Royal Caribbean assured of return

Execs confident as company tests new safety measures

Royal Caribbean executives won’t predict a date for the company’s return to cruising from United States ports, but they say they’re confident it’s going to happen soon.

Tracking bracelets and facial recognition software being tested aboard the company’s Quantum of the Seas voyages from Singapore could be among safety measures passengers will find throughout the company’s fleet when operations resume, they said.

In a conference call Monday with investors to discuss the company’s $3.9 billion net loss in 2020, executives said they’re heartened by data showing that infections are declining and vaccinations are increasing.

The trends “are building confidence that we’re getting closer to the other side of this and people are beginning to realize that travel should be here sooner rather than later,” said Jason Liberty, chief financial officer of Royal Caribbean Cruises Ltd. Bookings for future cruises increased 30% since the beginning of the year compared to November and December, when COVID-19 infections were increasing.

Investors reacted favorably to the executives’ optimism, driving Royal Caribbean Group’s stock price up 9.51% to close at $86.37 on the New York Stock Exchange on Monday. Competitor Carnival Corp. benefited as well. Its stock prices closed up 5.61%, to $25.97.

The increase in bookings point

to a “pent-up demand for vacations,” noted Richard Fain, chairman and CEO. “People are clamoring for opportunities to have experiences outside their home.”

Many of those bookings were by customers 65 and older, a sign that vaccinations are making customers within that age group more comfortable with the idea of returning to cruising, he said. As vaccinations become available to more people younger than 65, the company expects bookings among those age groups to increase as well, he said.

Cruising from U.S. ports has been suspended since the industry shut down worldwide last March. Since then, some nations have allowed sailings to resume under strict conditions such as pre-boarding tests, mask wearing, social distancing and limited capacity.

Royal Caribbean’s Quantum of the Seas has been sailing from Singapore since early December, while other Royal Caribbean ships have since resumed operations from Germany, the Canary Islands, Greece and the Middle East.

Currently, most major cruise lines have suspensions in place for U.S.based voyages through April 30 but are taking money for bookings scheduled to begin in May. Fain alluded to the tentative status of that May restart on Monday when he mentioned that sailings are suspended “at least through April.”

But no one who spoke at the conference call suggested that the company is planning to extend the suspension past April 30. A potential May restart hinges upon approval from the Centers for Disease Control and Prevention of technical guidelines for safe-as-possible sailing.

“We’re literally expecting the technical specifications any day soon,” said Michael Bayley, president and CEO of Royal Caribbean International. The guidelines are under review by several agencies within the government, and the CDC has “assured us that as soon as all of these things come together, they want to get us back into operation.”

One those technical guidelines are released, cruise lines will be able to begin test voyages ordered by the CDC. When the test cruise requirement was announced last November, more than 250,000 cruise fans went to Royal Caribbean’s website and volunteered to participate.

Many of the safety measures in place aboard the handful of ships currently operating will be replicated throughout the Royal Caribbean fleet, and they could be among the CDC’s requirements for all cruise lines, Bayley said.

The CDC was especially interested in “game-changing” contact tracing technology installed on Quantum of the Sea, he said.

It involves requiring passengers to wear bracelets — or “tracelets” — that let the company track passengers’ every movement aboard the ship. “You can tell exactly how long they’ve been in contact with everyone else who wears a tracelet,” Bayley said.

Data from tracelets is verified by facial and body recognition software that analyzes footage from video cameras mounted throughout the ship.

The CDC asked the company to explain what it’s been doing with the technology in Singapore, “which we’ve subsequently done,” Bayley said.

“There’s a lot of lessons being learned, and I think ultimately it will create a foundation for how we’ll operate,” hesaid.