Royal Caribbean CEO Richard Fain told CNBC on Monday that the cruise operator saw a number of optimistic signs in its early booking data suggesting a positive recovery from the coronavirus pandemic.
“Some of the things I thought was going to happen aren’t happening. They’re better than I thought,” Fain said in an interview with Seema Mody on CNBC.
The age of customers who sign up for trips is an example of how reality has diverged from the company’s expectations, according to Fain. “We really thought that the elderly would be more cautious. It looks like they want to leave the house as well,” Fain said, explaining that a likely factor is that the elderly have been given priority access to Covid vaccines.
The history of cruises is another unexpected feature of customers making travel reservations, said Fain, who has led Royal Caribbean for more than three decades.
“I thought almost everyone would be an experienced cruiser, because they are the ones who understood the cruise and were looking forward to coming back,” Fain said. “However, in our Singapore operation, 80% of our guests were first. So we get a lot of surprising data as things come out and are mostly positive.”
In December, Royal Caribbean’s Quantum of the Seas began operations in Singapore. And since November, TUI Cruises, affiliated with Royal Caribbean, has three ships sailing in the Canary Islands. But for the most part, the cruise industry has been largely inactive for nearly a year, as the coronavirus has swept the world and governments have imposed navigation restrictions. In the US, operations remain suspended due to an order from the Centers for Disease Control and Prevention.
Shares of Royal Caribbean rose on Monday, following the publication of the company’s results in the fourth quarter. In addition to reporting a lower-than-expected loss, investors were also pleased with the Royal Caribbean reservation. The Miami-based company said booking prices were higher than pre-pandemic levels, while falling within historical volume limits.
Royal Caribbean reported a net loss of nearly $ 5.8 billion in 2020 out of a 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 of our liquidity … so that we have the luxury of not facing a crisis, but of gradually improving our liquidity, our financial health, because we want to return to the degree of investment as quickly as we can, “Fain said.
Fain said he believes “serious talks” about resuming cruises in US ports could begin if coronavirus cases in the US continue to decline as they were and if a larger portion of the US population is vaccinated against Covid.
The chief executive said that Royal Caribbean and its Healthy Sail Panel, along with the CDC, agree that there is no single Covid-related measure that is a green light to hit the waters again.
“You look at everything. You look at what we can do to protect people – what the vaccine does, what the test does and what they do together. I think we’re getting close to 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 health protocols is what needs to be done when there is a positive Covid case on board, Fain said. “There will be cases on a ship, just as there are always cases in a society. Our task is to make sure that cases remain and do not become an outbreak,” Fain said, stressing the need for isolation. “I think that’s where the Healthy Sail Panel came from. That’s a big part of our discussions with the CDC and others, and vaccines are a big part of that.”