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.

Hope you are having a great weekend.  Here is all of this week's Royal Caribbean cruise news.

The contract you agree to when you book a cruise now includes additional disclosures regarding COVID-19.

Royal Caribbean has updated its Cruise Contract with new language related to the current global health crisis at some point in the last few months.

Section 4 of the contract used to cover simply "medical care and other personal services" has been updated to now cover "public health, COVID-19 policies and procedures, knowing acceptance of the risks".

Royal Caribbean News

• Royal Caribbean begins dropping visits to Key West following cruise ship ban
• The big questions for Royal Caribbean's 4th quarter earnings call next week
• Luxury cruise line will require everyone to get a COVID-19 vaccine
• Royal Caribbean pushes back final payment date for 2021 Alaska and New England cruises
• Royal Caribbean joins movement to bring shore power to cruise ships
• Norwegian Cruise Line cancels May 2021 cruises
• Is there a pattern to when Royal Caribbean cancels cruises?
• Carnival CEO: "By the end of this year, most, if not all, of our fleet will be in action"
• First look at AquaTheater on Royal Caribbean's Wonder of the Seas
• Royal Caribbean's online check-in requires a negative covid test before arriving to the cruise terminal
• Royal Caribbean opens $40 million funding option for travel agents
• Odyssey of the Seas construction photo update - February 16, 2021
• 10 Things Royal Caribbean does differently from any other cruise line
• What's Included on a Celebrity Cruise?
• A Valentine's Day story from the only Royal Caribbean cruise ship sailing

New RCB Video: What is the WORST Royal Caribbean ship?

Have you subscribed to the Royal Caribbean Blog YouTube Channel? We share some great videos there regularly, all about taking a Royal Caribbean cruise! This week, we are sharing our latest video — What is the WORST Royal Caribbean ship? — and don’t forget to subscribe here.

Royal Caribbean Blog Podcast

The 394th episode of the Royal Caribbean Blog Podcast is now available featuring a look at Teresa's first back to back cruise.

In this episode, Teresa shares her cruise story from Allure of the Seas trying two cruises in a row.

Please feel free to subscribe via iTunes or RSS, and head over to rate and review the podcast on iTunes if you can! We’d appreciate it.

Coast Guard wont fine you for not wearing a mask on a cruise ship, but you will get kicked off

The Centers for Disease Control and Prevention (CDC) requires people on public transportation to wear masks, but what is the penalty if you don't comply?

If you don't wear a face mask on an airplane, the Transportation Security Administration (TSA) will fine you, but the Coast Guard will not do the same for cruise ship guests violating the new Federal rules.

A spokesperson for the Coast Guard provided a vague explanation that they intend to ensure cruise ships are enforcing the rules, but stopped short of saying they would fine passengers caught breaking the rules in a similar way that the TSA does.

Royal Caribbean's next new cruise ship looks to be close to taking her next big step forward to joining the fleet.

Based on activity at the Meyer Werft shipyard, Odyssey of the Seas is being prepared to begin her river conveyance.

Cruise ship observers near the shipyard have noticed Odyssey has been moved away from the pier so that all lifeboats can be lowered and tested.

RoyalCaribbeanBlog reader twangster also noted tide tables and notices of dam closures along the Ems River point to Odyssey of the Seas making the trip down the river towards the sea on the 27th of February.

In order to have a succesful conveyance, wind speeds must be 20 knots or less and a full or new moon present.

Neither Meyer Werft nor Royal Caribbean has announced or confirmed when the conveyance may take place. It is believed the conveyance will not be as grand a spectacle as it usually is in order to avoid crowd gatherings along the Ems River during the global health crisis.

Ever since being floated out in November 2020, Odyssey has been docked outside of the construction hall where she was assembled.  

Read more: Why are new cruise ships still being built?

What is a conveyance?

The conveyance is a planned move of the cruise ship from the shipyard to the North Sea.

Meyer Werft shipyard is in Papenburg, Germany, which is considerably inland from open ocean. Meyer Werft was built inland to avoid the impact of storms in the North Sea, and has been sailing ships down the Ems since 1795.

As a result, Odyssey of the Seas will be taken slowly down the 32 kilometer journey during a coordinated move that coincides with high tide.

The conveyance has to occur when the tides are just right so that there is more water below the hull.  In addition, certain dams will be closed to increase the safety buffer.

In some places, there are only a few centimeters of clearance on either side of the ship as it travels from the shipyard to the channel.

Two tugboats on required to guide the ship, and the ship will move at approximately 2-3 knots down the river.

A total of 4 bridges are either opened or removed and power us cutoff to power lines at 3 locations causing them to shrink and rise up so the ship can pass with as little clearance as 1.8 meters.

Odyssey of the Seas will traverse her conveyance backwards down the river in order to optimize control. Going backwards protects the azipods and propellers since the rear of the ship stays in the center of the river when maneuvering in reverse.

It takes about 10 hours to complete the conveyance, although the time will vary based on a variety of conditions.

Each of the Quantum Class ships that came before Odyssey of the Seas have been successfully moved down the river during their conveyance. In most years, the conveyance is as much a celebration as a technical maneuver.

In fact, the Quantum Class ships are one of the largest cruise ships to leave Meyer Werft and travel through the Ems River.

Once the conveyance is complete, sea trials will likely commence, followed by handover of the cruise ship to Royal Caribbean.

No delivery date has been announced yet, other than to expect it in Spring 2021.

Perhaps no other question has been asked as often over the course of the last year as the likelihood of their cruise actually sailing.

Every week I pull a popular question that RoyalCaribbeanBlog readers have been asking to help everyone who might be wondering the same thing.

I have a cruise booked for October 2021 on Harmony of the Seas. What are the chances this cruise will be able to sail? - Rick T.

Rick's question can be expanded to almost any sailing booked this year (or even in 2022), because after a year of no cruises and plenty of cancellations, it's difficult to know when cruises will be able to restart.

Unfortunately for Rick, and anyone else wondering the same thing, there is no answer. 

Nobody knows with any kind of accuracy.

Why is it so difficult to know when cruises might restart?

Essentially, there is not enough information to make any kind of predictions that are not purely random guesses.

We learned earlier this month that the U.S. Center for Disease Control Control (CDC) has not delivered to the cruise lines yet the technical instructions on what each ship needs to do in order to prepare itself for test cruises.

This is a major hurdle for Royal Caribbean to begin implementing new health protocols on its cruise ships and conduct test sailings.

It is generally believed that before any cruise ship can sail again, test sailings need to occur and be validated by CDC observers.  At that point, a cruise line can apply for conditional approval to resume sailings.

Other than canceling upcoming cruises a month at a time, Royal Caribbean has not provided any outlook or prediction on when sailings might restart.

In fact, Royal Caribbean Group Chairman and CEO Richard Fain told travel agents earlier this month he says no one yet knows for certain when cruises will resume en masse.

"My answer is consistently, I don't know. But more recently, my answer has been, I don't know, but that's the good direction to be going in."

Time is on your side

The best answer to Rick's question on the chances his sailing will occur, is to say the further out your cruise is, the higher the likelihood of it occurring.

Right now, the world is in a race to distribute vaccines to help bring down the number of cases that are contributing to there being a public health emergency.

The further out you go into 2021, the more time pharmaceutical companies and governments have to produce and distribute vaccines to the population.

Dr. Scott Gottlieb, co-chair of Norwegian Cruise Line Holdings’ and Royal Caribbean Group’s Healthy Sail Panel, said as soon as the end of March the vaccine may be widely available to residents of the United States.

Dr. Gottlieb estimates 250 million doses will have been delivered to some 150 million people by the end of March.

Of course, there are lots of conflicting predictions on when "herd immunity" may become a reality, but even conservative estimates put widespread vaccine distribution in the summer. 

All of this means cruises scheduled for summer 2021 and beyond certainly appear to have a higher chance of occurring.

What signs to look for when cruises might restart?

Besides Royal Caribbean actually announcing a firm restart plan, there are likely to be indications things are moving in the direction of cruises being able to restart.

Rehiring crew members is always a positive sign that cruise lines are thinking they want to do something to get closer to restarted. There have been times over the last year when crew were hired, then cancelled their plans to come back, so it is not always a firm indicator.

The best sign will be when test sailings can commence.  In order to get approval to sail, all cruise lines need to demonstrate to the CDC that new health protocols can work.

Test cruises are simulated sailings with mostly cruise line employees onboard pretending to be guests.  Travel agents are also likely to be on at least some of those sailings.

Any test sailings are a very good sign of what to expect.

In addition, comments from cruise line executives may provide context in the next few weeks and months of the direction things are going.

More mailbag questions:

• Why do I have to pay gratuities for my toddler?
• Should I make final payment for my cruise?
• What's worth paying extra for on a cruise?

Following Key West voting to ban cruise ships, scheduled stops are being cancelled.

In November 2020, Key West voted to ban large cruise ships and now Royal Caribbean is informing guests their ship will not visit the island.

An email sent to guests sailing on a Radiance of the Seas sailing on December 5, 2021 informed them that due to "recent cruise regulations", the scheduled stop in Key West has been replaced with a visit to Perfect Day at CocoCay.

Read more: Do's & Don'ts of Perfect Day at CocoCay

Due to recent cruise regulations, we must replace our visit to Key West, Florida. Instead, we'll visit our extraordinary private destination, Perfect Day at CocoCay. 

We know how much time and effort go into planning your vacation, and we're sorry for any inconvenience caused by this. 

Any pre-paid shore excursions scheduled for Key West, Florida will be refunded to the original form of payment.

The itinerary change is a result of Key West residents voted to approve a limit on cruise ship traffic to Key West.

There has been some debate within the State of Florida about the validity of such a ban, but in the meantime it appears Royal Caribbean is moving forward with changing their schedules.

The new rules for Key West that passed are as follows:

• Limit the number of daily cruise ship visitors at 1,500
• Prohibit cruise ships with 1,300 passengers or more from docking
• Give docking priority to cruise lines that have the best health and environmental records

All three proposals passed with 63.34%, 60.7% and 81.19% voting yes, respectively.

None of Royal Caribbean's cruise ships are small enough in capacity to be admissable under the new Key West laws.

Key West is not a major destination for Royal Caribbean cruise ships, with a few ships making stops at the island periodically, primarily smaller or older ships, such as Brilliance of the Seas.

The biggest cruise line yet has announced it will require its passengers onboard to have a Covid-19 vaccine in order to sail.

Luxury cruise line Crystal Cruises announced one of its new health protocols is to require the Covid-19 vaccine of guests.

A few other smaller cruise lines made similar announcement, but Crystal is arguably the most notable cruise line yet to do so.

Guests must be fully inoculated with a Covid-19 vaccine (with both doses if recommended by the manufacturer) at least 14 days prior to boarding any Crystal ship and will be asked to provide proof of vaccination before embarkation. 

Passengers sailing on Crystal will be required to take precautionary steps that includes negative Covid-19 tests for both guests and crew, reduced capacity, social distancing, nimble mask requirements, health screening questionnaires and more. 

Crystal admits right now when everyone can get the vaccine remains to be seen, but they believe by the time they are ready to restart operations in May or June, there will be sufficient time for guests to be vaccinated.

If someone is unable to be fully inoculated in time, Crystal says guests booked on 2021 voyages (except those booked on the Advance Purchase Savings program) have the option to move to a later departure date or cancel up until 60 days prior to first service without penalty. 

Verified documentation of vaccination and negative Covid-19 test will be required at the time of boarding in English, and failure to provide this documentation will result in denial of boarding. 

On the subject of children, Crystal recognizes that the vaccines are currently only approved for people 18 years or older. Regardless, the cruise line is unable to accommodate anyone, no matter what age, who has not been vaccinated. 

In addition to passengers, crew members will also be expected to be vaccinated.

Crew members are required to be tested for Covid-19 prior to leaving their home location to join the ship and must receive a negative result; they also will take a COVID-19 test at embarkation; quarantine for seven days upon arrival; and take a test at the end of that seven-day period and must receive a negative result, before beginning their duties. When vaccines are widely available, they will be a requirement of employment at least 14 days prior to service.

While Crystal will require the vaccine of guests and crew, testing before, during, and after the cruise is still required of everyone. Many governments - including the United States - and certain airlines require proof of negative Covid-19 test no more than three days before entry or flight departure, regardless of vaccination status.

Crystal is not the first cruise line to require the vaccine, but it is the most notable line thus far. 

Saga Cruises became the first cruise line to require the Covid-19 vaccine when it announced the requirement in January 2021. Thus far, only small cruise lines have required vaccines of guests.

Royal Caribbean has only committed to requiring the vaccine of crew members, but has not made any decision related to requiring it of passengers.

Industry expert Stewart Chiron thought Crystal's new policy was "premature" based on his post on Twitter.

After a year of Royal Caribbean cancelling cruises due to the global health crisis, is there a pattern to when they cancel sailings?

There are plenty of theories out there that the announcements come on Fridays, or after 5pm, or before calls with travel agents, but it is not clear if there really is any kind of pattern.

I wanted to determine if Royal Caribbean follows any sort of pattern when it cancels its cruises by looking at the past cancellation notices and trying to determine if there is truly a "method to the madness" of cancellations.

Read more: The unconfirmed cruise ship rumors that get repeated a lot by cruise fans

To accomplish this, I looked back at past RoyalCaribbeanBlog.com posts about the cancellations.  I always posted them very soon after Royal Caribbean made the announcement to cancel, so it is an easy way to get a sense of when the cruises were cancelled, as well as how many days before the scheduled sailing was to begin.

• June 20201
  • Cancelled Tuesday, April 6 at 2pm
  • 56 days before first sailing
• May 2021
  • Cancelled Tuesday, March 9, 2021 at 10am
  • 53 days before first sailing
• March/April 2021
  • Cancelled Tuesday, January 12, 2021 at 9am
  • 48 days before first sailing
• January/February 2021
  • Cancelled Wednesday, December 2, 2020 at 11am
  • 61 days before first sailing
• December 2020
  • Cancelled Monday, November 2, 2020 at 4pm
  • 29 days before first sailing
• November 2020
  • Cancelled Tuesday, October 6, 2020 at 4pm
  • 26 days before first sailing
• October 2020
  • Cancelled Wednesday, August 5, 2020 at 10am
  • 57 days before first sailing
• Mid-September 2020
  • Cancelled Friday, July 17, 2020 at 10am
  • 46 days before first sailing
• August/Early September 2020
  • Cancelled Tuesday, June 23, 2020 at 9am
  • 39 days before first sailing
• July 2020
  • Cancelled Wednesday, May 20, 2020 at noon
  • 42 days before sailing

Looking back at these cancellations, the only thing resembling a pattern are cancellations most often occur on Tuesday or Wednesday.

Read more: Top 8 things repeat cruisers seem to say all the time

There appears to be no pattern to the time of day tends to favor before noon eastern, although there were a few that came in at the end of the day.

How many days before the first affected sailing also seems to not follow much of a pattern, unless you count "more than 26 days and less than 60 days" as a pattern.

The best takeaway I can determine from this data is Royal Caribbean cancels cruises when they come to a consensus that there is no chance for these cruises to occur.

Industry pattern

There is a different pattern for cruise cancellations that Royal Caribbean is absolutely following, and that is following other cruise lines.

When one of the top three mainstream cruise lines cancels a cruise, usually the other two lines follow with similar cancellations a few days or weeks later.

There has not been a pattern which cruise line starts first, but so far Carnival, Norwegian and Royal Caribbean have been following each other's leads when it comes to cancelling more cruises for the same duration of time.

Cruise fans looking for optimism about the return to service should look no further than Carnival Corporation CEO Arnold Donald's latest comments.

During a webinar, Mr. Donald told travel industry insiders that he thinks many of his brands ships will be cruising by the end of the year.

"What I will predict is this: I think that certainly by the end of this year, most, if not all, of our fleet, I’m optimistic, will be in action."

"I think there’s a really high probability that all of them will be back by early next year if things continue to progress the way they have."

Why is Mr. Donald so bullish on the return of cruises?

In short, he thinks a faster rollout of the vaccine, better treatments and low-cost testing are all working towards move the global health crisis away from a public health emergency.

"The combination of all that bodes really well and puts us in a good position," he said about the advances being made.

"The knowledge about covid has changed. The ability to manage covid has changed. All these things have moved in a positive direction."

Mr. Donald's comments echo similar comments from Royal Caribbean Group Chairman and CEO Richard Fain who has pointed to positive signs in the fight against covid.

Earlier this month, Mr. Fain touted the rollout of the vaccine and new health protocols as a key component to moving towards a restart.

"The vaccines and other steps we are taking are also important to protect the crew. In the beginning, it was really very difficult to ensure that the crew members were virus free. But the new vaccines, testing and other steps are giving us the opportunity to protect them as never before."

Speaking of the vaccine, Dr. Scott Gottlieb, co-chair of Norwegian Cruise Line Holdings’ and Royal Caribbean Group’s Healthy Sail Panel, told CNBC he believes covid vaccine appointments will be widely available by April in the U.S.

"I think we’re going to run out of demand sooner than we think. I suspect that in some point in March and certainly by the end of March, we’re going to have to make this generally available."

"That doesn’t mean everyone can go and get a vaccine on April 1, but I think everyone is going to be able to go online and get an appointment sooner than we think."

Dr. Scott Gottlieb was the Commissioner of the FDA from 2017-2019 and served as the agency’s Deputy Commissioner for Medical and Scientific Affairs from 2005- 2007.

He believes supply constraints will remain throughout February that justify having more narrow eligibility criteria. "But at some point in March, states are going to have to make decisions about how to open this up more widely."

Royal Caribbean Group has scheduled its fourth quarter earnings call with investors, and this call is going to be our best chance at a tangible update on where things stand with the cruise line.

The purpose of the call is to provide a business update and discuss fourth quarter 2020 financial results.

Earnings calls are hosted by Royal Caribbean Group's top executives, and it is a combination of disclosures and Q&A. 

Royal Caribbean Group will host their call at 10:00 a.m. Eastern Time, Monday, February 22, 2021.

Executives may start off the call with some insight into where they see things headed in the near term, but the bulk of the call will be investors asking the cruise line executives about things not in the report, which may have an impact on guests as well.

As we gear up for this conference call, here are the big questions cruise fans are just as eager to know answers to as Wall Street.

When will test cruises begin?

If there is one milestone cruise fans and Wall Street is eager to see, it is test cruises beginning.

Test cruises are a requirement of the U.S. Centers for Disease Control (CDC)'s Conditional Sail Order to demonstrate that the new health protocols the cruise line proposes will actually work.

Test cruises are seen as an indication of progress, and the return of ships to sea for simulated voyages would be as important to the morale of the cruise industry, as it would be for satisfying the CDC's requirements.

Up until now, there has been no indication at all by any cruise line that test cruises are on the horizon.

Just last week, Vicki Freed, Royal Caribbean's Senior Vice President, Sales, Trade Support and Service, told travel agents there has not been any updates on test cruises because nothing is planned yet.

"The reason you haven't heard anything is because we don't have dates yet," Freed said. "We don't have any more information."

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

When will cruises restart outside of Asia?

In conjunction with test cruises, the other major question is when will revenue sailings actually restart.

Wall Street has seen some pretty dismal numbers from Royal Caribbean Group since the cruise industry shut down.  Billion dollar losses are easier to tolerate if there is a plan for revenue to improve, and cruises need to restart for Royal Caribbean Group to return to profitability.

The reality is we will almost certainly not get any kind of firm answer on this topic.  However, there could be enough "reading between the lines" information for analysts to get a sense of confidence from the executives.

Even if we all know the answer is "no one knows", that will not stop analysts from asking (likely) many questions about it.

Read more: No, nobody knows if the cruise you have booked will actually sail

How cooperative has the CDC been?

In the months since the CDC lifted the No Sail Order, there has been very little visible progress in cruise lines getting back to service and that has some wondering about the relationship between cruise lines and the CDC.

Carnival Corporation indicated during their quarterly earnings call this month that they are still waiting on the full instructions from the CDC, almost three months after the No Sail Order was lifted.

While Carnival did not come out and say it, it sounded like the CDC was dragging their feet in the process and it would not surprise me to hear at least one Wall Street analyst ask about the relationship with the federal agency, and what hurdles remain.

Royal Caribbean has not said much on the topic of the CDC, but Ms. Freed told travel agents that the cruise line has to "tread very carefully" when it comes to working with the government to get cruising restarted.

"We can't push them to make us sail," she said. "It has to be jointly agreed upon. We have to tread very carefully with them, and we want to work with them as a good partner. We don't have answers yet, because we're waiting for answers."

Read more: Why haven't cruise lines been more aggressive with the CDC?

Any plans to sell more ships?

Royal Caribbean Group has sold Majesty and Empress of the Seas, as well all of Azamara.  Will more ships be sold?

Shoring up the company's bottom line has been something other cruise lines have done by selling cruise ships, and the question if more ships will be sold or scrapped remains a hot topic.

Cash is king for cruise lines right now, as the more money you have on hand, the longer you can survive the industry shutdown without revenue.  Outside of taking out new loans, selling ships has been a popular option for other cruise lines.

As we all know, these plans can change at any time, especially if the losses start adding up.

Read more: Which Ships Did Royal Caribbean Sell?

New protocols

Assuming Royal Caribbean Group does not have all the answers on a firm restart plan, the next best thing to assuage investors is a plan for cruises to be able to restart in a safe manner.

While the Healthy Sail Panel has provided key recommendations on what it says cruise lines should do, Royal Caribbean has not specified exactly which of its Royal Promise rules are intended for Singapore sailings versus the entire fleet.

The new rules have an additional effect on the psyche of the public prior to cruises starting, by adding confidence that the operations are indeed safe. Similar to how airlines and local businesses added new protocols to keep guests safe, the cruise lines are looking to demonstrate the lengths at which they will go to in order to keep everyone healthy.

An update to the Cruise Contract provides insight into the direction they are thinking.

Read more: Top 10 most surprising new cruise health protocols

How strong is demand for cruises?

Royal Caribbean (and all cruise lines) are hurting financially now, but the promise of a better tomorrow is what investors are most interested in, especially once cruises can restart.

One of the saving graces for Royal Caribbean has been very strong demand for cruises in the months to come.

A combination of pent-up demand by the public to travel once the global health crisis eases, along with veteran cruisers eager to get back onboard has bolstered cruise bookings over the course of the next few months.

Investors will likely want to know how well-booked Royal Caribbean is not only for the remainder of 2021, but into 2022 and beyond. 

The exact date cruises will resume is unknown, but being able to hit the ground running with good demand will help Royal Caribbean rebound faster.

Read more: Latest update from Richard Fain

How you can listen to the earnings call

There will be full coverage of anything intriguing that comes out of Royal Caribbean Group's fourth quarter 2020 earnings call right here on RoyalCaribbeanBlog, but if you would like to listen on your own, here's how.

The call will be available on-line at the company's investor relations website, www.rclinvestor.com.  

You will be able to listen via the link provided close to the start of the call.

The Centers for Disease Control and Prevention (CDC) requires people on public transportation to wear masks, but what is the penalty if you don't comply?

If you don't wear a face mask on an airplane, the Transportation Security Administration (TSA) will fine you, but the Coast Guard will not do the same for cruise ship guests violating the new Federal rules.

The Centers for Disease Control and Prevention (CDC) passed a new order that requires people to wear masks on public transportation, which includes aircraft, train, road vehicle, vessel or other means of transport.

Passengers who refuse to wear masks can be fined $250 for the first infraction and up to $1,500 for repeat offenses on airplanes, airports, passenger rail, or buses.

What about cruise ships?

The CDC order definitely includes cruise ships as part of the order, but the TSA does not cover cruise ships.

Enforcement of the CDC's order on cruise ships will fall to the U.S. Coast Guard, and it appears there will not be the same type of individual fines levied.

RoyalCaribbeanBlog reached out to the U.S. Coast Guard for clarification on fines for someone who goes on a cruise ship and tries to buck the cruise line rules by not wearing a mask.

A spokesperson for the Coast Guard provided a vague explanation that they intend to ensure cruise ships are enforcing the rules, but stopped short of saying they would fine passengers caught breaking the rules in a similar way that the TSA does.

The Coast Guard said that cruise lines must "use best efforts" to enforce the face mask rules, which includes:

• boarding only those persons who wear masks;
• instructing persons that federal law requires wearing a mask on the conveyance and failure to comply constitutes a violation of federal law;
• monitoring persons onboard the conveyance for anyone who is not wearing a mask and seeking compliance from such persons;
• at the earliest opportunity, disembarking any person who refuses to comply; and
• providing persons with prominent and adequate notice to facilitate awareness and compliance of the requirement of this Order to wear a mask; best practices may include, if feasible, advanced notifications on digital platforms, such as on apps, websites, or email; posted signage in multiple languages with illustrations; printing the requirement on transit tickets; or other methods as appropriate.

"Conveyance operators may be subject to civil or criminal penalties should they fail to make best efforts to take appropriate actions regarding non-compliant passengers on their vessels.

"Failure to implement a mask wearing program may result in control action taken by the COTP directing the movement and operation of a vessel."

"Additionally, if passengers refuse to wear a mask, operators may provide the persons with prominent and adequate notice to facilitate awareness and compliance of the requirement of this Order to wear a mask, and instruct the person that federal law requires wearing a mask on the conveyance and failure to comply constitutes a violation of federal law; and Vessel operators are directed to make best efforts to, at the earliest opportunity, disembark any person who refuses to comply."

"Repeated failure to impose the mask mandate could result in civil penalties and/or criminal action. The Coast Guard is also charged with enforcing CDC laws and regulations, failure to adhere to the CDC mask order may result in civil or criminal penalties issued by the Coast Guard on behalf of the CDC.

"The COTP may issue orders prohibiting vessels from mooring at a port facility that fails to implement the CDC mask requirements."

While the Coast Guard may not fine anyone like the TSA will, they do recommend the cruise line kick them off the ship as soon as possible.

In the CDC's order, the agency says that criminal penalties are an option, but thinks most people will comply.

"While this Order may be enforced and CDC reserves the right to enforce through criminal penalties, CDC does not intend to rely primarily on these criminal penalties but instead strongly encourages and anticipates widespread voluntary compliance as well as support from other federal agencies in implementing additional civil measures enforcing the provisions of this Order, to the extent permitted by law and consistent with President Biden’s Executive Order of January 21, 2021"

Royal Caribbean requires guests to wear face masks on its Quantum of the Seas sailings in Singapore, and its cruise contract for all guests clearly states guests must wear masks in most locations outside of the Passenger’s cabin while onboard, during embarkation, disembarkation and shore excursions.

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

The cruise contract goes on to say that if a passenger (or anyone in their traveling party) engages in noncompliance with new health protocols, they can be disembarked and reported to government authorities.