Royal Caribbean COVID-19 Impact

Royal Caribbean Group reported financial results on Monday for the fiscal year of 2020 and commented on the business considering the global COVID-19 pandemic.

 "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." 

Full Year 2020 results: 

As part of the global containment effort resulting from the COVID-19 pandemic, the Company implemented a voluntary suspension of its cruise operations beginning March 13, 2020, which has been extended for most ships through at least April 30, 2021. 

For the full year, the Company 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. The Company 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.

Healthy Return to Sailing

Royal Caribbean continues to collaborate with the Healthy Sail Panel, epidemiologists, health authorities and various governments around the globe to ensure a healthy and safe return to cruising for guests, crew and the communities visited. The Company also continues to prepare and develop its plan to meet the Framework for Conditional Sailing Order issued by the U.S. Centers for Disease Control and Prevention (CDC) for US sailings. Meanwhile most sailings remain suspended.

In December, Quantum of the Seas started operating out of Singapore.  The CDC has requested Royal Caribbean provide information about two of their COVID-19 safety technologies being used on Quantum.  We wrote about the first one, Muster 2.0 in a previous post.  With that technology, passengers no longer gather in large groups to complete the mandatory safety drill before sailing.

The second technology, the Tracelet™ is a patented technology which allows for contact tracing.

 

What is a Tracelet™? 

Tracelet™         Courtesy Royal Caribbean Singapore

Who needs to wear it? 

What if I cannot wear it on my wrist? 

According to Royal Caribbean's Singapore website, the Tracelet™ is a comfortable, water-resistant, hypoallergenic wearable worn by all guests and crew during the cruise. The Tracelet™ helps us with contact tracing in the unlikely event of an onboard health concern. Therefore, everyone onboard regardless of age, needs to wear it. 

Should you be unable to wear it on your wrist, we will find another way for you to wear it. Any guest who chooses not to wear the Tracelet™ will be unable to sail.

The press release also details financial steps taken by the company and details the impact on past and future bookings.  Read entire Press Release here.

Looking to 2022

Royal Caribbean has released its Short Caribbean sailings for Summer 2022 - Winter 2023, which are now available for booking.  Three Freedom class ships, Freedom of the Seas, Independence of the Seas, and Liberty of the Seas will operate from Florida and sail 3-4 night cruises to the Bahamas including a stop at their private island sensation Perfect Day at Coco Cay.

Mariner of the Seas will sail 4-5 night cruises to the Western Caribbean and Perfect Day at Coco Cay from Port Canaveral.  Adventure of the Seas and Grandeur of the Seas will offer short cruises from Galveston.  Brilliance of the Seas and Rhapsody of the Seas will sail 4-5 night cruises to Western Caribbean from Tampa.

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Reading Between Lines of Carnival Corporation 3rd Quarter Earnings

Carnival Corporation & PLC is a global cruise company and one of the largest vacation companies in the world. Their portfolio of leading cruise brands includes Carnival Cruise Lines, Holland America Line, Princess Cruises and The Yachts of Seabourn in North America; P&O Cruises, Cunard Line and Ocean Village in the United Kingdom; AIDA in Germany; Costa Cruises in Southern Europe; Iberocruceros in Spain; and P&O Cruises in Australia.



Carnival Corporation & PLC (NYSE/LSE: CCL; NYSE: CUK) reported net income of $1.3 billion, or $1.62 diluted EPS, on revenues of $4.4 billion for its third quarter ended August 31, 2010. Net income for the third quarter of 2009 was $1.1 billion, or $1.33 diluted EPS, on revenues of $4.1 billion.

Carnival Corporation & plc Chairman and CEO Micky Arison noted that earnings per share for the third quarter 2010 increased 22 percent over 2009 and were just 3 percent shy of third quarter record profits. The third quarter 2010 operating results were significantly better than anticipated in the company’s June guidance due to the combination of higher than expected revenue yields and lower than expected unit costs.

Commenting on the third quarter, Arison said, “Despite ongoing economic concerns, cruise ticket prices remained strong close to sailing rewarding consumers that booked early. We enjoyed robust demand across all products during our seasonally strong summer period. Our North American brands experienced a significant rebound in peak season revenue yields, increasing more than 10 percent over weak 2009 comparisons.

Revenue yields for our European brands, which absorbed an 8 percent capacity increase, were up 1 percent (constant dollars) cycling relatively strong performance in the prior year. At the same time, our ongoing cost control efforts continued to bear fruit as we drove down operating, selling and administrative costs globally.”

Book Early for Best Prices

There were some key points in the press release from Carnival.   Note that the cruise price close to the actual sailing date stayed strong which means that the early bird gets the worm and those thinking they'd get some sort of last minute deal were very disappointed.   This is no surprise to us.    We have been advising our clients to book early and not to expect last minute discounts. 

People are Vacationing Again

The North American brands continue to perform well as customers return to the seas in hopes of some tranquil waters away from their daily grinds.  Cruising continues to offer great value for your dollar.

Arison noted, “The booking environment has remained solid and we expect revenue yields to continue to improve in 2011 and beyond as the economy regains its footing. Consumers continue to embrace vacations as a much needed escape from the rigors of daily life, while cruising remains an increasingly attractive option for those seeking greater value for their vacation dollar.”

Carnival Corporation Adds New Ships

Continuing with its strategic growth initiatives, the company took delivery of Holland America Line’s 2,106-passenger Nieuw Amsterdam, and signed a new ship order with Germany’s Meyer Werft for the construction of a 2,192-passenger cruise ship for AIDA Cruises to be delivered spring 2013. This marks the seventh new ship ordered for the flourishing German cruise market in the past six years. 

During the fourth quarter Cunard Line’s 2,092-passenger Queen Elizabeth will be christened by Her Majesty Queen Elizabeth II in a much anticipated ceremony in Southampton, England. This will be the sixth ship to be delivered this year furthering the company’s strategy to expand its global presence.

What Does Added Capacity Mean

Carnival Corporation is not the only cruise line that has added new ships to their inventory in recent years.  The extra capacity should mean competitive pricing for Winter months as most ships reposition to the Caribbean for those cold months.   We suggest booking when you see what sounds like a good deal, because as the ships fill up, pricing will continue to rise to help maintain record profits.

CLIA's WLCN is just days away -- watch for special offers from Carnival and the other cruise lines.  It is wise to work with a cruise specialist to be sure you are getting the right cruise for you at a value.