Royal Caribbean Group — parent of Royal Caribbean International, Celebrity, and other lines — provided a business update today, where executives hinted that protocols put in place to take a cruise could be eased.
While the cruise company makes clear that it intends to work with the CDC and “follow the science,” comments were promising that the health rules won’t stick around forever.
In response to a question about protocols on ships during a conference call, Royal Caribbean International President Michael Bayley pointed to many countries (such as the U.K. and Denmark) easing restrictions, suggesting his cruise line could be on that path as well:
“Certainly we see now with Omicron that the decrease in positivity is really significant. Not only in the U.S. and certain states but also onboard of our ships. And we believe we’re going to move into a much more positive environment.
I think what we’ll see is that as we get into that environment we’ll start — again, working with the CDC — we’ll start removing many of the protocols that exist today and it will become easier and simpler for our customers.”
-Royal Caribbean Intl. President Michael Bayley (emphasis added)
Currently, protocols surrounding cruises include testing before boarding, vaccine requirements, masking while indoors, and more. Specifics about which protocols might be changed or exact timing of any changes were not addressed.
Mr. Bayley also shared that the company believes “in the not too distant future” the CDC will downgrade the risk of cruising from Level 4 to Level 3.
The current Level 4 status says that the public should avoid cruises, even if vaccinated.
Royal Caribbean: “It Appears The Worst Is Behind Us”
The Omicron variant hit the world exceptionally hard. While milder in severity, it is much more transmissible than past versions of the virus, including among those who are fully vaccinated. That led to a spike in cases across cruise ships, despite the protocols in place.
According to Royal Caribbean, however, cases on ships have fallen sharply lower, just as they have on land.
“The good news is that in the last several weeks, cases onboard our ships have been declining rapidly, and we now have returned to exceptionally low pre-Omicron levels,” said Jason Liberty, the newly appointed Royal Caribbean Group CEO.
“In fact, over the last seven days we have averaged only a handful of positive guest cases per cruise. With the declining cases operational challenges are also abating, so while the variant is not done, it appears the worst is behind us.”
All told, the CEO said his company carried approximately 1.3 million passengers since restarting in 2021, with about 2,500 guests testing positive for the virus. That’s a positivity rate of 0.19%.
“This positivity rate is still a small fraction of what it is in society at large and nearly all cases onboard were asymptomatic or had mild symptoms,” Liberty said.
As for crew, specific case numbers weren’t cited, but Mr. Bayley shared that among those crew members testing positive, 99% were asymptomatic and 1% had mild symptoms.
“The impact on the crew was effectively zero, except it did take them out of operation for the period of their quarantine,” Bayley said.
Business Update Shows Uphill Climb, but Positive Trends
The impact of COVID on cruise lines cannot be overstated, as shown in Royal Caribbean’s latest update.
Between a pause in cruising for the first half of the 2021, the Delta variant, and now the Omicron variant, Royal Caribbean had its work cut out for it in the most recent year. Still, the company managed to carry approximately 1.3 million passengers during fiscal 2021.
For comparison, the company carried roughly 6.5 million passengers in 2019.
Even with the restart, the cruise line saw significant losses as it sailed with a reduced fleet that is also sailing at reduced capacity. All told, Royal Caribbean Group said that it booked a loss of $5.3 billion for 2021, a slight improvement versus the $5.8 billion loss in 2020.
That said, there is reason to believe 2022 will be a sharp improvement. The company will have a full year of sailing and has also brought back a significant portion of its fleet.
By the end of 2021 the company said that 50 of 61 ships in its fleet across five brands had returned to sailing, representing about 85% of total capacity. Even so, those ships are not yet sailing full. The total load factor during the year was 59%.
“We expect 2022 will be a strong transitional year, as we bring the rest of our fleet back into operations and well-nigh historical occupancy levels,” Liberty said.
“Omicron created short-term operational challenges that have unfortunately weighed on close-in bookings. While the timing of Omicron was particularly unfortunate for the first half of 2022 bookings and will likely delay our return to profitability by a few months, we do not expect it to impact our overall recovery trajectory and the strong demand for cruising.”
Going forward, the cruise line saw a record Black Friday and Cyber Monday weekend, before Omicron hit. But as cases now ease once again, the cruise giant expects bookings to continue to increase.
