Royal Caribbean CEO Richard Fain told CNBC on Monday that the cruise operator saw a series of optimistic signs in its early booking data that suggest a positive recovery from the coronavirus pandemic.
“Some of the things that we thought would happen are not happening. They are better than we thought,” said Fain in an interview with CNBC’s Seema Mody.
The age of customers who sign up for travel is an example that the reality differs from the company’s expectations, according to Fain. “We really thought that the elderly would be more cautious. It turns out that they want to leave the house too,” said Fain, explaining that a likely factor is that the elderly have priority access to Covid vaccines.
The history of cruises is another unexpected feature of customers who book trips, said Fain, who has been running Royal Caribbean for more than three decades.
“We think almost everyone would be an experienced cruiser, because they are the ones who understand cruising and are eager to get back,” said Fain. “Still, in our Singapore operation, 80% of our guests are newbies. So we are getting a lot of surprising data as things go, and they are mostly positive.”
In December, Royal Caribbean’s Quantum of the Seas started operations in Singapore. And since November, TUI Cruises, a Royal Caribbean affiliate, has had three ships sailing in the Canary Islands. But most of the time, the cruise industry was inactive for almost a year while the coronavirus swept the world and governments imposed restrictions on navigation. In the United States, operations remain suspended due to an order from the Centers for Disease Control and Prevention.
Royal Caribbean’s shares rose on Monday after the company’s fourth quarter results were released. In addition to reporting a less-than-expected loss, investors were also rooting for the booking insights offered by Royal Caribbean. The Miami-based company indicated that reserve prices were higher than pre-pandemic levels, although they were within historical volume limits.
Royal Caribbean reported a net loss of nearly $ 5.8 billion in 2020 over total revenue of $ 2.2 billion. The company raised about $ 9.3 billion in new capital during the year, including debt offers and a $ 1 billion share 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 accumulated enough liquidity … so that we can afford to not have to deal with a crisis, but to gradually improve our liquidity, our financial health, because we want to get back to investment grade as fast as we can,” he said Fain.
Fain said he believed that “serious talk” about resuming cruise travel from US ports could begin if coronavirus cases in the U.S. continue to fall as they have been and when a wider portion of the American population is vaccinated against the disease. Covid.
The chief executive said that Royal Caribbean and its advisory panel Healthy Sail, along with the CDC, agree that there is no single metric related to Covid that would represent a green light to return to the waters.
“You look at all of this. You look at what we can do to protect people – what the vaccine does, what the test does and all of that together. I think we’re getting close to the time when these things are working together, “Fain said. “Unfortunately, there is no magic limit that says, ‘Now is the day.'”
The primary focus of Royal Caribbean’s health protocols is what to do when there is a positive Covid case on board, said Fain. “There will be cases on a ship, just as there are always cases in a society. Our job is to ensure that cases remain and do not become an outbreak, ”said Fain, emphasizing the need for isolation. “I think that’s where the Healthy Sail Panel came from. That’s a lot of our discussion with the CDC and others, and vaccines are a big part of that.”