Royal Caribbean posts loss, 'encouraged' by volume of 2021 bookings
48% of the guests booked on canceled sailings have requested cash refunds
Royal Caribbean posted a $1.6 billion loss for the second quarter after the coronavirus pandemic forced the company to temporarily suspend operations around the globe.
On March 13, the company ended all global voyages. Since then the company has continually extended its pause in operations in response to the ongoing pandemic. Its latest delay goes through Oct. 31.
Shares of Royal Caribbean spiked 10% on Monday.
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This extended suspension has "significantly impacted" bookings for the remainder of 2020, which the cruise line operator says is "meaningfully lower" compared to this time a year ago and at lower prices.
It remains uncertain if cruises will get pushed back again, which would further impede operations. However, the Cruise Lines International Association (CLIA), a trade association that includes Royal Caribbean, announced it would revisit the conversation “on or before” Sept. 30. The organization will also consider lifting its pause earlier "should conditions in the U.S. change."
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Royal Caribbean Group’s adjusted loss was $6.13, compared with analysts’ average forecast of a loss of $4.82 per share. The cruise operator says it is burning through $250 million to $290 million a month.
|RCL||ROYAL CARIBBEAN GROUP||64.14||+2.27||+3.67%|
"We are using this time to refine our operations to be as efficient as we can while providing the great experiences that so many people are eagerly awaiting," Royal Caribbean CEO Richard Fain said, adding that the company's teams are "working tirelessly to return to service soonest and doing so by developing new health and safety protocols."
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For guests who were booked on canceled voyages, Royal Caribbean has offered the choice of future cruise credits ("FCCs") or the opportunity to "Lift & Shift" their booking to the same sailing the following year in lieu of providing cash refunds.
To date, 48% of the guests booked on canceled sailings have requested cash refunds.
Looking ahead, however, the company noted that "the booked position for 2021 is trending well and is within historical ranges."
"Given the current global situation and uncertainty, we've been both encouraged and humbled by the volume of bookings we've been receiving for 2021," Royal Caribbean Chief Financial Officer Jason Liberty said Monday on the company's earnings call.
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The Associated Press contributed to this report