Royal Caribbean CEO Fain: Cruising Has Restarted

The CEO of Royal Caribbean Group, Richard Fain, has highlighted the changing times since the CDC’s conditional sail order in October and hopes for a more topical approach to the resumption of cruising.

“The CDC issued the conditional sale order last October in an effort to provide a path for cruising to reopen in the United States … When the conditional sale order was written, there were no vaccines. The disease was on an upward trajectory and heading towards a terrible peak. Testing was less available and more costly, and therapeutics were limited. In general, the situation looked very bleak back then,” Fain said in a video post on social media.

“Last October, preparing for resumption service based on extensive protocols made good sense. But today, a vaccine approach makes much more sense than this old protocol-based approach. The vaccines are bringing down the incidence of COVID-19 in society; the testing enables us to catch cases early. And the preparation we’re doing allows us to handle individual cases safely and simply,’ he added.

Click on the above image to hear the Interview.

Fain said that he expects that the CDC will take these changes into consideration.

“We look forward to a constructive dialogue with health officials in the United States and elsewhere, for the path forward under these new circumstances,” he said.

According to Fain, 100,000 cruisers have sailed aboard Royal Caribbean Group’s ships since the pandemic started, with 10 having tested positive for the coronavirus.

“And all of them have been handled smoothly and without undue disruption of other guests’ cruises. And without undue burden on the communities and the governments involved,’ he said. “Our experience with these 100,000 guests is a very powerful proof of concept. In essence, we’ve just had 100,000 test cruisers and demonstrated that the process works.”

The cruise industry overall has carried more than 350,000 passengers since the pandemic with “minimal disruption,” he added.

“This is precisely what we thought would be the case. And now it is the most powerful and reliable evidence in multiple real-world settings,” he said. “No longer are we talking about when will cruising restart cruising has already restarted.”

Fain also said that Royal Caribbean’s post-pandemic cruises have received higher ratings from guests than pre-pandemic.

Fain also stated that the coronavirus vaccines are a “gamechanger,” but he can’t say yet if all Royal Caribbean sailings will require them from guests.

“We have announced three cruises that will require inoculations for all adults, and there are likely to be more. But each circumstance is different. And I would note that the cruises we are currently operating are operating without requiring vaccines,” he said.

Fain finally called on people not to become complacent, as letting “our guard down” and stopping to take simple precautions would cause another spike.

“I, therefore, encourage all of you to get your vaccine, follow the CDC advice, and we can be sailing in time to meet President Biden’s goal of reopening society in time for the Fourth of July,” he concluded

Costa Restarts Cruises With New Program From March 27

Costa Cruises will be restarting service on the Costa Smeralda from March 27 and on the Costa Luminosa from May 2. This was announced by its parent company, Carnival Corporation, in a press release.

“The cruise ships of Costa Cruises … are ready to set sail again and offer guests holidays filled with leisure and relaxation, along with enhanced health and safety protocols,” the company said.

The Costa Smeralda program will consist of an unchanged itinerary across Italy for three- or four-day mini-cruises or, alternatively, a 7-day cruise, calling at Savona, La Spezia, Civitavecchia, Naples, Messina and Cagliari.

On May 1, the Costa Smeralda will return to one-week cruises in the Western Mediterranean with visits to Italy (Savona, Civitavecchia and Palermo), France (Marseille) and Spain (Barcelona and Palma de Mallorca).

The Costa Luminosa will be departing from Trieste from May 2, and the following day from Bari, confirming its program of one-week cruises in Greece and Croatia, according to the press release.

“Costa is working with national and local authorities of the countries included in the itineraries of its ships outside Italy to define the details of the restart of cruise operations, with enhanced health and safety measures through the implementation of the Costa Safety Protocol,” Carnival Corporation wrote. “The protocol contains operational measures related to all aspects of the cruise experience, both onboard and ashore, which were implemented in the past months of cruise operations.”

All other cruises scheduled until the end of May, and not included in the program updated on Feb. 17, will be cancelled. Costa is in the process of informing travel agents and customers affected by changes.

Carnival: Optimistic For Restart in the U.S. By Year’s End

Carnival Breeze

“At this time, we have every reason to be optimistic we will be sailing in the U.S. before year’s end,” said Arnold Donald, president and CEO of Carnival Corporation, on today’s third-quarter earnings call.

The company’s Costa Cruises brand has already returned to service with two ships in the Mediterranean, soon to be joined by a third ship, the Costa Smeralda, according to Donald. They are sailing weeklong cruises from different Italian homeports. The sister brand, AIDA, is set to launch service later this month, also in the Mediterranean, with German passengers.

Donald explained that the ships are sailing with lower occupancy levels enabling the cruise lines to test and assess their health and safety protocols.

With national brands, Donald said Carnival is ideally positioned for a phased-in return to service, as each brand can be restarted independently, and in most cases with ready access to drive-to markets.

Also, with a small percentage of the fleet entering service, for now, he said, there will be less reliance on new-to-cruise, compared to all previous growth cycles that required the brands to tap more new passengers.

In addition, as Carnival is disposing of some 18 older ships and right-sizing its shoreside organization, Donald said a leaner and more efficient company would emerge.

“All initiatives going forward will be focused on maximizing cash generation and creating shareholder value. The delivery schedules of new ships have been stretched out and there is only one new ship on order for 2024 and one for 2025. This will further reduce our capital expenditures and allow us to repay debt,” he added.

Added David Bernstein, CFO and chief accounting officer: “We are focused on assets that are cash generative, so we can pay down debt, rebuild our balance sheet and get back to investment-grade rating.

“We are working through a number of different financial scenarios, but there is a lot of uncertainty involved so it is difficult to give (financial) guidance. (However), we expect over time to build occupancy up to generate positive cash flow and reduce the cash burn. The start-up occupancy level is less than 50 per cent. Over time, once we know we have things right, we will increase occupancy, while keeping social distancing in mind as well.”

Bernstein noted that the break-even point ranges from 30 to 50 per cent occupancy for different ships.