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Skip Royal Caribbean’s Liberty of the Seas on May 19 in Miami Beach, Fla.
Cliff Hawkins / Getty Images
Royal Caribbean Group CEO Richard Fain continues to see a slow return to business, at least initially, if that happens.
Several companies have started operating cruises in Asia and Europe with scaled-down passenger crews, including several affiliated with Royal Caribbean. In an interview with Barron’s On Monday, Fain said he was encouraged to see these cruises begin and that “we will learn from them.”
Fain, the company’s CEO since the late 1980s, spoke with Barron’s after the company released its revenue in the second quarter.
The company reported a loss of $ 7.83 per share on a generally accepted basis of accounting principles, compared to plus $ 2.25 in the corresponding quarter a year earlier. The stock closed Monday at $ 57.31, 10% up on the day when investors cheered positive comments about 2021 Royal Caribbean bookings, especially in the second half of the year.
Meanwhile, all Royal Caribbean Cruises (ticker: RCL) were canceled in the second quarter due to the global pandemic, which shut down the sector in mid-March.
Royal, the second-largest of the top three U.S. cruise operators, does not plan to restart most of its cruises until Oct. 31, though that will depend on what the Centers for Disease Control and Prevention decides. .
The CDC, which oversees U.S. ports, has a no-sail order in place until Sept. 30. Royal Caribbean has partnered with rival Norwegian Cruise Line Holdings (NCLH) to glean and confirm health and safety protocols. That panel is expected to have some recommendations later this month.
“It’s not just a question of protocols we put in place,” Fain said. ‘It’s relevant to how prevalent [Covid] is in society. If there is a high prevalence level, no protocols are adequate. But with more reasonable prevalence, you can lower the risks. ”
Fain declined to discuss many specifics about what the new protocols will look like.
“We’ll see differences, but I think it’s all part of the evolutionary state of cruising,” he said. “Just as flying is now different after 9/11, cruising will be different to Covid-19. But it will still be cruising. ”
One difference will be the so-called “pattern drills”, in which customers typically gather in groups aboard a cruise ship shortly after boarding to learn from crew members about emergency procedures. But nowadays, much of this can be handled on an app and in a customer’s booth, Fain said.
Fain said he was encouraged by booking activity. CFO Jason Liberty told analysts on Monday that the first quarter of 2021 was softer, but that bookings were much stronger in the second half of next year.
The company is seeing more interest from customers who have already taken cruises, Fain said. “That’s not too surprising.”
As of June 30, the company’s liquidity was about $ 4.4 billion, but there has been speculation that Royal Caribbean will raise additional capital, possibly before the end of the year.
“If there is an opportunity to add to our liquidity, I think it’s something we’ll take a good look at,” he said.
Royal Caribbean’s share has been down 45% year-on-year so far.
Write to Lawrence C. Strauss at [email protected]
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