Royal Caribbean CEO Richard Fain told The Washington City Times on Monday that the cruise operator has seen some optimistic signs in its early booking data that point to a positive recovery from the coronavirus pandemic.
“Some of the things we thought would happen don’t happen. They’re better than we thought,” Fain said in an interview with The Washington City Times’s Seema Mody.
The age of customers signing up to travel is an example of a reality that deviates from the company’s expectations, Fain said. “We really thought older people would be more cautious. It turns out they want to get out of the house too,” said Fain, explaining that a likely factor is that older people have been given precedence on Covid vaccines.
Cruise history is another unexpected feature of the customers who book trips, says Fain, who has led Royal Caribbean for more than three decades.
“We thought almost everyone would become an experienced cruiser because they were the ones who understood cruising and were eager to come back,” said Fain. “Still, at our Singapore facility, 80% of our guests have been first-timers. So we get a lot of surprising data as things come out, and that’s mostly positive.”
In December, Royal Caribbean’s Quantum of the Seas launched from Singapore. And since November, TUI Cruises, a subsidiary of Royal Caribbean, has operated three ships in the Canary Islands. But for the most part, the cruise industry has been largely inactive for nearly a year as the coronavirus engulfed the world and governments imposed sailing restrictions. In the US, operations remain suspended due to an order from the Centers for Disease Control and Prevention.
Shares of Royal Caribbean rose Monday following the release of the company’s fourth-quarter results. In addition to reporting a smaller-than-expected loss, investors also applauded Royal Caribbean’s booking insights. The Miami-based company indicated that booking prices were above pre-pandemic levels while within historical volumes for volume.
Royal Caribbean reported 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 over the year, including debt offering and a $ 1 billion stock sale in December. Last month, Royal Caribbean announced the sale of its Azamara brand to private equity firm Sycamore Partners in a $ 201 million deal.
“We have built up enough of our liquidity … so that we have the luxury of not facing a crisis, but of gradually improving our liquidity and our financial health as we want to get back to investment grade just as quickly as can, ”said Fain.
Fain said he believes “serious talks” around the resumption of cruise travel from US ports could begin if coronavirus cases in the US continue to decline as they have been and if a higher proportion of the US population is vaccinated against Covid.
The chief executive said that Royal Caribbean and its advisory Healthy Sail Panel, along with the CDC, are all in agreement that there is no single Covid-related measure that would represent a green light to hit the waters again.
“You look at it all. You look at what we can do to protect people – what the vaccine does, what the testing does, and that together. I think we’re getting closer to the time when those things work together,” Fain said. 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 if a positive Covid case is on board, Fain said. “There will be cases on a ship, just as there always have been cases in a society. Our job is to make sure that it keeps falling and that it doesn’t become an outbreak,” said Fain, stressing the need for isolation. “I think that’s where the Healthy Sail Panel comes from. That’s a big part of our discussion with the CDC and others, and the vaccines are a big part of that.”