The U.S. Supreme Court delivered bad news for Royal Caribbean and other cruise lines on Thursday when it overturned a lower court decision regarding ship visits to Cuba.

Four cruise lines are part of an ongoing litigation stemming from when the U.S. briefly allowed travel to Cuba again. This includes Carnival, Norwegian Cruise Line ‌Holdings, Royal Caribbean Cruises and MSC Cruises.

The U.S. company that built the docks prior to the Cuban revolution in 1959 sued the cruise lines because they used confiscated property, which is against the law under the Helms-Burton Act. This law allows U.S. nationals who owned property in Cuba to sue anyone who "traffics in property which was confiscated by the Cuban Government on or after January 1, 1959."

A lower court sided with the cruise lines, but the Supreme Court has set aside that decision.

Now, there are hundreds of millions of dollars at stake with the lawsuit re-opened.

Why the cruise lines are being sued

Cruise lines, like Royal Caribbean, briefly resumed cruises to Cuba when the U.S. government opened up travel to the Communist country.

Those ships all docked and used the terminal at the Havana Docks, which was built in 1905.

When Fidel Castro came to power, he nationalized and expropriated property held by U.S. companies including Havana Docks. They had previous had a 99-year concession for the construction and operation ‌of piers at the port of Havana, granted in ⁠1934 by Cuba's government.

The company was never paid anything by Cuba for the docks. As a result, the Helms-Burton Act gives companies an option to seek restitution.

The act allows companies to sue both the Cuban government and private companies that do business in Cuba.

The four cruise lines visited Cuba between 2016 to 2019 before travel to the island was once again restricted.

The law had been suspended for years by Presidents on both sides of the aisle as a way to avoid disputes with allies and businesses operating inside the Caribbean island. President Donald Trump re-activated the law during his first term.

Court rules against cruise lines

In 2022, a federal judge imposed judgements against each of the four cruise lines of more than $100 million because they had engaged in trafficking by having their ships dock at the terminal.

The Atlanta-based 11th U.S. Circuit Court of Appeals threw out those judgments last year because the concession given to Havana Docks would have technically expired in 2004, more than a decade before the cruise ships made a visit there.

The 11th Circuit wrote at the time, "When that concession expired in 2004, any property interest that Havana ​Docks had by virtue of that concession ended."

The Supreme Court heard arguments ​in the case in February. On Thursday, the Supreme Court set aside that decision in a 8-1 ruling.

Justice Clarence Thomas wrote the majority opinion. Justice Elena Kagan was the only justice to dissent.

"Havana Docks has shown that the cruise lines used confiscated property in which Havana Docks had a property interest and to which it owns a claim,” Justice Clarence Thomas wrote.

To be clear, the Supreme Court's decision doesn't decide the case. Rather, it allows the lawsuit to go forward once again.

In a joint court filing, the companies said it defies common sense that they "should pay hundreds of millions of dollars for following the executive branch's lead in reopening travel to Cuba."

Royal Caribbean held a conference call with investors earlier today to go over its 2019 second quarter earnings, which shed light on a few interesting anecdotes.

Perfect Day at CocoCay is attracting new cruisers, not steal from other lines

If there was one theme of the earnings call, it is that Royal Caribbean has hit a grand slam with its private island makeover earlier this year, Perfect Day at CocoCay.

Richard D. Fain, Chairman and CEO, Royal Caribbean Cruises Ltd. said, "To describe Perfect Day as a home run, wouldn't do it justice. It really resets the bar in the short-cruise market."

"But it's important to note that Perfect Day wasn't designed to steal customers from other cruise lines; it was designed to attract customers who otherwise wouldn't be taking a cruise. And it's doing that beautifully."

Perfect Day at CocoCay is bringing in big returns

In addition to being well-received by cruisers and reviewers alike, Perfect Day at CocoCay is also making a giant impact on the cruise line's bottom line.

Royal Caribbean Cruises Ltd. Chief Financial Officer, Jason Liberty, spoke to this point, "What has been particularly impressive over the past few months is the pricing we are receiving for sailings visiting Perfect Day at CocoCay. Pricing on these sailings has been consistently outpacing our lofty expectations. It has been a major contributor to our improved, non-Cuba revenue outlook."

Royal Caribbean International CEO Michael Bayley said, "In total in '19 and through into '20, eleven of the Royal Caribbean ships will be going to Perfect Day at CocoCay, so you can imagine the volume that we are taking to Perfect Day has gone up by a factor of about four. And we are already taking a lot of guests to CocoCay before we underwent all of this work and changed the whole experience."

"I think today we've taken maybe 350,000 people to Perfect Day since we opened. It's now rated the number one resort globally for Royal Caribbean, and it's knocking it out of the park in terms of truly delivering a phenomenal day. The guest satisfaction is extremely high."

"The demand we are seeing comes from all segments. It competes very well with Orlando. It's got a truly wonderful day, both in thrill and chill. It is also driving new-to-cruise, because approximately 40% of the short market is new-to-cruise."

Sustainability and accountability is important

Mr. Fain provided an update on the cruise line's sustainability efforts, and how well it is following the plan it laid out earlier.

"As most of you know, in 2016, we launched a partnership with the World Wildlife Fund (WWF) to take our sustainability efforts to a new level. At Royal Caribbean, we believe that what gets measured, gets better, and we established specific goals in three areas of sustainability. The three areas where we established these quantifiable goals were the areas of carbon footprint, sustainable destinations, sustainable food production."

"Specifically, we undertook a 35% reduction in carbon footprint of our 2005 base, offering one thousand tours certified to the GSTC sustainability standard, and responsibility to responsibly sourcing 90% of wild-caught seafood globally, 75% of farm seafood in North America and Europe. We set a public goal to reach these objectives by the end of 2020."

"I am happy to report that we are on schedule. We achieved our carbon footprint goal earlier this year, and just two weeks ago, we certified our one thousandth sustainable tour operation. We're not there yet on our sustainable food sourcing goal, but we're walking diligently to do so, and hope to reach that target soon."

Cost of Cuba

Earlier this year, the United States government ended the ability of cruise lines to sail to Cuba and the impact of that policy change was quantified during this call.

Mr. Liberty explained, "The abrupt removal of calls to Cuba on June sailings on Majesty of the Seas and Empress of the Seas costs us 30 basis points in year-over-year yields for the quarter. While the Cuba policy change was financially and operationally painful, our underlying business remains very strong, as we both outperformed on onboard revenue and saw further close-in demand for our core products."

If they could go back in time, Royal Caribbean would have done more

One of the analysts on the call asked Royal Caribbean if they had a "do over" during the last recession, would they have held back as much as they did for ship orders.

Mr. Liberty said bluntly, "There's definitely regret that we have in terms of our pull-back on our growth. We would all be talking about higher earnings numbers today, better return profile today if we hadn't slowed down our growth, or our investment efforts in expanding our global footprint, investing in different projects that would have put us in an even stronger position than we are in today."

In a press release, Royal Caribbean commented on the impact the U.S. government's policy change on travel to Cuba and provided a range for its financial impact.

The company estimates that the financial impact of this regulatory change is a reduction to the Adjusted EPS for 2019 in the range of $0.25 to $0.35 per share.

"While the affected sailings impact only 3 percent of our 2019 capacity, the extremely short notice period for this high yielding destination amplifies the earnings impact," said Jason T. Liberty, executive vice president and CFO. "The result of this policy change has created a short-term impact to our guests, operations and earnings; fortunately, we have many alternative and attractive destinations for our guests to choose from."

On June 4, 2019, the U.S. government announced that effective June 5th, 2019 authorized travel to Cuba under the People-to-People program is rescinded and travel to Cuba via cruise ships is prohibited. Therefore, effective June 5th, cruise ships will no longer be allowed to travel between the U.S. and Cuba.

Royal Caribbean announced today, it will replace all Cuban ports that were scheduled for its ships to visit with alternative ports due to new U.S. government regulations that prohibit travel from the U.S. to Cuba by cruise ship.

The two ships that were offering cruises to Cuba, Majesty of the Seas and Empress of the Seas, have had alternative ports secured.

In addition, Royal Caribbean is offering the option of guests on affected sailings remaining on the cruise and receiving a 50% refund, or they can cancel their cruise and receive a full refund.

Royal Caribbean issued a statement elaborating on the nature of the changes made, "In response to the U.S. government’s policy change imposing immediate restrictions on cruise ship travel between the U.S. and Cuba, we are informing our guests of revised itineraries for a limited number of sailings with Cuban port calls.

All 2019 sailings on the Majesty of the Seas and Empress of the Seas will have alternative ports in the Caribbean.  Guests will have the option to cancel their current booking for a full refund, or to keep their sailing date with a new itinerary and receive a 50 percent refund.

We are working on alternate itineraries for 2020 sailings and will share those details with guests and travel partners as they become available. We appreciate our guests’ patience and flexibility as we adjust to accommodate the new regulation."

(1/3) Cuba Travel Policy Update: Effective immediately, the U.S. government has implemented new regulations that prohibit travel from the U.S. to Cuba by cruise ship. This change requires us to immediately replace all Cuban ports.

— Royal Caribbean (@RoyalCaribbean) June 5, 2019

(2/3) For all 2019 sailings on Majesty of the Seas + Empress of the Seas, we have secured alternative ports and we are in the process of communicating the new itineraries to our guests and travel partners.

— Royal Caribbean (@RoyalCaribbean) June 5, 2019

(3/3) For these guests, they will have the option of remaining on their sailing with the new itinerary and receiving a 50% refund or they may cancel their cruise and receive a full refund. Read more: https://t.co/RAWu9iRg2X

— Royal Caribbean (@RoyalCaribbean) June 5, 2019

Scheduled 2020 sailings on both Majesty of the Seas and Empress of the seas are still in the process of being worked on to find alternative ports, and Royal Caribbean estimates it will communicate those changes within the next week.

The United States Treasury Department announced yesterday new regulations that will end group travel to Cuba for “people to people” educational purposes and prohibiting visits to the island via cruise ships.

The United States Treasury Department today announced new regulations that will end group travel to Cuba for “people to people” educational purposes and prohibiting visits to the island via cruise ships.

According to a new Department of Commerce rule, “private and corporate aircraft, cruise ships, sailboats, fishing boats, and other similar aircraft and vessels generally will be prohibited from going to Cuba.”

Owen Torres, Manager at Royal Caribbean Cruises Ltd. Corporate Communications, issued a statement to RoyalCaribbeanBlog of the short-term impact, "We are aware of the announcement and are analyzing the details to understand the impact on our itineraries.  In the meantime, we are adjusting the itineraries of our June 5 and June 6 sailings, which will no longer stop in Cuba. We are communicating with our guests about those changes.  We will provide other updates as needed."

Royal Caribbean's website was updated at 6pm EST to add, "We are aware of the new U.S. travel restrictions to Cuba and we are analyzing the details to understand the impact to future sailings.  We expect to know more within the next 24 hours and will communicate any changes as soon as we are able.  In the meantime, we are adjusting the itineraries of our June 5 and June 6 sailings, which will no longer stop in Cuba. We are communicating with our guests about those changes."

Cuba Travel Update: We're aware of the announcement and are analyzing the details to understand the impact on our itineraries. For now, we're adjusting the 6/5 and 6/6 sailing itineraries, which will no longer stop in Cuba. We are communicating the changes with our guests.

— Royal Caribbean (@RoyalCaribbean) June 4, 2019

The new regulation closes off all “people to people” travel. The change includes a grandfather provision saying that previously authorized travel can be undertaken, provided “the traveler had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation)” before Tuesday.

6:50PM update: The Majesty of the Seas June 5th sailing has swapped out its scheduled stop in Havana to Costa Maya, Mexico.

In an email sent to guests, the cruise line added guests on this sailing will receive a refund in the value of 50% per stateroom the your cruise fare paid as a credit to their onboard account during the cruise.

8:00PM update: Royal Caribbean has indicated a new update will be available by June 6, at 6:00PM EST.

Royal Caribbean has put its 2020 Cuba sailings online for guests to begin booking.

Majesty of the Seas and Empress of the Seas return to offer sailings to Cuba with some new itineraries included.  Majesty of the Seas will offer 4 to 6 night adventures, with stops at destinations like Costa Maya, Cozumel and Perfect Day at CocoCay on select sailings.

Empress of the Seas will offer 3 to 8 night sailings, including an overnight or a late stay in Havana, plus Perfect Day at CocoCay on select sailings.

These new 2020 Cuba sailings are available to book exclusively by Crown & Anchor Society members on May 16, 2019. Bookings become available to the general public on May 17, 2019.

You can view a full list of 2020 Cuba sailings here:

• Majesty of the Seas
• Empress of the Seas

After each fiscal quarter, Royal Caribbean Cruises Ltd. holds a conference call with investors to go over their quarterly results that were released earlier in the day.  While most of this discussion is mired in financial discussion, there are some interesting tidbits that guests can pull out of these discussions.

We rounded up the most intriguing bits from the earnings call that may provide guidance or a view of where the cruise line is going, and how leadership sees things currently.

No changes to Cuba...yet

Ever since the U.S. Administration made an announcement that it intends to clamp down on recent changes to America's policy towards Cuba, many have wondered what impact that will have on cruises to Cuba.

Royal Caribbean Cruises Ltd Chairman and CEO Richard Fain took a little time to speak on the subject, saying essentially that nothing has changed quite yet,  "If such legislation does ensue, we believe that we possess all defenses. And we're not expecting to change our itineraries as a result. The administration also commented on possible changes to the regulations that apply to travel to Cuba."

"At this point, we don't know if there will be any changes, what those changes might be? Or to what extent they would impact us. Only 3% of our itineraries currently go to Cuba. And any impact would depend on what the regulations say. And how much advanced notice we and our guests would receive."

Perfect Day impact

Throughout the call with investors, Royal Caribbean's executives were very bullish on the potential Perfect Day at CocoCay will bring to the cruise line's offerings. Not only is it looking like a really fun place to spend the day, but it also looks like it will bring a big return for the company.

Mr. Fain started off the call saying, " To say that, she is a beauty is a massive understatement and we believe that we have created a truly game changer for the cruise industry, in fact for the vacation industry."

Royal Caribbean Cruises Ltd. Chief Financial Officer Jason Liberty spoke to the early returns the cruise line is seeing, "Perfect Day at CocoCay hasn't officially opened yet, but it's clearly fueling additional and higher-yielding demand for our Caribbean itineraries. Bookings and pricing have been exceeding our expectations overall for the Caribbean, with sailings visiting Perfect Day up by more than other Caribbean itineraries."

Guests spending onboard the ship is at the heart of higher revenue

If you are looking for a common thread among the recent strong financial results that Royal Caribbean has shown lately, the onboard purchases guests have been making is a good place to start.

Once again, onboard spending was up and clearly guests are enjoying the various packages they can purchase for their sailing.

Mr. Liberty mentioned, "On the onboard side, which has been exceptionally strong we saw an over index of spend on shore excursion our packages like beverage packaging, internet package and again more focused on the experiential stuff versus seeing more spend occur within the retail shops."

Perfect Day at CocoCay is engineered around guest experience

One of the analysts on the conference call inquired about the prospect of Perfect Day at CocoCay might seem overcrowded.  More generally, he wanted to know how all the new additions and expansion will not impact the  customer experience that would create a negative passenger experience.

Royal Caribbean International CEO Michael Bayley responded by saying, "We've designed Perfect Day to deliver what we think will generally be a perfect day for our customers. And we, from what we've seen so far with between 4,000 and 6,000 people on the island, we've got a huge amount of space available."

"So we've engineered designed for peak and the peak was way up close to 10,000. We obviously know we'll operate it with bigger ships coming to Perfect Day, and we'll see how we go. I think we're kind of feeling pretty optimistic about the potential for three ship calls versus two ship calls that could take us up to 12,000 a day. And remember, it's a fairly large island and we've only developed about a third of it."

New cruisers versus loyal customers

One analyst noticed a trend that Royal Caribbean is able to hold on to pricing premiums on new ships.

Mr. Bailey answered by talking about the cruise line's strategy of attracting people new to cruise, while retaining loyal customers, "I think we stated a few years ago one of our key areas of focus was on new-to-cruise in particularly in market like the United States we've been quite focused on growing our new-to-cruise segment. "

"We have changed some of our strategy so everything that we've done with the short product where we took the Voyager class ships and put them through role amplified and then place them into the short product with Perfect Day CocoCay has really stimulated that new-to-cruise segment. So that's part of it."

"Our loyalty customers continue to grow. They like the brands and they enjoy what we provide. I think the new ships, we've been very focused on not only the continuation of kind of on innovation in bringing new products and services to our guests. But we've done a lot more analytics on, really trying to understand what's going to attract those customers and bring them back and also be able to maintain higher yields."

New app rollout update

Many guests have been wondering when will a certain ship in Royal Caribbean's fleet gain support for the cruise line's new smart phone app.

Mr. Fain provided a brief update on the project rollout at the start of the call. "I'm particularly excited this is already been so broadly deployed that 60% of our guests can get it available. And, towards the end of the year it will be virtually all our guests. And the ratings that it's getting in the Apple App Store are 4.7."

President Trump's administration announced a new set of rules to tighten travel to Cuba, but there is no impact yet on scheduled Royal Caribbean sailings to Cuba.

New measures Bolton announced include limits on non-family travel to Cuba and a cap on the amount of money US families can send their Cuban relatives.

The Trump administration also announced a new policy allowing Americans to sue foreign firms operating in properties Cuba seized from them following the 1959 revolution. This would enable lawsuits against foreign companies that operate from hotels, distilleries and other properties Cuba nationalized after Fidel Castro's takeover.

Travel Market Report quoted Royal Caribbean Cruises Ltd. Director of corporate reputation Melissa Charbonneau, "We’re reviewing the recent statements to evaluate their impact on our guests and our company. For now, we are sailing our Cuba itineraries as scheduled and will keep our guests updated if anything changes."

Royal Caribbean has been cruising to Cuba since 2017 when Empress of the Seas made her inaugural visit. Today, Majesty of the Seas and Empress of the Seas visit Cuban destinations including Havana, Cienfuegos, and Santiago de Cuba. 

SeaTrade Cruise News quoted a Royal Caribbean spokesperson, "We’re reviewing the recent statements to evaluate their impact on our guests and our company. For now, we are sailing our Cuba itineraries as scheduled and will keep our guests updated if anything changes.:

Royal Caribbean offers regular cruise sailings to the island of Cuba, where guests can enjoy the Cuban culture, history and cuisine that has been a signature of the country for centuries.  Vibrant culture. Iconic music. Storied architecture — there really is nowhere in the world quite like Cuba. 

Royal Caribbean visits three one-of-a-kind ports around the island, with two ships that sail to Cuba regularly.  Many itineraries offer overnight stays in the capital of Cuba, Havana.

Royal Caribbean ships sailing to Cuba

Two Royal Caribbean ships can currently visit Cuba.  The Cuban port infrastructure is limited, so only smaller cruise ships can fit into the docking facilities.

Empress of the  Seas

Royal Caribbean brought back Empress of the Seas into the fleet specifically to offer cruises to Cuba.  Empress of the Seas offers cruises  to Cuba from Miami, Florida on a refurbished 1,602 passenger vessel.         

Guests sailing on Empress of the Seas will enjoy curated people-to-people experiences designed to immerse them in the country’s architecture, cuisine, music, art and natural beauty. They’ll explore Old Havana—a UNESCO World Heritage site—as well as a rum museum, Hemingway’s former residence, a local artisan market, and more. 

Onboard, Empress will have a range of activities designed to bring the spirit of the island to life for the duration of the journey. Look for cortaditos and café con leche in Café Royal, along with live salsa music alongside signature amenities like a rock-climbing wall, new pools and whirlpools, an adults-only Solarium, a Vitality Spa and a complimentary Adventure Ocean youth program.

Majesty of the Seas

With the popularity of cruising to Cuba, Royal Caribbean added Majesty of the Seas to the roster of cruise ships sailing to Cuba.  Majesty of the Seas began offering cruises to Cuba in 2018.

Sailings to Cuba on Majesty of the Seas leave from either Tampa or Fort Lauderdale to Havana, and includes stops elsewhere in the Caribbean such as Cozumel, Key West or Nassau.

Majesty of the Seas underwent a dry dock in 2016 that added new upgrades and received new onboard amenities.  Guests on Majesty of the Seas can enjoy Voom high speed internet to stay connected, brag about their vacation to friends and family, stream their favorite movies and music, and enjoy popular online video gaming. Splashaway Bay, an interactive aqua park for kids, features  a vibrant waterscape for kids and toddlers with sea creature water cannons, winding slides, a gigantic drench bucket and a multi-platform jungle-gym. In addition, the pool deck was revamped to include a new expanded bar area, family-friendly Jacuzzis and a poolside movie screen. 

Ports of call in Cuba

Royal Caribbean sails to three incredible destinations in Cuba.

Havana

The capital of Cuba is home to unforgettable sights of the place where yesterday lives today. Guests can ride along the historic Malecón in a classic car guided by a local. Or experience one of the famed Cabaret Tropicana’s folklore-laden musical extravaganzas. In Havana, timeless sights and sounds await around every corner.

Santiago de Cuba

From castles to cathedrals, quiet parks to towering landmarks, Santiago de Cuba offers endless discoveries. Guests can learn about Cuba’s spiritual heritage at the El Cobre cathedral. Discover how cigars are hand-rolled by locals at La Casa del Habano. And learn some Danzón steps from a local during one of the city’s many colorful carnivals.

Cienfuegos

For a taste of Cuban culture that few get to savor, Cienfuegos is the place to be. Spot stalagmites in Martin Infierno Cave, explore forest trails in Parque El Nicho and soak up the city’s French-colonial history as you stroll past centuries old buildings. In Cienfuegos, paths lead to new discoveries.

Important Cuba cruise tips

Before you cruise to Cuba on Royal Caribbean, here are some helpful things to know about Cuba cruises.

Documentation

To enter Cuba, American citizens need to meet certain standards for at least one of the 12 categories of travel approved by the U.S. Treasury Department. Royal Caribbean will take care of providing each guest with a Cuban visa.  The cost of a visa is $75 per person, and will be processed by the cruise line and will be waiting for you when you board the ship.  You just need to sign an affidavit certifying participation in one of the ship’s excursions or ensure that you qualify for another category.

In order to satisfy United States law, you will need to to fulfill on one of the allowed reasons for visiting, but that’s easy too. You just need to book a shore excursion that complies with U.S. requirements (this includes any Royal Caribbean shore excursion).  Just be sure to know that a day tour must be booked; night tours alone won’t meet the requirement.

The Cuban government requires all U.S. visitors to have health insurance coverage during their time discovering the island nation. Chances are, your current insurance will not cover you while in Cuba, but no worries: Royal Caribbean also has this covered for you, so there’s no extra work needed on your end. The cruise fare also includes a local health insurance fee should any medical attention onshore be required. 

Passports

Guests need their actual passport book — passport cards, birth certificates and driver’s licenses will not be accepted to go on-shore.

Note: Make sure your passport is valid for six months past your sailing date.

Currency

There are two main currencies in Cuba  — the Cuban Peso (used by locals) and Cuban Convertible Peso (used by tourists).

Most businesses accept cash-only, and small U.S. bills can be exchanged at the cruise terminal, in banks and exchange offices (ask for a “CADECA”), and in hotels.

Like U.S.-based mobile phone service, credit card service can be equally limited on the island. Restrictions on U.S. credit cards have been lifted but banks and merchants are still working out what’s needed to support them. Your best bet is to carry cash while in Cuba.

Souvenirs

For the most part tourists are free to purchase goods to bring back and enjoy in the U.S. — even the world-renowned cigars and rum. Just make sure they’re bought from authorized sellers.

Internet & Connectivity

In general, internet connectivity in Cuba is nearly non-existent, so do not expect to find WiFi access while on shore. Your best bet is to rely on your cruise ship's Voom high speed internet signal, which will work while the ship is docked in Cuba.

Your U.S.-based cell phone might work in Cuba, but it’s safer to bet it won’t. Some carriers currently offer roaming service in the country, but like much of the tourism infrastructure, many providers are working on rolling out services to the island. Check with your carrier prior to sailing to Cuba to avoid any pricey fees.

Accessibility

Wheelchair users should note that accessibility is limited in Cuba. There is a lack of curb cuts, ramps, accessible vehicles and elevators. Doors may not be as wide and grab bars unavailable

More Cruises to Cuba

• Expert tips and advice for visiting Cuba on a cruise
• Majesty of the Seas cruise to Cuba review
• Old Havana City Sightseeing shore excursion review