Royal’s Richard Fain: Cruise Line Seeing ‘Pent-Up Demand’ from Loyal Guests

During an interview discussing the company’s second quarter earnings this week, Royal Caribbean Group Chairman and CEO Richard Fain told CNBC that there is a pent-up demand for bookings next year and the cruise line is preparing for a gradual return to sailing.

“We are seeing that there is a pent-up demand, people are frustrated being at home and being isolated,” he said.

In particular, Fain said, Royal’s past guests, the most loyal guests who know Royal and prefer to sail on the line, are the ones most looking forward to coming back in 2021.

“I don’t think that’s a surprise,” Fain said. “I think everyone is looking forward to seeing the industry come back into full operation.”

There is still no timetable as to when Royal, or the rest of the North American cruise industry, will have ships return to sailing in North America.

“With COVID, I don’t think anyone can be confident of anything. We are seeing some movement in other countries, it started up in Germany, in mid-August you’ll see some start up in Italy. I am hopeful we’ll see things improve and you’ll see some movement in Australia and China but every place is looking at it independently and we’re learning throughout this process,” he said.

While Royal has partnered with Norwegian Cruise Line Holdings on their Healthy Sail Panel, which will come up with the lines’ new protocols for sailings, Fain said that the industry will ultimately be guided by “what’s happening in the larger society” and not just onboard ships.

“If the broader society is totally locked down then you’re obviously not going to see cruising coming back,” he said. “We’re taking this time, we know we’re out of service for a while, so this is a time where we can learn and improve.

“When we do start to come back…we don’t expect this to be a light switch when all of a sudden everything is ready to go. We expect this to be a dimmer where we’ll start, and we’ll learn from the start.”