Royal Caribbean Blog

Royal Caribbean Group stockholders have seen a nice bump this week in the cruise giant stock price, thanks in part to good news of a new COVID-19 test.

Abbott Laboratories announced on Thursday a "fast, $5, 15-minute, easy-to-use COVID-19 test" that has resulted in a two-day rally for cruise line stocks.

Royal Caribbean Group ($RCL) closed on Friday up 5.30%, at a closing price of $70.13. Share prices have been rocketing up since Thursday morning's announcement.

Fast and cheap testing

On Wednesday, the FDA issued an emergency use authorization (EUA) to Abbott for its BinaxNow COVID-19 Ag Card. 

The test costs $5, involves just a nasal swab, and results can be delivered in 15 minutes without any special equipment.

In addition to being cheap and fast, it is easy to use since the BinaxNow COVID-19 Ag Card works in concert with NAVICA, a new application for iPhone and Android devices that gives people with negative tests an encrypted digital health pass.

Theoretically, a cruise line like Royal Caribbean could insist guests take the test before admitted on a cruise by using the app.

According to Abbott, around 2.9% of patients taking the test receive a false negative when they're actually infected. About 1.5% of people who are not infected will receive a false positive. 

Abbott is manufacturing BinaxNow COVID-19 Ag Cards at scale in two new U.S. facilities. The company will begin shipping the test cards in September and expects to deliver at a rate of 50 million tests per month by October. 

Testing part of the strategy

While full details have not yet been released, Royal Caribbean has said COVID-19 testing is likely to occur.

Royal Caribbean International CEO Michael Bayley recently commented that testing is going to be one aspect of the protocols to expect onboard.

"Testing is part of the thinking that we have not yet reached a point in our protocols where we're ready to publish and release for for discussion," Mr. Bailey started, "But it's very likely that testing will occur."

The winning combination

Taking into account Abbott's testing, along with a slew of new vaccine news, Wall Street seems to think the dual-pronged approach that addresses developing a vaccine as well as preventing infection is a good sign for the cruise lines.

A pair of new vaccine candidates from VBI Vaccines was also announced on Thursday, joining a field of other vaccines in various stages of testing.

In short, the more news about promising and effective testing and vaccines, the more positivity the market is showing cruise lines might get back to business sooner than later.

Note: Matt Hochberg has no position in any of the stocks mentioned, nor does he own any cruise line stock.

Does it make more sense to go on a short cruise or is your money better spent on a longer sailing?

Royal Caribbean offers cruises of various lengths, with short 3 or 4 night sailings all the way up to cruises that exceed 14 days.  Which is the right choice for you and what are the differences between these cruises?

Here is a breakdown of why you might want to take a short or a long cruise.

Price

How much your cruise costs is a major factor in picking any vacation, so not surprising it should be the first consideration when debating a short cruise or a longer cruise.

In general, short cruises tend to have a lower overall cruise fare cost compared to longer cruises. A cruise that only goes a couple of days is going to be fairly affordable for most, and provides an inexpensive entry into the world of cruising.

Longer cruises may cost more overall, but their price per-night may actually be cheaper than some short cruises. Of course, multiplied out over sailings that can double or triple the length of a short sailing, and you will still pay more overall.

In general, I believe it is a mistake to book cruises purely based on price, but it is important to not only consider the bottom line price. Look at how much you would be paying for each night of the cruise to see which is a better value.

Places you will visit

Going on a cruise means visiting various ports of call around the world, and you will absolutely see more of them on a longer sailing.

Short sailings might have one or two ports to visit, while longer sailings can visit significantly more ports during their voyage.

Moreover, longer sailings means your ship has the ability to visit more exotic destinations. The more nights of a sailing, the further out your ship can potentially sail. 

If you are interested in visiting places out of the ordinary, a longer sailing will get you there.  

Shorter sailings do have an advantage of being generally close enough to very popular ports of call, including a cruise line's private destination. Nearly all of Royal Caribbean's short sailings visit Perfect Day at CocoCay in The Bahamas.

How much importance you place on the ports your cruise will visit may play a significant role in picking a short or long cruise.

Relaxing or party cruise?

Another generalization between short vs. long cruises is the atmosphere onboard.

Longer sailings are going to provide more time onboard the ship, which means more time to relax while onboard. Longer cruises tend to have more sea days, and that can mean more relaxing.  

Of course, Royal Caribbean cruise ships are known for packing plenty to do onboard, so a cruise over 7 nights does not mean there is not always something going on or parties each night.

Short sailings tend to attract younger guests who are looking to get away for a long weekend, especially during times of the year when school is out of session.  

Royal Caribbean is a family cruise line that has a good mix of guests of all ages, regardless of the cruise length, so 3 or 4-night cruises are not exclusively kids, while 7-night or longer cruises are not filled with just baby boomers. You may just find different attitudes toward why they booked the cruise.

Objectively, a shorter sailing means you have less time onboard to experience everything your ship has to offer. Royal Caribbean's ships are designed to be destinations in and of themselves, and that means there is a lot of fun things to do onboard. On a short cruise, you will be hard pressed to find time to work it all in, which may simply be a good reason to book another short cruise later.

Ship age

If you want to cruise on Royal Caribbean's newest cruise ships, you will almost certainly have to book a longer sailing.

In order to maximize the earnings potential of a new cruise ship, Royal Caribbean will schedule its newest ships to offer sailings of 7-nights or longer. 

The age of a ship is not the be-all and end-all of what makes a "good ship" or a "bad ship",  but if you want to check out the latest and greatest Royal Caribbean has to offer, a longer sailing is likely what you will have to book.

That is not to say a short sailing has to be on a floating relic. Royal Caribbean spends millions of dollars investing in their fleet, and ensuring their ships have more in common than different.

In fact, some ships offering short cruises to The Bahamas have some of the most impressive recent refurbishments. This means while they may be older, they still offer a lot of fun (and at a lower price).

Is a short or longer cruise better?

Ultimately, the decision to do a short or longer cruise depends on what you want from the vacation.

Short cruises are budget friendly, offer a fun atmosphere, and will fit nicely into a long weekend.  

Longer sailings will mean more time to explore the ship, more exotic destinations and potentially cheaper per-night costs.

Depending on what factors are important to you, there can be clear decisions for either type of cruise.

In general, I advocate longer cruises simply as a means to enjoy a longer vacation. Short cruises seem to go by in a flash, and while they are better than no cruise at all, all things being equal, a longer sailing feels more fulfilling.

Royal Caribbean Group Chairman and CEO Richard Fain spoke openly about about the state of the industry in a recent video posted, seeing "encouraging" progress in the cruise industry.

With the cruise industry in the midsts of a 5-month long shutdown and more to come, a positive outlook is always a welcome change of pace.

Mr. Fain talked about the bright spots of good news coming out of cruising, that leads him to believe things are getting better.

"So we're not through this yet, but there are more bright spots and bits of good news than there have been for quite a while," Mr. Fain remarked, "We are closer to the other side of this crisis every day."

In addition to news about different vaccines and treatments, Mr. Fain was happy to see some European cruise lines successfully resume operations.

"In Germany, our joint venture company, Tui Cruises, has been operating cruises since late July. In Italy, MSC Cruises started operating last week and has attracted a lot of really very positive publicity. We understand Costa Cruises is starting operating there in just a few weeks."

Slow return of cruises

Mr. Fain emphasized the strategy of cruises starting back up "slowly and methodically", and the need to learn from these first cruises back.

For a few months, Royal Caribbean Group executives have emphasized the need to start cruises slowly and with the right procedures in place.

In early August, Mr. Fain spoke about this topic during an earnings call with analysts where he emphasized the importance of making sure cruises are safe before they start up again.

"It's fair to say that there is still a lot of uncertainty against this backdrop. We will not rush to return to service until we are confident that we have figured out the changes that we must make to offer our guests and crew strong health and safety protocols with the enjoyable experience that they rightly expect."

As a result of so many cancelled cruises, guests have the choice of turning their cruise deposits into future cruise credits that can be redeemed later, but you should be aware of a few important limitations on how these vouchers can be used.

For most people, future cruise credits are a flexible and lucrative way to hold onto their deposits and cruise fare costs, and turn them around to be used on a Royal Caribbean cruise in 2021 or beyond. Royal Caribbean has even given guests bonus credits when they cancel a cruise.

While future cruise credits work well for most people, you should be keenly aware of the FCC rules to ensure you know exactly if a future cruise credit is the right choice for you.

You cannot get more Future Cruise Credit if Royal Caribbean cancels your cruise later

In order to put traveler's minds at ease with so much uncertainty, Royal Caribbean introduced the Cruise with Confidence program where guests can cancel their cruise at any point up to 48 hours before the cruise in exchange for a 100% future cruise credit.

If you choose to cancel on your own, and later on Royal Caribbean cancels that sailing and offers guests 125% future cruise credit, you cannot take advantage of that more lucrative offer later.

Credits taken from the Cruise with Confidence program are not refundable at any point in time, even if Royal Caribbean subsequently cancels the cruise.

Additionally, Cruise with Confidence Future Cruise Credits have no cash value and cannot be exchanged for a refund.

So you can either cancel with the Cruise with Confidence offer, or see if Royal Caribbean will cancel your cruise later.

You cannot use future cruise credits between brands

While Royal Caribbean International is one of many cruise lines owned by the Royal Caribbean Group, your cruise credits cannot be used on another sister cruise line.

Cruise credits from a Royal Caribbean International sailing cannot be used towards a sailing on Celebrity Cruise Line, Silversea or Azamara.

You cannot use more than one future cruise credit per guest

This is the most surprising caveat for many guests, but you are limited to one FCC per guest.

At this time, only one FCC can be applied to each guest in a reservation. Future Cruise Credits are not stackable.

Royal Caribbean now allows guests to combine FCCs.

You cannot use future cruise credits towards taxes or fees

When Royal Caribbean calculates your future cruise credit, they based it on the total cruise fare paid by the guest, minus taxes and fees (those extras get refunded).  Similarly, you cannot apply a FCC towards those extra costs.

FCCs do not cover taxes & fees or other booking components - such as prepaid gratuities or transfers. Taxes/fees must be paid using another form of payment.

You cannot convert a Future Cruise Credit into onboard credit

Another common question is if you can apply a future cruise credit to a reservation, and use any leftover credit for onboard credit for that sailing.

If the value of your FCC exceeds the cruise cost, any remainder credit will be re-issued for the remaining balance in a new voucher. You cannot convert it to onboard credit.

Guarantee staterooms are a tempting offer: pay less for a cabin without the ability to choose the exact location, but is it worth it?

Many cruisers find the lower price very appealing, but are concerned they are making a mistake by playing roulette with their stateroom location.

Here is what you should know about guarantee staterooms on a cruise, and if they are worth giving a try.

What is a Guarantee Cabin?

A guarantee stateroom is when Royal Caribbean (and most other major cruise lines) give you a discount on a particular category of rooms in exchange for giving up the ability to choose your exact room.

This means once you book, you do not know the exact room assignment. At some point in the weeks leading up to the cruise, your stateroom assignment will appear.

In addition, the cruise line promises at least that category of room, which means there is a slim chance you could be upgraded.

The exact discount you can expect for opting for a guarantee room depends on the sailing.  When you select a category of rooms, you are given the option of going with a guarantee room or choosing one, at which point you can see the savings by going with a guarantee.

Guarantee cabins are a tool the cruise line uses to help fill in the gaps of unsold staterooms. There are simply some rooms that are less likely to get booked, so guarantee rooms help close that gap.

When do you get your stateroom assignment?

There is no definitive timeframe when your cabin actually gets assigned.  It can happen at any point leading up your actual sail date.

Royal Caribbean states a guarantee room assignment is made at some point between 5-30 days before sailing.

Most of the time, a few weeks before the cruise your room is assigned. In some rare cases, the assignment process has taken up to a day or two before the cruise sails, but these are rare.

There is no notification when it occurs, you just have to log into Royal Caribbean's website and check if a room number now appears.

Is a guarantee cabin worth it?

It can be a good deal to book a guarantee stateroom, but it depends on the discount and your tolerance of cabins.

First and foremost, the discount should make you feel comfortable booking a guarantee.  If the price difference is negligible, then you are better off picking your own room.

Equally important is the idea you are okay with your stateroom being somewhere on the ship that is out of your control.  Cruise ship cabins are designed to be as well-appointed and noise-free as they can be, so the odds are you will not end up with an awful room.

If you are very particular about where your stateroom is, then a guarantee cabin is not for you. However, if you are flexible with the room location and want to get the lowest possible price (with maybe a chance at an upgrade), then going with a guarantee is not a bad plan.

Royal Caribbean Group announced it will cancel all sailings departing from Australia and New Zealand on or before October 31, 2020.

In addition, Royal Caribbean suspended China itineraries on Spectrum of the Seas through the end of September and Quantum of the Seas through October 1, 2020.  

The announcement made on Thursday morning in Australia matches the cancelled cruise status in North America and Europe.

Royal Caribbean issued a statement that the decision to cancel cruises in Australia was made out of a necessity for safety.

The health and safety of our guests, crew, and the communities we visit is our top priority. As we work with health and government authorities toward this shared goal, Royal Caribbean International and Celebrity Cruises will be extending the suspension of sailings to include those departing from Australia and New Zealand on or before October 31, 2020. We will be reaching out to our guests and travel partners to share further details and address any questions or concerns they may have.

The announcement comes weeks after Royal Caribbean Group executives hinted there was a chance cruises could resume first in Australia.

Royal Caribbean International CEO Michael Bayley noted that while cruise operations are suspended until November, Australia and China are the exceptions.

"It may well be possible that we'll resume operations in China and potentially Australia before the end of October."

Mr. Bayley was quick to add that "there's some possibility" of it happening, but far from a certainty.

Royal Caribbean is offering half off its popular unlimited alcohol packages on select sailings of Navigator of the Seas and Symphony of the Seas.

The new offer runs between August 26-27, 2020 and is applicable to just Navigator of the Seas & Symphony of the Seas sailings  from January 1, 2021 - August 30, 2021.

The cruise line says it will offer up to 50% off onboard prices of the Deluxe Beverage Package, and it "has limited inventory and is available on a first come first serve basis."

This is a new type of offer, as usually drink package discounts (and Cruise Planner sales in general) are usually offered for the entire fleet, but rarely with this deep of a discount.

It's our best selling Deluxe Beverage Package - but at half off onboard prices - making this our best deal ever. There's a limited quantity available for your clients' sailing at this special price, so book theirs today!

As of this posting, one RoyalCaribbeanBlog reader reported seeing a $44 per person, per day cost to the Deluxe Beverage Package for a January 2021 Symphony of the Seas sailing.

To check if your sailing has this new offer available, log into the Cruise Planner on Royal Caribbean's web site look for any available offers. Keep in mind that not all sailings may see the sale applicable, nor are all offers significantly cheaper than previously posted.

If you spot a better discount on something you already pre-purchased, you should be able to cancel the purchase and then re-purchase the same item under this promotion.

Royal Caribbean Group Chairman and CEO Richard Fain shared a new video where he spoke with the cruise giant's new Global Head, Public Health and Chief Medical Officer, Dr. Calvin Johnson about Royal Caribbean is doing to tackle the challenges ahead with COVID-19.

Dr. Johnson was introduced in late July as the first Chief Medical Officer for Royal Caribbean Group, where he will be responsible for will tackling the needs of the global health and wellness policy, manage its public health and clinical practice, and determine the strategic plans and operations of its global healthcare organization.

Dr. Johnson started off by giving an update on what is new in testing, therapies, and vaccines.

"While vaccines are not an overnight bullet, they certainly are a game changer in terms of protecting us and protecting the individual," Dr. Johnson explained. "There are a number of vaccine candidates that are in what's called clinical trials."

"And those are the the scientific studies and tests of safety and their effectiveness that go through a few different phases to see and make sure that, one, they won't hurt people when they're taking their effectiveness."

"And two, that they'll be effective in getting our body to to generate an immune response to protect against, in this case, the coronavirus. "

Advances in testing

In addition, the important of testing was emphasized by Dr. Johnson, "testing is actually a very important tool in terms of coronavirus, both in terms of diagnosing it and in terms of helping us to contain the spread."

Mr. Fain specifically mentioned a new saliva test, which he feels will be a "game changer" for enabling fast and easy testing.

"This new test we're hearing about this ability to do it based on saliva, that will really be a game changer because it's fast, it's easy, and allowed to do so many tests that we can really get this thing under control. Some people calling it a suitable vaccine"

Dr. Johnson also seemed excited about this new test, "This saliva... test is one where it's not very invasive to to get it....And we expect it to be increasingly accurate over time."

Cruises starting up again

Dr. Johnson also spoke about the efforts Royal Caribbean is making to get back to cruising, while keeping things as safe as possible for guests and crew.

Under his leadership, Dr. Johnson will be in charge of keeping 75,000 crew members and 4-5 million guests per year.

He believes technology will be an important tool to assess health status, and gather data.

"Another area, Richard, is analytics and using that that data in a way that really informs us about how we can improve and be more efficient, whether it's our public health inspections or whether it is again delivering direct care, all focused on preventing illness primarily, but certainly recognizing it early and preventing those negative outcomes."

Royal Caribbean will keep Grandeur of the Seas in the fleet instead of transferring her out to another cruise line.

The cruise line informed travel agents on Wednesday that it has cancelled plans to move Grandeur out of the fleet in Spring 2021 and send her to Pullmantur.

"With the recent news surrounding Pullmantur, Grandeur of the Seas will remain as a part of our Royal Caribbean International fleet. Once we have more information, we’ll be sure to share the details and look forward to many more memories to be made sailing on her!"

Royal Caribbean had planned to move Grandeur of the Seas, with the announcement made in October 2019 she would leave the fleet.

Since then Pullmantur Cruises has filed for bankrupcy protection and sold her ships off to be scrapped.

In light of this financial turmoil for Pullmantur, the move of Grandeur seemed unlikely to some, but today's news confirms Grandeur of the Seas will remain in the fleet.

The final sailing of Grandeur was scheduled for March 26, 2021, but new sailings will be announced.

Grandeur of the Seas is a Vision Class ship, and has been sailing out of Baltimore.  It is unclear if Grandeur will remain in Baltimore, or move to another port.  In conjunction with the announcement Grandeur was leaving the fleet, Royal Caribbean said it would move Enchantment of the Seas to Baltimore to replace Grandeur.

The U.S. Centers for Disease Control and Prevention (CDC) removed from its website a 14 day quarantine recommendation for anyone returning to the United States following traveling internationally.

TravelPulse reported the change in policy based on the CDC's website now recommends that people, “Follow state, territorial, tribal and local recommendations or requirements after travel.”

Since the early days of the global health crisis, the CDC had added travelers quarantine themselves for 14 days after going out of the country, but that has changed at some point last week.

While the quarantine recommendation may be dropped, cruise ships are still the subject scrutiny, as traveling on a cruise ship is still listed as one of the "higher risk" activities one can take in regard to going to areas with high levels of COVID-19. The CDC has lumped in cruise ship travel with other higher risk activities such as attending a sporting event, being in a crowded restaurant, going to a large social gathering or being in an area of the world experiencing high levels of COVID-19.

"You may have been exposed to COVID-19 on your travels. You may feel well and not have any symptoms, but you can be contagious without symptoms and spread the virus to others. You and your travel companions (including children) pose a risk to your family, friends, and community for 14 days after you were exposed to the virus."

Many states have their own protocols in place for mandating quarantine following travel to or from those states, including Connecticut, New York and New Jersey. Massachusetts requires anyone coming into the state to provide a negative COVID-19 test upon arrival or agree to self-quarantine for 14 days.

In addition, the CDC advocates wearing a mask when outside, hand washing and keep a sharp eye out for COVID-19 symptoms.