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Royal Caribbean expects Asia and Europe operations to resume first

Royal Caribbean expects cruising to resume in Asia and Europe before the US, as it announced a further suspension of operations until July 31 for all departures except those from China, which are suspended until the end of June.

Speaking on a media call after the announcement of first quarter results from parent company, RCCL, Royal Caribbean International chief executive Michael Bayley said it was “highly likely” US cruising would follow other regions.

“It’s a very different story in different markets,” he said. “Every country is on its own journey. China and Asia went through this first, and so it’s logical that they are emerging from this first. And then the same for Europe. We are aware of different landscapes and you will see different markets coming back at different paces.

“But the strength of our brand and global nature of our business will help us to power through the opportunities.”


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RCCL chairman and chief executive Richard Fain said it would be a “slow and gradual return” to operations.

“We don’t expect somebody to blow a horn and all ships to start operating at the same time. It will be a gradual return to service – a bit like it’s a gradual return to society. You will see a degree of variability.”

But the company said it did not need to get its entire fleet operating again to start making money.

“We don’t need the whole fleet to start operating or the load factors to be particularly high to break even,” said executive vice president and chief finance officer Jason Liberty.

He added that the company’s newer ships, or those that had been modernised, were likely to re-enter service first because they have “more public space” to allow for greater social distancing.

And he predicted that Covid-19 would lead to older ships being retired, others being put up for sale and newbuild programmes slowing down.

“You’ll see old ships retired at a much higher pace than before, some of our older vessels being put up for sale and a permanent shift in the newbuild programme – because the yards aren’t really operating and so the supply chain is going to be impacted,” said Liberty.

Despite challenges posed by the crisis, executives on the call remained upbeat.

“We have been honestly surprised by demand for the last quarter of this year, and for 2021, especially from loyalty clients,” said Bayley, adding that Royal had just shy of 20 million loyal guests.

“We are seeing strong demand for 2021. Volumes are at typical levels and rates are up a bit. Cancellations for 2021 are at typical levels,” Liberty added.

The executives said about 45% of customers whose cruises had been cancelled had taken refunds, with the remainder happy to take Future Cruise Credits, and of those “the majority had already rebooked”.

“Most are using the 125% FCC to upgrade to a better cabin and our loyalty guests are redeeming their FCCs quicker than others,” Liberty revealed.

Fain said the company would “come back stronger” but not by “mimicking what we used to do, but by adapting to the new normal”.

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