Tag Archives: RCCL

The Big Three Cruise Corporations Continue to Burn Cash. Here’s How Much.

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Carnival Corporation, Royal Caribbean Group and Norwegian Cruise Line Holdings are still burning through cash as some ships emerge from lay-up back into operations. 

Cash burn numbers may be up in the third quarter with added costs to reactivate ships, needed maintenance, potential drydocks, procurement, getting crew back and more.

Only one out of the three big cruise companies provided estimates on third-quarter cash burn, indicating it would be up close to 45 per cent. 

Carnival Corporation

For Carnival Corporation, the company’s cash burn for the first half of 2021 was $500 million per month, which was better than a previous forecast of $550. The improvement was mainly due to the timing of cash received from ship sales just before the end of the second quarter and some other small working capital changes.

With ships quickly relaunching, and a short booking window for cruises announced close to departure, the company said it will not provide a forecast for its third-quarter cash burn rate.

Independence of the Seas in Southampton Photo credit Dave Jones

Royal Caribbean Group

Royal Caribbean reported its average monthly cash burn rate for the second quarter of 2021 at approximately $330 million, slightly higher than the prior quarter as the company returned additional ships into operation. 

Similar to Carnival, Royal Caribbean would be not providing a forecast for the third quarter.

“The environment remains fluid, and for this reason, we are not providing a cash burn estimate or the related offsets generated by revenue and new customer deposits. I will highlight that the burn rate for the ships that are kept at layoff is expected to be consistent with our previous expectations,” said Jason Liberty, executive vice president and CFO, on the company’s second-quarter earnings call.

Norwegian Star in Mexico Photo Credit Dave Jones

Norwegian Cruise Line Holdings

Norwegian Cruise Line Holdings said its average cash burn in the second quarter was $200 million per month, higher than its guidance of $190 million driven by the announcement of additional ship relaunches in the company’s voyage resumption plan and the associated restart expenses.

“As for the third quarter, we expect our average monthly cash burn rate to increase to approximately $285 million as restart expenses accelerate with additional vessels entering service,” said Mark Kempa, executive vice president and CFO. “Restart expenses are primarily related to repositioning, provisioning and stopping of vessels, implementing new health and safety protocols and a measured ramp-up of demand-generating marketing investments.”

Quantum of the Seas’ Singapore Season Extended Through February 2022

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Royal Caribbean International has announced that it’s extending the Singapore season for the Quantum of the Seas through February 2022.

This marks the third season extension for the Quantum in Singapore, which first returned to cruising in December 2020. To date, on 60-plus ocean getaways, more than 82,000 guests have safely sailed with zero occurrences of COVID-19 onboard, the cruise line wrote in a press release.

“We are thrilled to have the opportunity to extend the Quantum’s ultimate ocean getaway through early next year, providing Singapore residents with more time to relax and unwind. Despite the constantly evolving circumstances, Royal Caribbean remains consistent in delivering a wonderful holiday experience. We know that with her remarkable breadth of activities, delicious meals and unparalleled views, Quantum has many fans in Singapore, and there continues to be an overwhelming demand for sailings,” said Angie Stephen, managing director, Asia-Pacific, Royal Caribbean International.

The cruise line said that it has made every effort to keep guests and crew aboard the Quantum safe through a multilayered set of health and safety measures, which include pre-departure wellness screenings using gold-standard PCR tests, contactless embarkation and debarkation, and enhanced HVAC filtration systems and sanitization.

“The health and safety of our guests remain our utmost priority, and we are continuing to be nimble as we follow the science and work closely with the Singapore government and health authorities to evaluate, update and adhere to prevailing measures. In the next few months, as more Singapore residents become fully vaccinated, we anticipate that we’ll begin sailing with the fully vaccinated crew and vaccinated guests age 12 and older alongside children who are not yet eligible for vaccines,” added Stephen.

Singapore residents can choose between Quantum’s three- and four-night ocean getaways. The ship features activities, such as the RipCord by iFly sky diving adventure and the FlowRider surf simulator, entertainment that blends art, music and technology, and dining flavours from across the world at 18 restaurants onboard.

In line with the recent government regulations, the Quantum currently sails at 50-per cent guest capacity, and holidaymakers from different households have the option of travelling in groups of five.

Royal Caribbean Relaunches Cruise Service in North America This June

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Royal Caribbean International will be the first major contemporary cruise line back in service in North America, relaunching cruises in June from Nassau with the Adventure of the Seas offering weeklong itineraries starting on June 12.

“We’ve been working on the return to service for well over a year for this market,” said Vicki Freed, senior vice president of sales and trade support and service, Royal Caribbean International. “We’ve been sailing successfully in Singapore and feel very confident about our strong protocols that are in place.”

The weeklong sailings will operate below 100 per cent occupancy to start on the 3,100-guest Adventure, and ramp up occupancy rates over time, said Freed.

All crew will be vaccinated and guests will be required to show proof of a COVID-19 vaccination. Guests under 18 will need a negative PCR test.

Freed said Nassau was a great jumping-off point for people to cruise from with 24 daily flights from 13 major U.S. airports.

The cruise will call on Perfect Day at CocoCay, Royal Caribbean’s private island and its highest-rated port globally, where the ship will spend two days.

Other port stops include Grand Bahama and Cozumel, where the company will only allow guests off the ship on Royal Caribbean-organized shore excursions.

“With our own little bubble, we can really make sure the health and safety protocols are being followed,” Freed told Cruise Industry News via phone.

The Adventure will thus join the Quantum of the Seas, sailing from Singapore, and the Odyssey of the Seas, sailing from Haifa, as the Royal Caribbean ships back in service.

As for why the company decided on the 2001-built Adventure and Freed said the Voyager-class ship was the right ship for the deployment, with all the company’s bells and whistles, having come off a major refurbishment in 2018.

Itineraries are currently scheduled from June through August, and Freed said the next logical steps were getting more ships back in service in North America, as well as increasing occupancy on the Adventure over time.

Among major product changes, Freed pointed to the company’s e-mustering system, allowing guests to attend the muster drill from their stateroom or using a mobile device on an individual basis. She also noted a more digital cruise experience, using mobile phones to access restaurant menus, for example.