“Our industry and our company are undergoing unprecedented challenges, and we are having to quickly adapt to this new and evolving environment,” Richard D. Fain, Royal Caribbean Cruises Ltd. chairman and CEO, said during the company’s first quarter conference call on Wednesday.
Fain, along with other Royal executives, addressed one of the most dramatic quarters in the company’s—and the industry’s—history, and what has to happen for Royal to return to some sort of regular schedule in the future.
“The world is clearly embarking on a program of gradually opening up. That program is just beginning and it varies widely between geographical areas,” Fain said, adding that the company is now focused on all aspects of health and safety as it prepares for its return, including a new program called “Healthy Return to Service.”
“Our goal is to raise our standards to entirely new levels, and we believe that the Healthy Return to Service program will help us get there. We have the time, we have the determination, and we have the expertise,” he said.
Fain went on to say that the company was not prepared to give exact details about what they’ll be doing onboard to ensure health and safety—though last week CEO Michael Bayley revealed that RCI is planning on doing away with buffets initially—but that the process is continuing and it will not rush the work.
Right now, Royal doesn’t have concrete plans as to when its ships will start sailing again and executives on the call said that it will vary from region to region.
“It’s a very different story by region and by country,” Bayley said. “I think it’s highly likely that either the Asian markets and China, for example, or the European region, could come back earlier, because of course they went through this experience earlier and that’s particularly true of China.
“We’re only going to return to service, regardless of regional market, when we believe that we have a healthy return to service plan that’s deemed as the right way forward and I guess we’ll be comforted by that plan,” Bayley added.
Jason Liberty, Royal’s EVP and CFO, on the call said that while bookings have dropped dramatically for 2020 and for the first quarter of 2021, prices for 2021 booked sailings are up in the mid-single-digit range, indicating that “there is demand for cruising.”
Liberty said that Royal’s Cruise with Confidence program has provided its guests with the confidence they need to book new sailings and keep existing ones—55% of Royal’s guests opted for the future cruise credit instead of their cash back, and most of those who opted for the FCC are Royal’s loyal guests and its younger guests.