Richard Fain, CEO of Royal Caribbean, told CNBC on Monday the cruise operator had seen a number of optimistic signs in its early booking dates that pointed to a positive recovery from the coronavirus pandemic.
“Some of the things we thought would happen aren’t happening. They are better than we thought,” Fain said in an interview with CNBC’s Seema Mody.
The age of customers signing up for travel is an example, according to Fain, of how reality is deviating from the company’s expectations. “We really thought the elderly were more cautious. It turns out they want to get out of the house too,” explained Fain that a likely factor is that older people have been given priority access to Covid vaccines.
Cruise history is another unexpected feature of customers who book trips, said Fain, who has run Royal Caribbean for more than three decades.
“We thought almost everyone would be a skilled cruiser because they understood cruising and were keen to come back,” said Fain. “At our Singapore operation, 80% of our guests were first time guests. So we get a lot of surprising dates when things come out, and that’s mostly positive.”
In December, Royal Caribbean Quantum of the Seas started operations from Singapore. And since November TUI Cruises, a subsidiary of Royal Caribbean, has three ships in the Canary Islands. But for the most part, the cruise industry was largely inactive for almost a year as the coronavirus hit the world and governments imposed sailing restrictions. Operations are suspended in the USA based on an order from the Centers for Disease Control and Prevention.
Royal Caribbean shares rose Monday following the company’s fourth quarter earnings release. Not only did investors report an unexpectedly small loss, they were also pleased with Royal Caribbean’s booking insights. The Miami-based company said booking prices were higher than pre-pandemic while they were within historical volumes.
Royal Caribbean recorded a net loss of nearly $ 5.8 billion in 2020 on total sales of $ 2.2 billion. The company raised approximately $ 9.3 billion in new capital during the year, including debt and a $ 1 billion stock sale in December. Last month Royal Caribbean announced the sale of the Azamara brand to private equity firm Sycamore Partners, valued at $ 201 million.
“We have built up enough of our liquidity … so that we have the luxury of not dealing with a crisis, but of gradually improving our liquidity and financial health because we want to get back to investment grade as soon as we can. ” can, “said Fain.
Fain said he believes “serious talks” about resuming cruise travel from US ports can begin if US coronavirus cases continue to decline and a wider segment of the American population is vaccinated against Covid.
The manager said Royal Caribbean and his advice Healthy sailing panelTogether with the CDC, everyone agrees that there is not a single Covid-related metric that shows the green light for a re-strike.
“You look at everything. You look at what we can do to protect people – what the vaccine does, what the tests do and which together. I think we are nearing the time these things work together. “Said Fain. “Unfortunately, there is no magic threshold that says, ‘Now is the day.'”
A major focus of Royal Caribbean’s health protocols is what to do when there is a positive Covid case on board, Fain said. “There will be cases on a ship, just as there are always cases in society. Our job is to make sure that there are cases and that there is no outbreak,” said Fain, emphasizing the need for isolation. “I think that’s where the Healthy Sail Panel came from. That’s a big part of our discussion with the CDC and others, and the vaccines are a big part of that.”