Inventory for Empress of the Seas will not be released a few months at a time in 2017 as it has been in 2016, Royal Caribbean International president Michael Bayley said on Friday.
The Empress has been sailing short itineraries to the Bahamas and the Caribbean since it returned to Royal Caribbean’s fleet in June. It had been renovated at a cost of $50 million with the intent to use it on itineraries to Cuba.
However, Royal Caribbean has yet to gain approval from Cuban authorities to begin those cruises.
“We really were holding it late and hoping for the itinerary change,” Bayley said during Royal Caribbean Cruises Ltd.’s third-quarter earnings call.
With cabins available only a few months ahead of time, travel agents have difficulty making group bookings that typically require longer to organize than individual ones.
Empress cruises are currently available through April 2017.
Royal Caribbean was also delayed in launching the Empress into Caribbean service by unexpected construction obstacles after the ship was returned from Royal’s Spanish subsidiary Pullmantur.
During the call, Royal Caribbean said projected earnings in the current fourth quarter have been pared by an estimated $13 to $15 million by the delay in getting Empress sailing again and the resulting lost sales momentum.
For the third quarter, RCCL reported net income of $693.3 million on revenue of $2.56 billion. Results are not directly comparable with last year’s third quarter because of a huge write-down on Pullmantur.
Executives said the company is in a better booked position for next year than it was last year at this time, with both loads and pricing ahead of pace. North American demand for Europe is returning in the absence of recent terrorism incidents, they said, although Europe will account for 15% of Royal’s overall capacity in 2017, down from 20% this year.
The Caribbean will rise to 50% of overall capacity with the addition of Harmony of the Seas, which will not sail in Europe next summer as it did this year, and the shift of Celebrity Equinox from Europe to the Caribbean year-round.
After a pause in bookings following Hurricane Matthew, Royal Caribbean began some promotions to restart consumer demand.
Unlike the scheduled cruise ship refurbishments, major refits may include even a cruise ship lengthening, like in the case of Royal Caribbean ship Enchantment of the Seas lengthened in 2005 (see the photo below). The Enchantment ship lengthening cost ~ US$55 million, it was a process of cutting the ship in two and inserting a whole new 73 ft (22 m) 3,500 tons midsection, pre-built at the Aker Finnyards. The month-long dry-dock at the Keppel Verolme shipyards (Rotterdam, The Netherlands) resulted in adding 151 brand new cabins, a 50% bigger Pool Deck area, a new kids area, a teen center, several new bars and lounges, an expanded main dining room, a new specialty restaurant. This “refurbishment cost” record was recently beaten by the CCL line and the US$155 million Carnival Destiny refit 2013 producing a brand new ship named Carnival Sunshine!
Cruise ship building prices are high enough to not meet the return requirement. Even the mighty Carnival Corporation (the largest cruise company in the world) puts its ship building plans on hold. Royal Caribbean is one of the few companies continuing to place orders for new ships – and not any ships, but the ever largest, the most innovative, the most expensive in the world. Still, most passenger ship lines are trying to keep their current fleet fresh and good looking. Two of the best examples are Holland America with its $450 million SOE program for ship renovations, and Carnival investing over $250 million to fully refit and refurbish 8 of its oldest vessels.
Wetravel2u's Weblog 