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Royal Caribbean CEO talks fuel surcharge, Icon reveal, smoking in the casino & more

In:
29 Jun 2022
By: 
Matt Hochberg

Will Royal Caribbean ever ban smoking? When will we get more Icon of the Seas details? Can we expect a fuel surcharge?

Michael Bayley speaking at President's Cruise

These were some of the questions Royal Caribbean cruise fans asked President and CEO Michael Bayley during a Q&A session this week.

Royal Caribbean hosts a President's Cruise each year, and there's always an opportunity for the top executive from Royal Caribbean International to take questions from its loyal cruisers.

There's usually an assortment of questions, gripes, suggestions, and compliments included each time, and a few of the questions were intriguing to a wide audience.

In addition to talking about when pre-cruise testing and vaccine requirements might come to an end, Mr. Bayley touched on a few other hot button topics.

President's Cruise flag

Here's what Mr. Bayley had to say when asked some of the top questions.

Will Royal Caribbean ever ban smoking in the casinos?

Casino on Royal Caribbean

Royal Caribbean temporarily banned smoking in its casinos earlier this year during the Omicron variant in order to implement a stricter face mask rule, but that rule was rolled back a few months later.

When asked about revising the smoking policy indoors, Mr. Bayley admitted, "smoking in the casinos is a bit of a conundrum."

"The dilemma is that there are many people who do want to smoke in the casino. I know that's not a popular response, but it's it's the truth."

"I'm not judging anyone or anything, but there's a large group of people who do want to smoke in the casino."

Woman betting casino

He explained, "Every, I would say every couple of years, we do test this and we take one or two or three ships we ban smoking in the casino. And the result is less people go in the casino and that that's the reality of it."

While a full smoking ban in the casino doesn't seem likely, Mr. Bayley said they are looking at ways to create more non-smoking areas, "we're looking at trying to create more smoke free spaces in the casino, which I think will be helpful."

Will Royal Caribbean add fuel surcharges?

Harmony of the Seas aerial

While the price of oil is high, Royal Caribbean still has no plans to add a fuel surcharge to cruise guests.

"The fuel fuel bill for Royal Caribbean is, as you can imagine, it's massive and it's gone up by I don't know what the percentages, but it's a huge chunk. It's hundreds of millions of dollars."

"But at the moment, we're not planning on putting a fuel surcharge on."

Symphony of the Seas sailing away

The cost of West Texas Intermediate oil, a common benchmark, spiked above $120 a barrel at times this year, but has since dropped back to around $110 a barrel. That’s up from around $76 a barrel at the start of the year.

In 2008, the price of West Texas Intermediate peaked at around $146 a barrel. That’s around $192 in today’s dollars, adjusted for inflation.

Mr. Bayley did admit, the issue is still up in the air, "We try to understand what the implications are of a fuel surcharge."

"I'd say we don't know. We've all seen the uncertainty of all of these dynamics. We don't know what's going to happen tomorrow or next week or the week after."

He mentioned the fact Royal Caribbean hedges its fuel quite a bit every year, with 50% of its fuel hedged for this year and a smaller percentage for next year.

When will Royal Caribbean share more information about Icon of the Seas

It seems like everyone can't believe Royal Caribbean hasn't shared more details yet about its next new cruise ship, but everything is still under wraps for a little while longer.

Icon of the Seas is set to debut in late 2023, and Mr. Bayley was asked when they will share more information about the ship, "We are launching Icon of the Seas starting this September."

"By launching, I mean, we are we are starting to communicate. We have a whole planning program of communication, social media, marketing, TV, radio, you name it."

He echoed previous comments about how impressive this new class of ship will be, "It is the next generation of Royal Caribbean ship and we're super proud of the work we've been working on for five years."

"It follows a normal formula of tradition, evolution, revolution."

"So there's much of Icon of the Seas is everything we all love about Royal Caribbean, much of Icon of the Seas is the next generation of thinking for many of the things that we really love about Royal Caribbean."

"And there's a chunk of stuff that we've never done before which is really going to be super cool."

The Pearl

Icon of the Seas sphere installation

Michael Bayley was pretty good at keeping all the Icon of the Seas details under wraps, until he accidently let slip the name of that mystery sphere we've seen photos of for months.

A guest wanted to know what the "big white ball" was, and Mr. Bayley immediately responded, "the Pearl?"

When someone pointed out he said it, he responded, "I know, but I did it by accident.

Sphere installation

Royal Caribbean filed for a trademark for the phrase, "The Pearl" earlier this month.

Will double points promotion return?

One guest wanted to know if Royal Caribbean would ever bring back its double points promotion, which allows guests to get double the usual points per night of the cruise in the Crown and Anchor Society customer loyalty program.

"I'm so tempted to say yes. But I got to tell you our Pinnacle members are not such advocates for the idea."

He then joked, "I know it's very popular and you've got to cling onto it as a memory."

"Unreasonable and unfair" treatment during pandemic

Photo by Liam Davison

Twice during the session, Mr. Bayley was asked about what it was like during the cruise industry shutdown as a result of Covid.

"I've got to be honest with media, particularly in the beginning of the pandemic... we felt like we couldn't get a break."

"It's like we were responsible for COVID."

"Relentlessly reporting was always, always negative about about the industry and Royal Caribbean. I don't think we ever saw a positive article."

"Even on the crewing situation, where we were working night and day to get our crew home, we just received criticism for the current situation."

He went on to say, "At the beginning of the pandemic...the cruise industry was generally regarded as the bad actor, which I have to tell you was totally unreasonable and unfair."