Coronavirus

Royal Caribbean: "We're not sure when we're coming back"

In:
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23May2020

The most asked question about Royal Caribbean, and cruising in general, is when will cruises resume sailing, and Royal Caribbean is still sorting that out as well.

With Royal Caribbean's announcement last week it was canceling all cruises through the end of July, the company updated its website to indicate it will return to service on August 1.

However, Royal Caribbean Cruises Ltd. Chairman and CEO Richard Fain spoke on CNBC last week and was frank with his answer about when his company will start sailing again.

"Well, I think we have said that we're not sure when we're coming back. We won't come back until we're absolutely sure that we've done everything we can to work to protect the safety of our guests and crew."

"We said when we we won't be back before the end of July, but we we haven't gone to the next step of saying we're absolutely confident that we're starting on August one."

"We will work with the authorities. We will work with all the experts that we have asked to help us on this, to make sure that we are doing everything we can to protect our guests and crew."

What to expect

Without a doubt, you are likely wondering when cruising will start back up again and what date to believe.

For now, you should take Royal Caribbean's date of operations to resume on August 1 as the defacto answer, but prepare for more cancellations.

The answer of when cruises will resume may be better determined by looking out your window and seeing when life begins to return to some kind of normalcy. The sooner daily life starts back up, the less impediments the cruise lines will have to face in starting up again.

Australia extends ban on cruise ships until September 17

In:
22May2020

The Australian Border Force announced it has extended its ban on cruise ships until September 17, 2020.

The Australian Border Force said in a statement: "On 15 May 2020, the Governor-General has extended the human biosecurity emergency period for an additional three months, from 17 June to 17 September 2020. This has enabled the Minister for Health to continue to exercise the emergency powers under the Commonwealth Biosecurity Act to prevent or control the spread of COVID-19."

"On 20 May 2020, the Minister for Health extended the determination to prohibit the arrival at an Australian port of any international cruise ship that has left a foreign port. The restrictions included direct arrivals and Round Trip Cruises."

The ban prohibits any cruise ship capable of carrying more than 100 passengers is prohibited from operating cruises in Australia, including direct arrivals and round trip cruises.

The ban was put into place on March 27, and was set to expire in June.

"The Australian Border Force has been in constant contact with the cruise industry which has been cooperative and understands the Government's overwhelming priority to ensure the health and safety of the broader Australian community," the ABF said in a statement.

Why it is taking so long for some people to get refunds from Royal Caribbean

In:
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21May2020

Royal Caribbean announced on Wednesday it has cancelled another batch of cruises, and that means thousands more guests will be waiting for refunds and future cruise credits to be processed on top of the many more that are still waiting for refunds from their cancelled sailings.

It is no secret Royal Caribbean, and all cruise lines, are struggling to process refunds in a timely manner. Royal Caribbean has issued public apologies for the delays, but the lag in getting the money back to consumers is still a source of frustration for many.

So why are refunds taking so long to be processed and payed out?

The answer from the top

During a webinar with travel agents on Wednesday, Royal Caribbean Cruises Ltd. Chairman and CEO Richard Fain was asked about the delays in refunds and issuing future cruise credits, and could he address what the cruise line is doing about those delays.

Mr. Fain started off with saying the cruise line has two top priorities at the moment: repatriating crew members to their home countries and getting refunds out to guests.

Two issues were identified by Mr. Fain as causing friction in the processing of credits or refunds: many employees having to work from home and "a dramatic increase in the number of cancellations and refunds."

"So the volume simply exploded. And a very nice system that worked for a volume of X doesn't work per volume of 50 times X or whatever the number is, but we simply weren't prepared for it. And by the way, this requires more training than other things."

According to Mr. Fain, compounding the problem is how the credit card companies work to process these requests.

"We also found that the credit card companies weren't equipped to handle this as quickly as we thought. And so in some cases, we would send them a notice to put a credit on somebody's account. And it was taking up to 10 days to actually get posted through again. Once we understood it and we really dealt with it, that we were able to deal with."

In light of these issues, Royal Caribbean has worked to expedite the refund process, although that is still a work in progress.

"We have sped this up, so I think we're getting better at it, we're bringing it more under control. It's still not as as fast and as efficient as we would like it to be. But again, it is the combination of the volume that we simply weren't prepared for and have never experienced, combined with the inefficiency of so many of our people working from home."

With more cancelled cruises and longer delays in refunds, it creates an even bigger problem.

"When something like this happens, it it builds on itself. And so this same issue also reverberates into affecting our call centers. So we start to get more calls. People are on hold longer and it becomes a vicious circle."

What Royal Caribbean is doing to get refunds out faster

With the problem identified, Royal Caribbean is not content with maintaining the status quo.  Mr. Fain explained what the cruise line is doing to get refunds out faster and improve the process.

"What we're working to do is convert the vicious circle into a virtuous circle. We've added technical capabilities to hopefully speed up more of the processes. We've added a lot of people to the process. So the the numbers, and I and I get a daily report on the numbers of delays in refunds and FCC fees, are coming down."

"We're not to a point yet where I no longer need to get that daily report. And I look forward to that day. But where we're making progress towards it."

Royal Caribbean Senior Vice President of Sales and Trade Support & Service Vicki Freed also added by apologizing for the issues, and re-assuring travel agents that they are working on it.

"We do recognize travel advisors that the whole time have been long, and we apologize, it's not level of service. We strive to have at Royal Caribbean. So we hear you. We are aware of it."

"But we promise you we're going to keep working really hard to reduce those long hold times. Now, with the new suspension announced today, it's not going to get easier."

"So standby, we're aware of it travel partners, and we will do better. We need to do better, because you deserve us to be doing the right thing for you."

Demand for cruises by repeat cruisers surprises Royal Caribbean

In:
20May2020

Royal Caribbean held a call with investors this morning to discuss its first quarter 2020 results, and touched upon a variety of topics related to the current business climate, as well as what the future may look like.

During the hour-long call, Royal Caribbean Cruises Ltd. executives answered questions related to return to service, refunds, future demand and more.

Surprisingly high demand by cruise fans

Despite all the upheaval in the cruise and travel industries, Royal Caribbean reports its brand loyalty members are showing surprising dedication to the cruise line.

Royal Caribbean Cruises Ltd. Chief Financial Officer Jason Liberty touched on the subject, "Our loyalty guests have really just been absolutely incredible in their support, and you can really see their love of cruising as they begin to want to focus further out."

Royal Caribbean International President & CEO Michael Bayley also spoke about the loyalty of cruise fans, "I think we've really seen surprising demand from our loyalty members, and remember we've got close to 20 million loyalty members. Their response to various promotions that we've put into the market, just to understand what the demand looks like is been surprisingly positive. So, as we move into Q4 and into '21, we've been honestly surprised in terms of the demand that we've seen coming in, particularly from loyalty guests."

Outlook on cruising resuming

Of course, the question everyone wanted to know is about Royal Caribbean starting cruises again. While Royal Caribbean provided no firm dates on when they plan to cruise again, executives did touch upon its approach to resuming sailings.

Royal Caribbean Cruises Ltd. Chairman and CEO Richard Fain started off the call touching on the matter, "While it's very difficult to have any certainty around the timing or shape of a recovery we do intend to make sure that we are prepared for it and for the changes it will entail. To this end, we are focused on all aspects of our safe return just to serve as strategy with special emphasis on safety security and health. We know that the public expects that we will elevate our health and safety protocols to a new level. We are prepared to make sure that we meet and exceed those expectations."

"We have been and are working on ways to up our game in this field to ensure that we use our ingenuity, our passion, and our innovation, raise the bar to new heights. We are calling our aspirational program the healthy return to service program. The program will have four main focuses: upgraded screening prior to boarding, enhanced processes and procedures onboard, special focus on addressing the destinations we visit, and procedures for dealing with any reports of exceptions."

"It is tempting to start talking now about all the individual components of how things will change. However, we still defining all those enhancements, and we're still taking guidance from our expert advisors. And this process will continue in keeping with our mantra of continuous improvement."

"The one thing that won't change is our determination that we will not start operations until we are fully ready to do so with all the hygiene and other health protocols solidly in place."

Not all ships will start up at once

Continuing comments made over the last few weeks, Mr. Fain reiterated that when Royal Caribbean starts sailing again, the entire fleet will not resume at once.

"We don't expect that... someday somebody blows a horn, and all the ships start operating right away. We think that it will be a gradual start, a little bit like society is opening up gradually."

"So we would imagine that we would start with fewer ships, and more likely to be more drive markets in the beginning, and then it would then evolve and grow from there."

Millennials vs. Baby Boomers

An intriguing stat shared during the call was Mr. Liberty's breakdown of who is taking refunds versus future cruise credits based on age.

Younger cruisers, specifically millennials, typically opt for a cash refund, whereas families and baby boomers are more likely to take a future cruise credit.

Big ships vs small ships

One of the questions asked was if bigger or smaller ships made more sense to start cruising first, and Mr. Liberty talked about how bigger ships are better situated to handle the demands, both financially and socially.

"Load factors can be lower because they have great economies of scale, they're extremely fuel efficient, and the cabin cabin category makes it very rich. Really more broadly within the fleet, public space per berth is very good. But certainly the newer ships have more public space per passenger. And would be heavily in consideration for the return to service, as well as other ships that we've modernized and having more venues on to."

Royal Caribbean will cancel all sailings through July 31 due to coronavirus

In:
Category: 
20May2020

During a call with investors, Royal Caribbean International CEO Michael Bayley announced on Wednesday the cruise line will cancel all sailings through July 31, 2020 due to the coronavirus pandemic.

When asked directly by a Wall Street analyst, Mr. Bayley confirmed Royal Caribbean will match other cruise lines by extending its global suspension of cruises through July 31, 2020.

"Our plan is this afternoon we'll be announcing further suspension for voyages until the end of July, until July 31st. The only exception to the suspension will be our China operations."

Due to the COVID-19 pandemic, Royal Caribbean International suspended its global cruise operation starting on March 13, 2020. This new set of cancellations will extend that suspension from June 12, 2020 through July 31, 2020.

NOON UPDATE: Royal Caribbean has issued this official update: "Given ongoing global public health circumstances, Royal Caribbean Cruises Ltd. has decided to extend the suspension of most sailings through July 31, 2020, with the exception of sailings from China, which will be suspended through the end of June."

"We expect to return to service on August 1."

For those currently confirmed on sailings departing June 12–July 31, 2020, and not previously cancelled under our Cruise with Confidence offer, a few options have been prepared for consideration.

Lift & Shift: Select next year’s sailing on the same itinerary type, sailing length, stateroom category, and within the same 4-week window of the original cruise date and your clients are all set. Act quickly — option expires on June 10, 2020!

125% Future Cruise Credit: To account for the inconvenience this has caused, guests are eligible for a 125% Future Cruise Credit (FCC) that is based on the total cruise fare paid at the guest-level and will be automatically issued on-or-before June 30, 2020 — if neither of the other options is selected.

Taxes and fees, as well as any pre-purchased amenities or onboard packages will be automatically refunded to the original form of payment within 45 days from the cancellation date. 

If you previously opted to take advantage of our Cruise with Confidence policy, the 100% FCC will stand, and this new option is ineligible.

Additionally, if you redeemed your Cruise with Confidence Future Cruise Credit on a sailing that is now cancelled, their original FCC will be reinstated, plus 125% of any amount paid by the guest on the cancelled reservation.

Refund: If you prefer a cash refund, you can do so by requesting this option on-or-before December 31, 2020.

You can expect their refund to the original form of payment within 45 days from the cancellation date. 

If you redeemed a Cruise with Confidence Future Cruise Credit on an impacted sailing and would now prefer a refund instead, Royal Caribbean will process this request in the amount of any new funds paid above the original certificate and, in turn, will reinstate the Cruise with Confidence FCC for future use.

United States and Canada extend non-essential travel border shutdown an additional 30 days

In:
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19May2020

The United States and Canadian governments announced they have agreed to extend their agreement to close the border between both countries to non-essential travel until June 21, 2020.

The original agreement for the border shutdown was to expire this week, but the Associated Press is reporting the agreement has been extended an additional 30 days.

The border shutdown was announced on March 18 and then extended in April.

Royal Caribbean had already cancelled all of its cruises to Canada through June 30, 2020, primarily due to the Canadian government closing its ports to cruise ship traffic until at least July 1.

Essential cross-border workers like healthcare professionals, airline crews and truck drivers are still permitted to cross.

Americans who are returning to America and Canadians who are returning to Canada are also exempted from the border closure.

American biotech coronavirus vaccine shows positive results in early human trials

In:
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18May2020

An American biotech company announced its coronavirus vaccine resulted in positive interim clinical data in its first human safety tests.

Moderna published the results of its vaccine candidate against novel coronavirus (SARS-CoV-2), from the Phase 1 study led by the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH).

These results have not been published in a scientific journal and are only a first step toward showing the experimental vaccine is safe and effective.

The results show an increased level of antibodies in the 8 patients given various dose levels that matched the levels of antibodies blood samples from people who have recovered from COVID-19.

The vaccine, known as mRNA-1273, was generally safe and well tolerated. The only side effect was in one patient where there was redness around the injection site.   

"With today’s positive interim Phase 1 data and the positive data in the mouse challenge model, the Moderna team continues to focus on moving as fast as safely possible to start our pivotal Phase 3 study in July and, if successful, file a BLA," said Stéphane Bancel, Chief Executive Officer at Moderna. "We are investing to scale up manufacturing so we can maximize the number of doses we can produce to help protect as many people as we can from SARS-CoV-2."

Countries and private companies around the world are in a race to create a working vaccine, and the U.S. is aiming to have hundreds of millions of doses of a vaccine broadly available by the end of the year.

The cruise industry has been especially hard hit by COVID-19, and the result has been ships not sailing since March and tremendous financial losses.

A vaccine is widely seen as a key step to restoring consumer confidence that going on a cruise, as well as various other aspects of daily life, is safe. Meanwhile, over 75% of cruise fans are willing to return to a cruise even without a vaccine.

Royal Caribbean currently has cancelled all sailings until at least June 12.

How to postpone your Royal Caribbean cruise until later due to coronavirus

In:
Category: 
18May2020

While it looks like the majority of repeat cruisers are willing to hop on their Royal Caribbean cruise as soon as they resume, you might be feeling a little hesitant and want to push back your vacation plans.

If you want to postpone your cruise vacation and give yourself more time to see how things around the world progress, here are the two easy ways to delay that cruise.

Cancel and get a Future Cruise Credit

If there is a silver lining to the current situation, it is that it has never been easier to cancel a cruise.

Royal Caribbean has come up with very flexible terms, with the option to cancel and get a 100% Future Cruise Credit up to 48 hours before your ship is scheduled to sail.

Known as the "Cruise with Confidence" program, Royal Caribbean will allow anyone to cancel their cruise up to 2 days before departure date and get a credit good for 12 months or more..

Once you have the credit, you can then apply it towards a future sailing. The Cruise with Confidence program applies to existing bookings and new ones made by August 1, 2020.

It is important to note that the vast majority of guests have reported long waits to get a Future Cruise Credit. Waiting 30 days is not uncommon, and closer to the norm.

Why get a FCC: If you are unsure when you want to rebook, or need flexibility in what you are going to rebook, this is the option for you.

Lift & Shift

More recently, Royal Caribbean introduced the concept of Lift & Shift, where you can push your existing reservation ahead by one year.

This is a simpler method for delaying a vacation by a year, provided you are able to meet all of these requirements for your 2021 cruise:

  • Same itinerary type
  • Same sailing length
  • Same stateroom category
  • New booking within the same 4-week period of their original cruise date same-time-next-year

You do not need to book the same ship or even class of ships.

Not only will this make the booking easier to move, but Royal Caribbean will protect your original price and promotional offering.  So the price you paid for that 2020 cruise will be exactly what you pay for 2021.

To be eligible, guests must move their booking on or before August 1, 2020.

Why Lift & Shift: If you take vacations around the same time every year, and want to punt on 2020, this is a very easy way to move it and keep your pricing intact.

Why you might want to wait to cancel

If these two options sound appealing, there is one more thing to consider: what happens if Royal Caribbean cancels on you.

In the event Royal Caribbean cancels your cruise, they have offered more lucrative terms to guests, including 125% Future Cruise Credits and/or 125% for onboard purchases previously made. 

Moreover, if you cancel and/or Lift & Shift, you no longer qualify for whatever the cruise line offers if they later cancel your original sailing.

Waiting for Royal Caribbean to cancel is a gamble, since they may not actually cancel the cruise you booked. Not to mention any related travel expenses (airfare, hotels, etc) are your responsibility to book and manage their cancellations.

Be sure to pay attention to when programs like Lift & Shift or the Cruise with Confidence program expire, as these are temporary options Royal Caribbean is offering, with no guarantee they will be extended.

More helpful posts

Here are a few other additional articles I think are helpful for those dealing with cruising during the COVID-19 pandemic.

Many cruisers willing to go back on cruise ships before COVID-19 vaccine exists

In:
Category: 
18May2020

The majority of Royal Caribbean fans say they will go on a cruise before there is a vaccine available that would protect from from COVID-19.

In a poll of likely Royal Caribbean cruisers, 75% of those surveyed said they would go on a cruise without a proven vaccine in place.

Only 7% responded they would not, and a further 17% were unsure what they would do.

More than 250 likely cruisers answered this survey. The majority hailed from the United States, but there were respondents from other regions of the world as well, including Australia and Europe.

With many states beginning to lift restrictions aimed at enforcing social distancing, the question of life returning to "normal" in all aspects raises concerns across the board.

Cruisers want to cruise

You may not find it surprising that most cruise fans that visit a Royal Caribbean fan site would be willing to cruise, but this demographic is going to be critical to any cruise line once sailings resume again.

When Royal Caribbean starts sailing again, many analysts and travel experts expect some level of trepidation to return to sailing. As a result, cruise loyalists will be the cruise line's bread and butter for filling rooms and getting revenue flowing again.

Many of the people that responded to the poll felt strongly about the return of cruising and their desire to get back onboard.

Perhaps more surprising in the poll comments was not that many were willing to cruise again without a vaccine, but that these same people were less interested in sailing if going on a cruise meant wearing a mask.

"Frankly I'm not worried about Covid-19, but what does worry me is the onboard experience. I won't go on a cruise if a face mask is required onboard, that doesn't sound like vacation."
 

"Not concerned about a vaccine, my deciding factor will be what the "new" onboard experience is."

Those that responded they would not go on a cruise shared concern not over what they are doing to protect themselves, but what others are not doing.

"I don't get it, who wants to be sick if you don't have to be? Since so many people fail to grasp what they do affects others, I am going to need a vaccine. A vaccine will ease their burden of stupidity, so someone can disregarding my personal space by taking a selfie, but I can have piece of mind."
 

"The odds of a single contact involving the virus are small, assuming independent events and random exposure.  However, the probability of being exposed to the virus after several hundred contacts approaches certainty.  Just do the math, and you will see.  So we will all be exposed at some point.  I won't cruise until my wife and I feel it is safe -- that we can mitigate the risk, or have access to effective treatment, or have access to a vaccine.  This is still a virus the kills healthy people without underlying conditions."

Your thoughts

Will you go on a cruise before there is a COVID-19 vaccine? Would special rules or regulations that require social distancing and/or masks onboard turn you off from cruising again? Share your thoughts and concerns in the comments.

Italy planning to reopen borders in June

In:
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17May2020

If you are looking for a good sign of things return back to normal, Italy announced it will start allowing some tourists back on June 3, 2020.

Italian Prime Minister Giuseppe Conte presented a plan to open both its regional and international borders on June 3, with the government eliminating a 14-day quarantine for anyone arriving from abroad.

Italy was especially hard hit with the global health crisis, and represents an epicenter of European cruising. Italy has had the most deaths from the disease after the United States and Great Britain.

Bars and restaurants in Italy will reopen on Monday, and people will no longer have to justify travel within their own region and will be able to meet friends as well as family.

Gyms, swimming pools and sports centres will reopen on May 25, while theatres and cinemas can reopen from June 15.

Cruises in and around Italy

Prior to the outbreak, Royal Caribbean had quite a variety of sailings planned to, from, and around Italy.

Explorer of the Seas and Jewel of the Seas are/were scheduled to sail out of Rome (Civitavecchia).

Explorer of the Seas was to offer cruises to the Greek Isles, Western Mediterranean and even a Holy Land cruise. Jewel of the Seas was to offer a 12-night holy land cruise.

Rhapsody of the Seas was scheduled to sail out of Venice, and offer 6-, 7-, and 8-night cruises to Greece, Croatia and the Greek isles.

In addition, a number of other Royal Caribbean ships had stops scheduled in Italy.

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