Royal Caribbean considering passenger vaccines and ship sales despite surge in demand

Royal Caribbean Cruises, the parent company of Royal Caribbean International and Celebrity Cruises, announced higher than anticipated demand for 2022 cruises during its business update call, while also discussing vaccines for passengers and ship sales.

Royal Caribbean said it was still assessing the viability of requiring all passengers to be vaccinated pre-cruise, and commented on the likelihood of further sales of cruise ships, while also reporting strong bookings for 2022.

Royal Caribbean says booking numbers and revenue are up for 2021 and 22 compared to 2019 and 2020.

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“Despite the lack of marketing spend, we have seen a 30% increase in new bookings since the beginning of the year when compared to November and December,” said Jason Liberty, Chief Financial Officer, Royal Caribbean Cruises, during the call.

Liberty added that pricing on these bookings is also higher than 2019 even when taking into account the dilutive impact of future cruise credits.

As for when the cruise company’s brands might be able to resume services, Royal Caribbean, like other cruise companies, said it was assessing the impact of the vaccine roll out and how this might affect its plans.

Royal Caribbean last year sold Majesty of the Seas and Empress of the Seas.

Royal Caribbean this week cancelled all scheduled cruises through May, 2021.

According to Group Chairman and CEO Richard Fain, the work of the Healthy Sail Panel in 2020 was pre-vaccine and the rollout of a vaccine changes things.

“We’re really in an interim period where the vaccines are still relatively new,” Fain said. “They’re coming out amazingly quickly, but it still is going to take months to get huge numbers of people vaccinated.”

“And so we and the CDC and governments around the world are looking at how that would change it. And we don’t have answers yet,” he said.

All passenger will need to take a COVID-19 test prior to embarkation but Royal Caribbean has not committed to requiring vaccines for guests.

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Fain, like Norwegian Cruise Line Holdings CEO Frank del Rio, would not commit to requiring a COVID-19 vaccine for passengers, saying that the efficacy of the vaccines would need to be established first.

He said Israel, where the vaccination level is among the highest in the world, would be an important case study.

“They’re able to make some very significant statistical correlations,” Fain said. “And one of the things that you’ve seen coming out of there, for example, is that the number of people who get the disease, or who have been vaccinated, is the efficacy is as high or higher than the trials that were done, and this is now on larger numbers of people. So that makes it even more reliable.”

“But more significantly, they’re also saying the ability to prevent the disease being serious in people is even better than that,” he added.

“So these are … really exciting levels that give us all a lot of hope. But we really need to see it in practice, and it’s really hard to say while we’re not yet at a point where enough people have been vaccinated that you could say, okay, everybody onboard will have to be vaccinated,” he said.

Royal Caribbean sold its Azamara cruise brand earlier this year.

When it comes to selling more cruise ships, Royal Caribbean said it would continue to look for strategic opportunities, but was not looking to offload tonnage purely to conserve cashflow.

“For us, selling a ship is less about the cash that we would receive and more strategic… whether we think this ship in its current state can fit our brand long-term,” said Liberty.

“So we continue to evaluate opportunities that come our way, but we don’t have any specific plans or a specific goal in mind here,” he said.

Last year, Royal Caribbean Cruises shed its Spanish cruise brand Pullmantur, and later sold Empress of the Seas and Majesty of the Seas from its flagship Royal Caribbean International brand, before this year selling its premium cruise line Azamara.

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