by Praveen Paramasivam (Reuters) – Royal Caribbean Group said on Monday it was seeing an uptick in future bookings, following a disastrous year for the cruise operator, as travel enthusiasts look to sail again at a time governments globally have started mass vaccinations.
The company’s shares, down 44% last year, soared 9% in morning trading (and is up 24% in the past five trading days), as Royal Caribbean said it recorded a 30% increase in new bookings since the beginning of the year when compared to November and December.
Analysts have also tipped Royal Caribbean and its peers Carnival Corp and Norwegian Cruise Line Holdings Ltd to resume voyages gradually in the back half of this year, after the pandemic-triggered months-long halt.
“Now after 11 months of the pandemic, I think we all know that COVID fatigue is real. People are clamouring for the opportunity to have experience outside their homes,” Chief Executive Officer Richard Fain said on an earnings call.
Royal Caribbean said bookings for the first half of 2022 were within historical ranges and at higher prices, with some on Reddit and Twitter saying they were itching to go on cruises again.
However, the operator of “Symphony of the Seas” cruise posted a net attributable loss of $1.37 billion for the quarter ended Dec. 31, taking its annual loss to $5.8 billion.
Royal Caribbean’s total revenue for the quarter was $34.1 million, compared with analysts’ estimates of $35.6 million, according to IBES data from Refinitiv.
On an adjusted basis, the company lost $5.02 per share. Analysts had expected a loss of $5.20.
Miami-based Royal Caribbean forecast a net loss for its first quarter and the 2021 fiscal year.
Royal Caribbean Group has scheduled a business update call for investors, as well as report 2020 fourth quarter and 2020 full-year earnings, on Monday, Feb. 22.
It’s a key call for the investment community, with the company approaching the one-year mark without ships in service from U.S. ports, and only a small percentage of its fleet operating, with the Quantum of the Seas sailing from Singapore while TUI Cruises and Hapag-Lloyd Cruises have seen smaller restarts.
Company executives are expected to provide a 15 to 25-minute presentation and then will open it up to question from financial analysts.
CDC: Will company executives provide an update regarding ongoing discussions with the CDC and its Conditional Sailing Order. Since being issued in late October there have been no further public updates nor promised technical regulations.
Biden Administration: After the industry had high-profile meetings with Vice President Mike Pence in 2020, as well as a teleconference in October, what has been the relationship with the new U.S. administration so far with President Joe Biden in office?
Azamara: Company executives will need to comment on the sale of Azamara to a private equity company. Will other sales of ships or brands follow?
Alaska: How will the Canada cruise ship ban impact the Alaska season and is the idea of a waiver to operate without calling on a foreign port realistic?
Occupancy: When the ships do restart, what occupancy will they sail at, and what occupancy do they need to sail at to generate positive earnings?
Deployment: Could 2021 and possibly 2022 lead to a seismic shift in deployment as cruise lines stay even closer to home and embrace short cruises?
Cash Burn: Royal Caribbean Group opted not to provide an exact cash burn figure in its last earnings release, but offered a range that averaged out to $270 million a month. Investors will be looking for an update.
Startup Costs: Among Wall Streets, key concerns will be the startup costs per vessel as well as the timeline to get a vessel ready to cruise with guests.
Lay Up: Will the company elaborate on further cold lay-up scenarios for the vessels that may return to service last?
Royal Caribbean International has seen a number of company adjustments, fleet changes and deployment moves since COVID-19 began, plus the resumption of cruising aboard the Quantum of the Seas from Singapore.
Here are the main moves that took place for the cruise line since the pandemic started:
Newbuilds Odyssey of the Seas and Wonder of the Seas Delayed
Under construction in Germany, the Quantum-Class ship was delayed six months and is now scheduled to join the fleet in April.
A few weeks later, the company revealed that the Wonder of the Seas was also delayed. The China-bound Oasis-Class ship was previously scheduled for a mid-2021 delivery and is now expected in 2022.
In both cases, Royal Caribbean cited the coronavirus pandemic and its impacts as the main reason for the changes.
Royal Amplified Postponed Until Further Notice
When the pandemic started, Royal Caribbean was in the middle of a program of fleet modernization called Royal Amplified.
Two ships were scheduled to go trough the work in the second quarter of 2021, including the Allure of the Seas. The Oasis-Class vessel was set to undergo a 58-day, $165 million drydock, starting in March.
Grandeur of the Seas Stays and Debuts a New Homeport
A few weeks after confirming the Majesty and Empress departures, Royal Caribbean announced that the Grandeur of the Seas will operate a new program from Barbados, starting in December.
Built in 1996, the ship was in limbo after the Spanish brand Pullmantur Cruceros filed for insolvency last June. The sister company was set to receive the Grandeur early this year, which was announced back in 2019.
Healthy Sail Panel Launched in Partnership with Norwegian
Putting together a group of experts, the companies formed the “Healthy Sail Panel”, which, in September, revealed a 65-plus-page report detailing 74 best practices to protect the public health and safety of guests, crew and the communities where cruise ships call.
The new protocol is expected to be adopted by Royal Caribbean International when sailings are resumed globally.
Cruises Resumed in Singapore and Global Resumption Plans
With the approval from local authorities, Royal Caribbean started sailing from Singapore in early December. Sailing a program of short cruises to nowhere, the Quantum of the Seas became the first ship to resume service in the company’s fleet.
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