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Royal Caribbean CEO Richard Fain told CNBC on Monday that the cruise operator saw a number of optimistic signs in its early booking data suggesting a positive recovery from the coronavirus pandemic.
“Some of the things that we thought didn’t happen don’t happen. They are better than we thought,” Fain said in an interview with CNBC’s Seema Mody.
The age of customers signing up for travel is an example where reality has diverged from business expectations, according to Fain. “We really thought the elderly would be more careful. It turns out they also want to get out of their homes,” Fain said, explaining that a likely factor is that the elderly have been given priority access to Covid vaccines. .
The history of cruises is another unexpected feature of customers who book travel, said Fain, who has run Royal Caribbean for more than three decades.
“We thought almost everyone was going to be an experienced cruiser because they were the ones who got the cruise and were eager to come back,” Fain said. “Yet in our Singapore operation, 80% of our customers are newbies. So we’re getting a lot of surprising data as things come out, and that’s mostly positive.
In December, Royal Caribbean’s Quantum of the Seas began operations in Singapore. And since November, TUI Cruises, a subsidiary of Royal Caribbean, has sailed three ships to the Canary Islands. But for the most part, the cruise industry has been largely inactive for almost a year as the coronavirus swept the world and governments imposed navigation restrictions. In the United States, operations remain on hold due to an order from the Centers for Disease Control and Prevention.
Royal Caribbean shares surged Monday after the company’s fourth quarter earnings release. In addition to reporting a lower than expected loss, investors also applauded the booking information offered by Royal Caribbean. The Miami-based company said reservation prices were higher than pre-pandemic levels while still within historical volume ranges.
Royal Caribbean reported a net loss of nearly $ 5.8 billion in 2020 on total revenue of $ 2.2 billion. The company raised about $ 9.3 billion in new capital during the year, including debt offerings and a $ 1 billion stock sale in December. Last month, Royal Caribbean announced the sale of its Azamara brand to private equity firm Sycamore Partners in a deal worth $ 201 million.
“We have accumulated enough liquidity … so that we have the luxury of not having to face a crisis but to gradually improve our liquidity, our financial health, because we want to return to the investment grade as quickly as we do. can, ”Fain said.
Fain said he believed “serious conversations” around resuming cruises from U.S. ports could begin if U.S. coronavirus cases continue to decline as they have been and more of the population American is vaccinated against Covid.
The chief executive said Royal Caribbean and its Healthy Sailing Advisory Group, as well as the CDC, all agree that there isn’t a single measure related to Covid that would represent a green light to hit the waters again.
“You look at all of this. You look at what we can do to protect people – what the vaccine does, what the tests do, and all of that together. I think we’re getting closer to when these things work together,” Said Fain. “Unfortunately, there is no magic threshold that says, ‘This is the day’.”
One of the main goals of Royal Caribbean’s health protocols is what to do in the event of a positive Covid case on board, Fain said. “There will be cases on a ship, just as there always are in a society. Our job is to make sure that this remains cases and does not become an epidemic,” Fain said, stressing the need to isolation. “I think that’s where the Healthy Sail group comes from. It’s a big part of our discussion with the CDC and others, and vaccines are a big part of it.”
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