t seen crazy deals yet for close-in departures – at least not in a widespread way. But we will. Cruise lines appear to be holding off on the crazy deals until they have a better sense of when they will be able to resume sailing. Once that becomes more clear, I expect some very heavy discounting and value-add promotions on the close-in sailings. They will be desperate to refill the ships.

I would warn people that it may be longer than they think before cruise ships begin sailing again. It’s very hard to say at this point. There are so many variables. But we may be looking at several months, at least, in some regions of the world.

Also, I would recommend that anyone spending a significant amount of money on a future cruise right now pay the extra money to buy a travel insurance policy that includes reimbursement coverage if a travel provider such as a cruise line or airline fails. I’m not saying this is going to happen. But it’s prudent in a time like this to be covered for the worst possible outcome. Not every travel insurance policy covers the collapse of a travel provider. It’s important to read the fine print in a policy before buying it. Generally, the policies sold directly through cruise lines, for instance, do not cover this."

- Gene Sloan, (Senior Reporter, Cruise and Travel at The Points Guy)

Be Patient

"We are in uncharted waters right now, sailing through heavy fog, searching for a glimpse of the lighthouse to lead us out of these unprecedented times. It may be a tough pill to swallow, but this is going to play on as it plays out.

The best advice I can give anyone booked or looking to book a cruise is to be patient. It doesn't matter which cruise line, or ship, the next cruise we each go on is going to be amazing for the simple fact we are back to normalcy in our daily lives."

Scott Sanders (Cruise Expert, DisneyCruiseLineBlog.com)

Kids stuck at home? Check out these Royal Caribbean coloring sheets!

In:
23 Mar 2020
By: 
Matt Hochberg

Kids around the world are at home instead of school due to the worldwide impact of the coronavirus.

As a result, parents are struggling to find activities for kids to keep them occupied, so how about working in Royal Caribbean into that lesson plan?

You can print out these fun coloring sheets and let your children's imaginations run wild.

There are designs with cruise ships, pirates, marine life and more to enjoy.

You can download and print these coloring sheets right here.

Royal Caribbean takes out $2.2 billion loan to protect improve company's position against Coronavirus impact

In:
23 Mar 2020
By: 
Matt Hochberg

Royal Caribbean Cruises Ltd. announced it has entered into a $2.2 billion 364-day secured term loan facility, further enhancing the company's liquidity position.  

The loan comes as cruise lines, and the entire cruise industry, face tremendous challenges due to the worldwide spread of COVID-19.

Royal Caribbean Cruises Ltd. is the parent company of Royal Caribbean International, and operates sister brands Celebrity Cruises, Azamara and Silversea Cruises.

The facility can be extended at the company's option for an additional 364 days.  The company has borrowed the full amount available under the term loan to further bolster its liquidity.

Including this new financing, the company has over $3.6 billion of liquidity comprised of cash deposits and its existing undrawn revolving credit facilities (net of outstanding commercial paper).  

In addition, the company has committed financing for all of its new ships on order.

"This is a period of unprecedented disruption for the cruise industry," said Jason T. Liberty, executive vice president and CFO.  "We continue to take decisive actions to protect the company's financial and liquidity positions as they enable us to keep focused on our guests, our crew and our long-term plans."

Morgan Stanley, J.P. Morgan, Bank of America, BNP Paribas and Goldman Sachs acted as joint lead arrangers and bookrunners on the secured term loan facility.  Morgan Stanley is acting as an Administrative Agent and Collateral Agent on the facility.  Perella Weinberg Partners LP served as financial advisor and Skadden Arps, Slate, Meagher & Flom LLP served as legal advisor to the company in connection with the secured term loan facility.