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Royal Caribbean executives talk higher demand for cruises & why cruises are better value than land vacations

In:
28 Jul 2022

Top executives from the Royal Caribbean Group hit on a number of topics with investors during the company's second quarter earnings call on Thursday.

Allure of the Seas aerial rear

Each quarter, Royal Caribbean Group hosts a conference call with Wall Street analysts to go over the financial results and share more insight beyond the earnings sheet.

During the course of these calls, the public gets insight into what the company sees and that provides more visibility into the cruise business.

Here are the important tidbits from the hour-long call that cruise fans should be aware of as it relates to how the company is doing.

Over 100% capacity in Caribbean itineraries

Two ships docked in Cozumel

Demand is so strong for cruises to the Caribbean right now, that ships are sailing completely full.

Royal Caribbean Group President and CEO, Jason Liberty, highlighted this fact at the opening of the call, "Our North American itineraries are now sailing at over 100% load factors, and we are building on this momentum as we expect to reach load factors in the mid-nineties in Q3 and then return to triple digit load factors globally by year end."

In cruise industry speak, "load factors" refers to how many passengers are onboard as a percentage of capacity.

Royal Caribbean Group Chief Financial Officer, Naftali Holtz, broke down the capacity in the second quarter based on region:

  • Overall: 82% load factors, with June just about 90%
  • North America: About 100%
    • Caribbean: 103%, with some ships reaching 107%
    • Northeast and West Coast (including Alaska): 90%
  • Europe: 75% in June

Why do so many people want to cruise? Mr. Liberty sees strong trends driving it, "The combination of consumers strong propensity to experience and travel, accelerating demographic trends which are pulling in more bucket list and multigenerational travel, a very compelling value proposition and a strong preference for our brand is translating into strengthening demand."

Family oceanview on Brilliance

You might be wondering how a ship can sail over 100% capacity, and the answer comes down to how many people are in a stateroom.

A ship has a 100% capacity based on double occupancy, but if you add third or fourth passengers into a cabin, then you get capacity exceeding 100%.

Cruise vs land based vacation

Hotel in Cocoa Beach

Royal Caribbean has always compared itself to land vacations (and not other cruise lines) as their primary competition. To that point, executives talked about how a cruise compares to a land vacation.

Mr. Liberty talked up the benefits of a cruise, "Cruising has always been an attractive value proposition when compared to land based vacation alternatives, and that is truer today than ever before."

Specifically, he thinks there is a larger than ever gap of value between cruises and land vacations, "There is a very healthy gap, and a larger gap today, than there has been with land based vacations."

"Now that these protocols are falling off, and we're operating and our guests who are incredible advocates of ours, are sharing their experiences and telling them that, you know, cruise is just like what it was pre-Covid that all of that is is kind of manifesting into this opportunity where people look at cruising and say, wow, there's a really good value proposition."

Read moreRoyal Caribbean will drop Covid-19 testing for vaccinated cruisers on shorter sailings

Spending trends

If you've noticed higher prices for cruise extras, there's plenty of people who are still buying them.

Mr. Liberty talked about guest spending in his opening remarks, "Overall, we continue to see a financially healthy, highly engaged consumer with a strong hunger to dream and seek experiences. And they are willing to spend more than ever with us to create those memories."

"The 100,000 plus guests that we have on our ship every day, including the 125,000 guests that are currently on our ships today, have been spending at least 30% more on board our ships across all categories when compared to 2019."

"Approximately 60% of our guests book their on board activities before they ever stepped foot on our ships."

What Mr. Liberty is saying is that not only are a lot of people booking cruises, but a majority are booking add-ons before their cruise at a pace never seen before the pandemic. 

It's critical for Royal Caribbean Group's bottom line that passengers buy things in advance, because it tends to translate into more profit than someone who books onboard, "Every dollar a guest spends before the voyage, translates into about $0.70 more on the dollar when they sail with us and double the overall spending compared to other guests."

To exemplify this trend, Royal Caribbean International President and CEO Michael Bayley pointed out the other day someone spent "over $4,000" for a single over the water cabana at Perfect Day at CocoCay.

Read moreGuide to CocoCay Cabanas

"There's just a lot of demand for these experiences, as Jason said. And we've also seen this in Alaska, for example, with the product that we have in Alaska, that people just seem to be more willing to open their wallets and purchase these experiences."

No plans to offer stock

Carnival Cruise Corporation was treated poorly by the stock market when they announced a new round of stock offerings to drum up cash, but Royal Caribbean Group has no such plans.

Mr. Liberty spelled out that things are going well for his company, "Our business is clearly ramping up. We're generating cash flow after OpEx, after CapEx."

"We have been very thoughtful and very methodical about capital raising, balancing liquidity and minimizing dilution, especially relative to others."

"I would note that issuing equity. One is obviously it's a board decision. The bar is at exceptionally high for us to be issuing equity. We don't have any plans to issue equity."

He added that the company has a different focus than cash on hand, "What the board is really focused on is how do we get back to pre-Covid levels as soon as possible. And by that meaning earnings, meaning ROIC and getting our balance sheet back and leverage back to what it was pre-Covid."

Inflation is peaking

Cruise ship in Grand Cayman

Royal Caribbean seeks inflation numbers peaking, which could mean lower costs in the coming months.

Mr. Liberty pointed to a few indicators that tell him, "inflation levels are peaking and that we would start seeing some relief in the coming months."

The company has two primary categories that are most affected by inflation: food and fuel.

"There are some initial positive signs with respect to inflation trends and our food basket. Our more recent month over month FNB (food and beverage) inflation indicator has increased at the slowest pace thus far in 2022."

Mr. Liberty also alluded to conversations with suppliers that things are getting better.

Royal Caribbean will drop Covid-19 testing for vaccinated cruisers on shorter sailings

In:
28 Jul 2022

Very soon, fully vaccinated guests won't have to bother with a Covid test on cruises less than six nights.

Freedom of the Seas sailing away from Miami

Included in Royal Caribbean Group's second quarter financial results was a mention of a policy change related to Covid-19 testing.

Starting Aug. 8, testing will be required for unvaccinated guests on all voyages and for vaccinated guests only on voyages that are six nights or longer. 

Up until now, all guests were required to get a Covid-19 test completed prior to their cruise, regardless of vaccination status.

Cruise ship docked in Miami

The change in policy is a result of the the CDC ending its Covid-19 Program for Cruise Ships.

No further details on the policy change were part of the press release, but we should expect more information in the coming days.

A major change in policy

Covid-19 testing has been a cornerstone of Royal Caribbean's health protocols since cruises restarted in 2021.

Up until now, vaccinated guests had to get either a PCR or rapid antigen test up to 2 days before sailing. Unvaccinated children had to get a PCR test only up to 3 days before sailing.

Virgin Voyages was the first cruise line in the United States to drop testing. Norwegian Cruise Line has also eliminated testing for vaccinated travelers for all cruises sailing from any port except in the U.S., Canada, or Piraeus, Greece.

Eliminating testing for vaccinated passengers removes a major obstacle to pre-cruise stress, as many cruisers were concerned they weren't sure they would actually be able to sail until just a couple days before their cruise.

Mr. Liberty said the change is a move to be more like other forms of leisure travel, such as theme parks, casinos, or air travel. 

"We are continuing to adapt our protocols to align more closely with how the rest of society and other travel and leisure businesses are operating."

"This means that we're transitioning to the point where everyone will be able to vacation with us while always working with our destination partners to meet their regulations."

Testing expected to drop for longer sailings soon

Oasis of the Seas in New York with Statue of Liberty

If you'd like to see Covid testing drop also for longer sailings, it sounds like Royal Caribbean has a plan for it.

Speaking to investors during an earnings call on Thursday, Mr. Liberty said, "We also anticipate in the not too distant future that pre-embarkation testing for longer duration voyages will be reduced."

He later elaborated on changing testing requirements for longer sailings, "We're starting off here by doing the five days or less, and we're going to look at that."

"I think our our expectation here, call it in the next 45 days or so. And, of course, following local requirements, which will somewhat dictate in some of our destinations what those testing requirements will be, that the majority of the testing requirements will will be lifted, especially around the majority of our of our deployment."

Less testing should translate into more bookings

As soon as Royal Caribbean Group announced the change, the company expects bookings to spike as a result.

Royal Caribbean International President and CEO Michael Bayley spoke about the reaction in the marketplace to dropping testing for short cruises, "this kind of change I think will be seen very positively."

"We've got some distributors who have been anxiously awaiting changes as long as along with many of our customers."

Cantilevered hot tub on Freedom of the Seas

"One of the calculations that we have is about 40% of all of the folks that are sitting on the byline. So people who've been waiting for the protocols to change."

"I think this easement and this change is going to be viewed very positively. So we're expecting to see an increase in bookings literally starting today."

Unvaccinated passengers too?

Wonder of the Seas pool deck

Depending on how much you want to dissect Mr. Liberty's words, it sounds like the company is looking to someday allow unvaccinated passengers of all ages onboard.

When Mr. Liberty said, "This means that we're transitioning to the point where everyone will be able to vacation with us while always working with our destination partners to meet their regulations," it sounds like it could point to allowing unvaccinated cruisers onboard.

Up until now, only unvaccinated guests under the age of 12 have been allowed on Royal Caribbean ships.

Time will tell.

Reader reactions

Allure of the Seas

As soon as news came out of the change, many cruisers shared their thoughts on the policy shift.

Certainly anyone with a short cruise booked was happy to see the change. Cinthya Rod wrote on the Royal Caribbean Blog Facebook page, "Great news! For our next cruise will be awesome."

Beth Coddington likes where the policy is headed, "That's a step in the right direction."

Explorer of the Seas docked

A number of cruisers questioned the logic of picking 6 nights instead of 7 nights.

Mark Middleton wrote, "What’s the difference, for testing purposes, between a six and seven night sailing? Many are seven nights so would be easier for that!"

Greg Crouch added, "Seeing as most Royal Caribbean cruises are 7 nights it's not an enormous difference for most of us. Test the unvaccinated and not boosted by all means."

Kelly Lene-Tarman shared her thoughts, "Instead of complaining about it only being 6 nights or less, or why not unvaccinated, etc., let's look at the positive in this. They are are doing this in small steps to see how it goes and if all works well, everyone will be welcome to cruise again!"

Royal Caribbean Group reports positive cash flow for first time since cruises restarted

In:
28 Jul 2022

Royal Caribbean Group reported its second quarter 2022 earnings on Thursday.

While the company still had a net loss of half a billion dollars, operating cash flow and EBITDA were positive for the quarter.

Royal Caribbean Group saw this quarter as "meaningfully ahead" of their projections, due to accelerating and strong close-in demand, further improvement in onboard revenue and better cost performance. 

Royal Caribbean Group President and CEO Jason Liberty saw two important takeaways from the fiscal disclosure, "We reached two important milestones in our recovery this quarter – returning our entire global fleet back to operations and delivering positive operating cash flow and EBITDA."

Cruise ship docked in Miami

He also sees strong demand for cruises, "Consumers' propensity to travel and cruise remains strong. We continue to see a robust and accelerating demand environment for cruising and on-board spend. Cruising remains a very attractive value proposition for vacationers, and today we have an opportunity to further close the value gap to other land-based vacation offerings."

The second quarter loss of $0.5 billion is better than the $1.3 billion loss in the second quarter of 2021.

Second quarter by the numbers

Oasis Lagoon pool

Load factors (meaning how full were the cruise ships) in the second quarter were 82% overall. June sailings reached almost 90%, with Caribbean itineraries averaging over 100%.

Based on the continued strength in consumer demand, the company expects load factors will average approximately 95% in the third quarter and increase to triple digits by year-end.

Total revenues per passenger cruise day were at record levels and up 4% as reported and 5% in constant currency versus the second quarter of 2019.

The referenced media source is missing and needs to be re-embedded.

Booking volumes received in the second quarter for the back half of 2022 sailings remained significantly higher than booking volumes received in the second quarter of 2019 for the back half of 2019.

The second half of 2022 is booked below historical ranges but at higher prices than 2019, with and without future cruise credits (FCCs).

For 2023, all quarters are currently booked within historical ranges at record pricing.

Royal Promenade on Adventure of the Seas

For the third quarter of 2022 and based on current currency exchange rates, fuel rates and interest rates, the company expects to generate approximately $2.9 billion - $3.0 billion in Total Revenues.

In terms of reducing costs, Royal Caribbean Group gave credit to the delivery of new, more efficient ships and past sales of less efficient ships, as well as actions taken to improve operating costs and margins that continue to materialize as operations ramp up.

Changing Covid protocols

Covid-19 antigen test

Mr. Liberty mentioned an upcoming change in Royal Caribbean's Covid-19 protocols based on the CDC announcement  it would end its Covid-19 program for cruise ships.

As part of their earnings statement, Mr. Liberty said, "Last week, the CDC ended its COVID-19 Program for Cruise Ships. Based on this change, we are continuing to adapt our protocols to align more closely with how the rest of society and other travel and leisure businesses are operating.

This means that we're transitioning to the point where everyone will be able to vacation with us while always working with our destination partners to meet their regulations. Starting Aug. 8, testing will be required for unvaccinated guests on all voyages and for vaccinated guests only on voyages that are six nights or longer. "

A look at bookings

Junior Suite on Symphony of the Seas

Second quarter 2022 bookings averaged 30% above 2019 booking volumes for 2019 sailings in the corresponding period in the second quarter with even greater strength in July. 

An interesting trend is that guests are still booking their cruises much closer to their sail date compared previous years. 

In addition, cancellation activity has now returned to pre-Covid levels.

Nice, France

Second half 2022 sailings are booked at higher prices than 2019, both including and excluding FCCs.

Europe has seen sluggish results due to Covid and the Russia-Ukraine war. Europe makes up about a third of the overall capacity.

As of June 30, 2022, the Group's customer deposit balance was $4.2 billion, a record high for the company. This represents an increase of about $600 million over the previous quarter despite the significant quarter-over-quarter increase in revenue recognition. 

Approximately 20% of the customer deposit balance as of the end of the second quarter is related to FCCs. Approximately 60% of the FCC balance accumulated since the start of the pandemic has been redeemed. 

Silversea's new ship comes with two years of no payments

Silver Endeavour

Earlier this month, Silversea purchased the Crystal Endeavor for $275 million, but won't make any payments on it for two years.

The transaction is fully financed through a 15-year unsecured term loan, guaranteed by the German export credit agency, Euler Hermes, and has no amortization payments in the first two years.

Silver Endeavour is scheduled to begin service winter 2022, spending its inaugural season in Antarctica starting November 2022.

Why Royal Caribbean's Wonder of the Seas may be the perfect cruise ship for a first timer

In:
27 Jul 2022

Are you someone that has never tried a cruise because you think cruise ships just aren't for you?

Wonder of the Seas aerial photo

I have friends and family that have felt this way for years out of concern that ships are overcrowded, isolated in the ocean, or otherwise bored. Regardless of the reason, they haven't tried a cruise yet because they believe it would not be a fun vacation.

Royal Caribbean (and the entire cruise industry) has worked for years to undo those beliefs, and one of the best ways has been to design and build new cruise ships that defy the notion of what you can do on a ship.

When I hear from new cruisers, many are astounded by how much there was to do onboard. Any fear of not having enough to do or feeling "trapped" are almost always brushed aside after they get home.

Wonder of the Seas aerial rear

If I had to pick a cruise ship for a non-cruiser to try, Wonder of the Seas is that ship because I think it has so many amenities onboard that they never expected.  If your idea of a great vacation is heading to a sandy beach, laying out by the pool, enjoying high-class entertainment, and plenty of food and drink options, then I think Wonder of the Seas may be the perfect first cruise ship for you.

The best suite experience in the fleet

Suite Sun Deck on Wonder of the Seas

If you elect to book a suite, you can look forward to the best end-to-end suite program on any Royal Caribbean ship.

When you book a Royal Caribbean suite, you're not just getting a large cruise ship cabin. You're also getting access to a number of services that other passengers do not have.

Suite guests have access to their own complimentary restaurant, suite lounge, and entire suite sun deck. 

Suite Sun Deck on Wonder of the Seas

Known as the Suite Neighborhood, this area is at the top of Wonder of the Seas and is where you'll find the suite lounge, Coastal Kitchen restaurant and pool area.

I think the sun deck is particularly compelling, because it is a sprawling space with loungers, bar, plunge pool and sweeping views.

Someone that hasn't cruised before may be drawn to booking a suite because they tend to stay in suites in hotels for bonuses that come with those rooms. Similarly, a cruise ship suite is about rewarding guests with added service that make the entire experience easier to enjoy.

Dining and food galore

Couple dining at Giovannis

Regardless if you're on a cruise ship or your hometown, everyone can enjoy a great meal.

Someone that has never cruised probably imagines a dining hall and buffet as what the cruise dining experience is like, similar in some regards to an all-inclusive hotel. While there is a buffet and main dining room on cruise ships, there is so much more than just that.

Royal Caribbean designed Wonder of the Seas so that there was a wide assortment of dining choices. First and foremost, they cannot have everyone onboard the ship eating at just a couple of restaurants. Moreover, Royal Caribbean knows they are competing against land resorts that have a variety of food.

Mason Jar chicken sandwich

On Wonder of the Seas, you have over 40 restaurants, bars and lounges to choose from, which means you can can visit six different places each day of the week.

There's Japanese hibachi, custom-made salads, New England style seafood, and a new Southern American restaurant that has barbecue pulled pork, fried chicken and crab beignets.

Hibachi

This isn't microwaved and/or pre-prepared food. Rather, chefs prepare all the food each day.

Fears that you will be stuck eating just at the buffet will quickly disappear once you discover all the choices on a ship like Wonder of the Seas.

Cocktails at the Vue Bar

If you enjoy a cocktail or two, Royal Caribbean offers over 400 different cocktails, wines, beers and zero-proof cocktails available. Of course, the bar staff can create almost any drink you like that isn't on the menu, so you just have to ask.

Teen club on Wonder of the Seas in Social100

Teens will love the fact there are zero-proof cocktails available in their own teen club area of the ship. 

Known as Social100's Patio, teens can check out the bar there that includes jumbo-size games, a private whirlpool, loungers and nooks.

The places you'll visit

Ship at CocoCay

Another fear new cruisers have is that they will feel trapped. Friends usually say, "I'd hate to be stuck at sea" and the reality is a cruise on Wonder of the Seas will take you to some gorgeous places.

On a 7-night cruise, you can expect to visit at least three ports of call, if not more. That means on most days of your cruise, you'll have to opportunity to disembark for the day and explore ports of call in the Caribbean.

When I first started cruising, I loved days we were in port because you would wake up and be somewhere new each day. 

Ship in Cozumel

You could enjoy the sandy beaches of Cozumel, Mexico, or walk the streets of Old San Juan. You might be able to drive an ATV, snorkel with marine life all around you, or learn about the history and culture of the people that call the port you are visiting home.

In short, there are a lot of amazing things you can do during your cruise while in port. Having more than half the days of your cruise include a port visit substantially helps reduce the feeling that you're relegated to the ship only.

Wonder of the Seas in CocoCay

No cruise aboard Wonder of the Seas is complete without a visit to Royal Caribbean's private island of Perfect Day at CocoCay. Other cruise lines have private islands, but none compare to the amazing upgrades Royal Caribbean has invested at CocoCay.

Perfect Day at CocoCay is not just a beach reserved for cruise ship guests. There's a water park, upgraded beach club, giant freshwater pool, and island food you actually want to eat.

Oasis Lagoon pool

And after a day of fun ashore, you get to come back to the cruise ship (just like a hotel) and enjoy evening dining and entertainment.

All this fun onboard and on shore means the time will pass quickly, and you'll find the week-long cruise flying by.

The best selection of activities on any cruise ship

Zip line on Wonder of the Seas

I'm going to make the bold statement that Wonder of the Seas has the best variety of entertainment and things to do of any cruise ship right now.

Royal Caribbean has a reputation for being the cruise line that packs their ships with the most "I can't believe you do that on a cruise ship" sort of activities.

Playscape on Wonder of the Seas

Families can choose between water slides, an open-air play area for younger children, 10-story dry slide that has lights and sound effects, and aqua park.

At night, there's three different venues performing various shows that are included with your cruise fare. 

inTENse show

Studio B has professional ice skaters that perform 365: The Seasons on Ice.  Using projection technology, the cast tells the story of Earth’s changing seasons.

Moving to the AquaTheater on the back of the ship, you'll be able to see an all-female cast perform inTENse that includes acrobatics, slacklining, high diving, tumbling, and synchronized swimming. 

The Royal Theater has two shows that have Broadway-style performances to enjoy.

If that isn't enough, there are comedy shows, a piano bar, live musical performances around the ship, and even movies by the pool to watch.

Women at the pool in a casita

The takeaway here is that there is so much to do onboard, and it's up to you how much (or little) you do. If you're worried a cruise ship means you'll be bored because the expectation is you alternate between sitting by the pool and eating, you'll be pleasantly surprised how much more there is to do.

Kids? No problem: Lots for adults

Vue Bar

Royal Caribbean is the best cruise line for families, and whether you have kids or not, there is lots to enjoy for adults on Wonder of the Seas.

If you do have kids, there is supervised kids programming in Adventure Ocean that is available for children as young as six months old, all the way up to 17 years old.

The nursery is available for kids between 6 and 36 months old for an addition cost. As a parent that has used the nursery extensively, it's worth every penny.

Adventure Ocean

Kids between 3 and 17 have their own supervised space, where they can play, dance, draw, and have fun with other kids their age. It's not just an enclave for children, it's an opportunity for them to do what they want, while you enjoy time alone to do what you want.

Besides the amazing restaurants you can choose from for date night, there's lots more you can do without any children on Wonder of the Seas.

First and foremost, there is an entire area of the pool deck reserved just for adults. The Solarium is an enclosed pool area with upgraded loungers. Because it's climate controlled, it's always the perfect temperature!

You'll also find arguably the best wine bar across any Royal Caribbean cruise ship with Giovanni's Wine Bar. Located in Central Park, Royal Caribbean revamped its wine bar experience with a new motif, and the added bonus of being able to enjoy many of the same foods you'd find in nearby Giovanni's Italian Kitchen without getting up from your seat.

You can visit the casino throughout the day or night, where you'll find plenty of slot machines, poker tables, blackjack, roulette, craps and more table games. For a lot of people, the casino fun is another way Royal Caribbean caters to parents while the kids are away.

If you prefer to pamper yourself, why not take a visit to the Vitality Spa, where you there are some truly amazing treatments to choose from, along with a full salon.

While not adults only, if you're cruising without kids, you might consider buying a pass to the Coco Beach Club at Perfect Day at CocoCay.

The Coco Beach Club is an upgraded beach day experience, complete with its own restaurant and infinity pool. Kids are allowed here, but most families end up elsewhere for the variety of things to do around the island. This means a great spot to spend your day and splurge a bit.

Infinity pool

If an adults-only beach area sounds like heaven, don't worry, because Royal Caribbean has your back.

Scheduled to open in late 2023, Hideaway Beach will be a new expansion area that will only allow adults in and offer yet-to-be-announced things to do.

Convinced yet?

Wonder of the Seas night lit up

If you gravitate towards booking a beach vacation or prefer to stay in a new hotel, and have not tried a cruise yet, Wonder of the Seas might be the perfect cruise ship for you.

Wonder of the Seas has the latest and greatest innovations and things to do, which rival much of what you can find on a land vacation. Better yet, a cruise includes much more in your base cost than a land vacation.

You're going to find plenty for everyone in your family to do. Other lines tend to cater to either mostly kids or mostly adults, but Royal Caribbean is far more even keeled at a price families can afford.

If you are one of those people that never considered a cruise vacation, Wonder of the Seas is the ship that could change your mind.

More cruise advice

Questions about cruises ahead of Royal Caribbean Group's earnings call this week

In:
26 Jul 2022

Royal Caribbean Group has scheduled an earnings call with investors later this week, which means we might get answers to a few hot button topics.

Wonder of the Seas aerial rear night

Royal Caribbean Group will release its second quarter 2022 earnings on Thursday, July 28, 2022. They'll subsequently hold a conference call with Wall Street analysts to discuss the results in greater detail.

On Thursday, there will be a lot of data shared, including information helpful to not just investors.

It's common for policy shifts, direction, and even new projects to get further detail during these calls. With so much change right now in the cruise industry, these calls are some of the best opportunities to get answers.

Perfect Day at CocoCay beach

It's impossible to know in advance which questions will get answers, but here is a wish list of questions cruise fans are eager to hear about during this week's earnings call.

Did Royal Caribbean become profitable again this quarter?

Whether you own stock or not, Royal Caribbean making money instead of losing money is important for the financial well-being of the company.

Since 2020, Royal Caribbean has been losing billions of dollars, but this might be the quarter where they turn the corner.

In the first quarter of this year, Royal Caribbean still lost a billion dollars, but operating cash flow turned positive in April 2022. Moreover, they said at that time they expected to return a net profit for the second half of 2022.

Side of Royal Caribbean cruise ship

Of course, there are going to be any number of negative factors that could offset profitability, including inflation, oil prices, supply chain issues, and weaker demand for cruises.

A profitable quarter is an important step towards shedding all the debt they accrued over the last two years.

What does the end of the CDC cruise ship program mean for testing and vaccine requirements?

If we took a poll of possible questions to be answered, I think Covid-19 protocols would win in a landslide.

Ever since the U.S. government announced it would end its Covid-19 program for cruise ships, many cruise fans have wanted to know what this means for the current rules and requirements.

Specifically, what, if anything, will change as it pertains to pre-cruise Covid-19 testing and/or vaccination requirements.

Woman with Covid-19 vaccine card

Currently, Royal Caribbean requires all guests, regardless of vaccination status, to get a Covid test done up to 2 days before sailing. Not only does this add stress of trying to find a testing site and living in limbo until the test results come back, but getting a negative test to travel is not required of any other form of leisure travel.

Likewise, the requirement all passengers must be fully vaccinated if over the age of 12 is another big question. 

Virgin Voyages in Miami

Some cruise lines have dropped testing requirements, such as Virgin Voyages and Margaritaville at Sea, but Royal Caribbean hasn't announced any changes.

In June, Royal Caribbean International CEO Michael Bayley said he expected pre-cruise testing, "is going to be around for another couple of months."

Read moreRoyal Caribbean CEO talks when pre-cruise Covid testing and vaccine mandate will last

Any Icon of the Seas hints?

Icon of the Seas plaque

We're half way through 2022 and still have no idea what Royal Caribbean's next new cruise ship will even look like.

Not only is the design of Icon of the Seas still under wraps, but there's no sense of when sailings might go on sale or other key details.

Royal Caribbean might be tempted to tip their hat at some details if it helps assuage analysts that a new ship will bring in lots of new business. Earnings calls are partially historical and forward looking.

While the past quarter's numbers are inflexible, Royal Caribbean Group executives can play up the future as rosy as possible in order to paint as positive a light as they can for better days ahead.

What has inflation's impact been on Royal Caribbean?

Symphony of the Seas in PortMiami aerial

Something every company is dealing with is the rate of inflation on business.

From fuel to food to salaries, there's an impact to be felt on anyone's bottom line.

Windjammer food on a plate

In the first quarter, Royal Caribbean said fuel and food costs were the primary inflationary problems they were dealing with.

In the short term, Royal Caribbean has 50% of its fuel hedged for this year and a smaller percentage for next year.

How to listen to the call

There will be full coverage of anything intriguing that comes out of Royal Caribbean Group's second quarter 2022 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.  The call begins at 10am Eastern Time on Thursday, July 28, 2022.

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

Royal Caribbean Post Round-Up: July 24, 2022

In:
24 Jul 2022

Happy Sunday! We hope you are having a great weekend! Now it’s time to sit back, relax, and catch up on all the Royal Caribbean news from the week!

The big news in the cruise world this week came when the CDC ended its voluntary Covid-19 program for cruise ships.

Allure of the Seas aerial rear

The U.S. Centers for Disease Control and Prevention (CDC) announced it will no longer report Covid cases on cruise ships, which includes the color-coded program that provided case numbers on individual ships.

In lieu of the program, the CDC will continue to publish recommendations, but it will ultimately be up to the cruise lines to implement their own protocols.

Royal Caribbean News

Video: 10 Tips To Save Anyone Time on a Cruise Ship!

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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 — 10 Tips To Save Anyone Time on a Cruise Ship! — and don’t forget to subscribe here.

Read our Mariner of the Seas live blog

We've been sailing on Mariner of the Seas this past week and sharing a daily look at what it's like onboard.

Matt and Angie are on an 8-night eastern Caribbean cruise that departed from Port Canaveral.

Guide to cruises to Greece

Have you dreamed of sailing to the Greek isles some day?

Whether you’re interested in touring the birthplace of the Olympics, swimming at world-renowned beaches, or strolling charming villages, visiting Greece is sure to impress.

Check out our Greek Isles cruise guide for everything you need to know for this type of sailing.

What's the difference between big and small Royal Caribbean cruise ships?

Does it really matter if you book a big cruise ship or a small cruise ship?

There are advantages and drawbacks to each size of ship, and it's important to know the differences between each one.

Before booking a cruise, you should know if you should choose a big ship or a small ship.

Mariner of the Seas Live Blog - Day 4 - San Juan, Puerto Rico

In:
21 Jul 2022

Next up in our port visits takes us to San Juan, Puerto Rico, but not until a bit later.

San Juan

The schedule has is in San Juan later in the day, so the first half of the day is more akin to a sea day.

I started things off as usual, grabbing a cup of coffee from Starbucks and going up to the pool deck. The morning breeze and lower temperature makes sitting in the adirondack chairs my favorite spot on Mariner of the Seas.

The Crown and Anchor Society Top Tier event was held today in the Royal Theater.

The Top Tier event is where the ship's staff thanks the cruisers onboard with the most loyalty reward points. It's nice to be recognized for being a loyal customer.

Immediately after we went to Cafe Promenade for a "pizza brunch" event, where chit chatted with a slice of Sorrento's Pizza.

After the event, we headed to the main dining room for lunch. 

Since we weren't due into San Juan until later in the afternoon, I decided a nap was a good idea.

Mariner of the Seas pulled into San Juan right around 3pm, and docked downtown.

We had no tour booked, so let everyone else disembark first, and then walked off the ship to start our explorations. 

Read more7 ways to have a great time in port without a cruise ship shore excursion

It's very easy to walk around San Juan because the ship docks downtown and Old San Juan is fairly small.

We walked from the ship in the direction of the two Spanish forts, with a stop along the way anytime the kids spotted a stray cat.

Even at 4pm, it was very hot out still, so when we got to El Morro, it was great to have a very strong breeze to cool down.

We wanted to have dinner in San Juan, and tried one restaurant we had been to in the past, but they were at capacity. They recommended La Mallorquina, which happens to be the oldest restaurant in San Juan.

Their menu was primarily Puerto Rican food, but they had just enough variety for the pickier eaters to enjoy.

I went with mofongo, which is made with fried green plantains that are then mashed with garlic and topped with your favorite type of meat. 

Once the sun set, it became far more comfortable outside. We took the kids to Himalaya Ice to enjoy ice cream before heading back to the ship.

Back onboard, we went to watch sailaway. Whether sailing in or out, San Juan is very pretty. Since it was night, we got to see the city lit up on our departure.

We wrapped up our night with music in the pub.

Tomorrow we will be in St. Kitts.

7 ways to have a great time in port without a cruise ship shore excursion

In:
20 Jul 2022

Most people will look to book a tour of some kind to go on while their cruise ship is in port, but you don't need an excursion to have an enjoyable day.

Cozumel coast with restaurants and bars

Shore excursions are a popular way to see the top tourist sights that any port has to offer, and it's definitely the right approach for knocking out these must-see places.

However, there is sometimes a port of call on a cruise where for one reason or another you opt not to book anything. Perhaps you've been there a few times already, or the weather doesn't look great, or you just need a break after port visits the previous couple of days.

Whatever the reason, there can be fun things to do in every port your cruise ship visits without a formal tour or plan.

Ship in Cozumel

Depending on the port, there can be more options than others. In some ports, the cruise ship will dock directly in a city, whereas others, the ship docks further away. Even the most rudimentary cruise ports usually have a few things worth doing, so I wanted to highlight suggestions for how to get off the ship and explore just a little bit without a plan.

Here's my list of seven ideas for how to have fun in a port without any excursion booked.

Drink for cheap at a bar

If you skipped a Royal Caribbean drink package but want to enjoy tropical drinks, going to a bar in port can save you a lot of money.

In the Caribbean especially, drinks will cost you significantly less than on your cruise ship. Not only is each beer and cocktail likely cheaper, there are usually better specials and larger drink sizes.

I have yet to find a port that a cruise ship visits without at least one bar somewhat near the port. Most ports that cruise ships visit have a port area, which is a secured area enclosed from the rest of the city or island. In this area, there are all sorts of vendors and bars are included.

Pirate Republic brewery

Some bars are steps away from the security checkpoint to get back onto the ship, which means there's no way you are missing the ship and minimal effort to get to and from the bar.

Find free wifi

Whether you bought an internet package on your ship or you're ready for "real" internet that doesn't take a minute to load that funny gif your sister sent you, there's usually plenty of places in port offering wifi access.

Just like the drink at the bar tip I just covered, you can usually find complimentary wifi at many bars and shops in port.  Some will require a password, which usually means buying something. Stop in for a drink, but stay for the wifi.

A good idea is to ask a crew member onboard the ship for places to go with free wifi, as crew members regularly visit these ports and seek out the internet too.

Ask locals for a nearby beach

Depending on the port you visit, there can be a beach you could walk to from where your ship docks.

This isn't possible in all ports, but sometimes there is a nearby beach. A good idea is to ask a local in the port for suggestions. 

Keep your expectations in line, as the closest beach may not be the most pristine stretch of sand and water you've ever seen, but you also didn't have to pay for a tour either.

Here are a few easily walkable beaches from select Caribbean ports:

  • Nassau: Junkanoo Beach
  • St. Maarten: Great Bay Beach
  • Cozumel: El Cid La Ceiba Hotel

Have lunch

A favorite to-do in any port if all I want to do is feel like I got off the ship and did something is to find a spot for lunch.

Just like the bars, there's usually a few restaurants in close proximity to where the cruise ships dock.

In cities like San Juan, Puerto Rico or Cozumel, there's far more choices than other ports.

Most serve up enough variety for the pickiest eaters. In fact, restaurants near the ships tend to offer more American food than authentic local cuisine, so don't worry too much about having to eat anything unusual.

If you are in the mood for authentic local cuisine, it would be a good idea to ask one of the vendors in the port for a suggestion. 

Be sure to bring cash, as credit cards are not always accepted.

Listen to live music

Planning a Royal Caribbean cruise: Roatan | Royal Caribbean Blog

Another good idea for something different to do is find a musical act performing in port.

It's been my experience there are different musicians that perform in port for cruise ship passengers as they come and go.

Generally, you'll find most musical acts in the first few hours the ship docks and then again before the ship leaves because that's when foot traffic is highest in the port area.

Ideally, find a nearby bar you can sit at and enjoy the tunes. Be sure to bring some small change to tip the musician after enjoying the performance.

Go for a run

Oasis of the Seas Live Blog - Day 3 - Costa Maya | Royal Caribbean Blog

If you like to jog, maybe take a break from the cruise ship running track and go for a run in port.

It's a good idea to research in advance where you can safely run near the port. Not all ports may have an area you can start running. Many places cruise ships visit are industrial ports, or simply not in an ideal part of town.

If nothing else, a short taxi ride should get you to a park, boardwalk, or good starting point.

Go to a supermarket

La Mega in Cozumel

One of my favorite DIY shore excursions is to go to a local supermarket and browse what they have.

This is a really fun shore excursion to do in a different country because it provides a lot of insight into the destination.

You can browse the aisles and see what is for sale, who is shopping, how much things cost and how to buy things. What is the popular snack food? How are things packaged? You will learn so much by lurking in the supermarket.

Read more6 things that happen on a cruise that nobody talks about

You'll probably need to take a taxi to get a supermarket.

Mariner of the Seas Live Blog - Day 3 - Labadee

In:
20 Jul 2022

The first port of call on our Mariner of the Seas cruise is at Royal Caribbean's private destination in Haiti, known as Labadee.

Mariner of the Seas in Labadee

This was a full day visit, so we got the kids up and going with breakfast in the Windjammer so we could get off the ship and enjoy our day.

I booked cabana at Barefoot Beach prior to the cruise, which is the area of Labadee reserved for suite guests. About a week or two before the cruise, the cabanas here appeared on the Cruise Planner site.

When we got onboard the ship on the first day, I stopped at the Shore Excursion desk to ask if this was going to be a problem since I was not in a cabana. The staff informed me they had decided to open up the Barefoot Beach cabanas to all guests to book, so we were good to go.

The ship was cleared at 8:30am and we walked off around 9am.

The sun was shining and we headed to Barefoot Beach. 

There are three types of Barefoot Beach cabanas: Beach, Hilltop and Over the Water. We booked an over the water cabana.

Cabana number 4 is to to the right of the beach, and has steps adjacent to the cabana leading into the water.

The water temperature was perfect, and as the morning went on, the temperature started to rise and being in the water became a necessity.

At 11am, the group met up at one of the bars to enjoy the signature cocktail of Labadee, the Labadoozie. 

Unlike the cabanas at nearby Nellie's Beach, lunch was served in Barefoot Beach at a buffet towards the back of the area.

You'll find your typical beach lunch here, with chicken, burgers, and hot dogs. I recall the Barefoot Beach lunch had different options, like lobster or steak, but not today.

We ate lunch, and then took my oldest daughter to try something new to us: Sip and Paint.

Available to book through Royal Caribbean, there is about a 90 minute painting experience where you can paint a object while enjoying beach cocktails.

It's located on a hill near the entrance area, which has a fantastic breeze that made it incredibly comfortable despite the afternoon heat. I wouldn't have minded a hammock up there for a nap.

Each person has a choice to paint a clay pot or a wooden boat. Paint and a smock are provided, along with stencils.

Adults are served rum punch, while kids get fruit punch.

This was a nice change of pace from the usual beach day fun, and my daughter really enjoyed getting a creative break inbetween beach time.

After the painting, it was back to the beach to enjoy the rest of our afternoon.

Unfortunately, my oldest daughter got stung by something while in the water. It wasn't clear if it was a jellyfish or beach lice, but it hurt her quite a bit.

The lifeguard showed up immediately with vinegar spray, but it didn't help.  So we took her to the nearby first aid station.

To my surprise, there was a doctor on duty who triaged the situation and cleaned the area on her leg, and used hydrocortisone cream on it before giving her benadryl and motrin to help with the pain. No cost for the care.

It a little while, but the pain started to subside a bit, but going back on the ship so she could properly shower and use more of the hydrocortisone cream was the best idea.

They took her on ATV back to the ship and the hot water of the shower helped a lot.

We went to the main dining room for dinner. Since it's a group cruise, there are a series of tables together for everyone in the group to dine together.

Whenever I eat in the main dining room for dinner, I ask for Indian curry and they had two wonderful vegetarian options. One was chana masala (chickpeas) and the other was something else that I did not know the name, but it was wonderful.

I also sampled one of my favorite things on the main dining room menu, spaghetti bolognese.

I also couldn't resist a bowl of French onion soup.

After dinner, the kids went to the room to watch some movies and the adults were back in the pub on the Royal Promenade to see the pub singer, Darla. A good time was had by all.

Tomorrow we will be in San Juan, Puerto Rico.

Stray Observations

I really love Mariner's elevators show which floor is next.

The wifi speeds on Mariner are nothing special, but it's been very serviceable. Certainly good enough to get the basic internet stuff done.

Mariner of the Seas Live Blog - Day 2 - Sea Day

In:
19 Jul 2022

We began our cruise with a sea day with a bright sky and lots to do onboard.

Sea day on Mariner of the Seas

I was happy to see quite a lot of activities offered onboard, so we started off with breakfast in the Windjammer once I could get the kids up and going.

There's a waffle station for breakfast, which is fantastic.

With the sea breeze on the pool deck, it was a nice start to the day and a lot of people decided to head up to the pool deck.

There's a Starbucks kiosk on Mariner of the Seas, so I decided to get an iced coffee from there. It's not included in my drink package, but I greatly prefer their iced coffee taste to what Cafe Promenade.

Our morning was fairly quiet, and we had our first group cruise event, where we played a Royal Caribbean edition of "Super Password", the classic 70's and 80's game show.

We had a conference room rented for our group, so we held our version in there.  For fun, here's a copy of the clues you can challenge your kids to:

  1. Parade
  2. Walkway
  3. Sorrentos
  4. Pub
  5. Neighborhood

Can you guess it? Royal Promenade!

At lunch, we had a private meal in the main dining room and got to enjoy the same lunch menu as The Key guests receive, which is essentially Chops Grille.

I had the steak burger, and it definitely hit the stop.

I headed back to the room after lunch to relax for a bit and then it was time to do a bar crawl around the ship.

A fun group cruise event is to go from bar to bar and explore the ship, while having a drink in each bar and hanging out with each other.

We ended up going to seven bars in a little over an hour. The bar service on Mariner has been fantastic. Little to no waits at all.

Dinner is our second night of the three night dining package, and we headed up to Jamie's Italian.

I think the best part of the menu at Jamie's are the appetizers.

When we got out of dinner, I headed to the casino to spend a little money. The craps table was very kind to me, and I did well for myself.

Our evening entertainment was in the Royal Theater to see "Gallery of Dreams". I'm not sure if I've seen this show before, but it's a collection of popular songs that the cast sing and dance to. 

There was a lot of energy, and at the very least, I knew the words to almost all the songs.

Tomorrow is our first port stop, and we'll be in Labadee.

Stray Observations

I met Captain Panos!

There was silent disco held on the Royal Promenade for families in the afternoon

In case you're wondering, Playmakers had the right TV feed to be able to show the homerun derby.

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