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Coronavirus

New fast and easy COVID-19 test drives Royal Caribbean stock up

In:
28Aug2020

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.

Royal Caribbean cancels all Australia & New Zealand cruises until November due to Coronavirus

In:
Category: 
26Aug2020

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 Group Chief Medical Officer talks vaccines, testing and cruise ship safety

In:
Category: 
26Aug2020

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."

CDC drops 14-day quarantine requirement after international travel

In:
Category: 
25Aug2020

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.

MSC Cruises enforces new health protocols by refusing to let family back onboard cruise ship

In:
Category: 
21Aug2020

While Royal Caribbean cruisers are waiting to see what new health policies the cruise line will come up with, we are getting a preview of what might be an example of one new policy with MSC Cruises.

MSC Cruises resumed cruising in Italy on the MSC Grandiosa, and a family was denied reboarding after they deviated from their cruise line approved shore excursion in Naples, Italy.

The unnamed family was not allowed to re-board after breaking their “social bubble" and leaving the shore excursion.

MSC Cruises laid out a series of new rules and protocols aimed to keep guests safe onboard the ships, as well as prevent the spread of COVID-19.

During this initial phase of operations MSC requires guests only go ashore as part of an organized MSC Cruises’ excursion.

A spokesperson for MSC said the family was not allowed back onboard the cruise ship because they had separated from the organized group trip to go exploring on their own, therefore posing a possible risk to others on the ocean liner amid the ongoing outbreak of COVID-19.

"In line with our health and safety protocol, developed to ensure health and wellbeing of our guests, crew and the communities we visit, we had to deny re-embarkation to a family who broke from their shore excursion yesterday while visiting Naples, Italy," the MSC Cruises spokesperson said on Wednesday. "This family broke from the 'social bubble' created for them and all other guests, and therefore could not be permitted to re-board the ship."

The MSC Grandiosa departed Genoa on Sunday night for a seven-night cruise of the western Mediterranean, with port calls in Civitavecchia, Naples, Palermo and Valetta, Malta.

The Grandiosa's current sailing is the first cruise in the Mediterranean by a major cruise line and vessel since the cruise industry shut down earlier this year.

Royal Caribbean has not yet announced its health protocols

Royal Caribbean has not announced its new health policies and protocols yet, but the cruise line did promise to deliver them by the end of this month.

Royal Caribbean Group teamed up with Norwegian Cruise Line Holdings to form a panel of health experts who are actively working on generating a set of recommendations that both cruise lines can use to keep guests safe.

Ultimately, the panel will work through all the options and practices considered, and come up with the best course of action for the cruise lines.

Why you shouldn't cancel your upcoming Royal Caribbean cruise

In:
Category: 
20Aug2020

If you still have a Royal Caribbean cruise booked for the end of 2020 or sometime in 2021, your best bet is to not cancel the cruise on your own.

There is plenty of concern among cruisers about if their upcoming cruise will actually sail, as well as if they even want to go on a cruise during the current global health crisis. While preemptively cancelling a cruise may seem like a good decision now, you might still want to hang on, even if you know you do not want to cruise.

This article is about why you should wait for at least Royal Caribbean to cancel the cruise before you pull the trigger on cancelling it.

You might regret it later

There are two reasons why you might regret cancelling a cruise down the line.

Financially, you are better off waiting for Royal Caribbean to cancel your cruise than for you to cancel your cruise.

From the beginning of the cruise shutdown, Royal Caribbean has offered far more favorable terms to guests who have their sailing cancelled by the cruise line, than if they opt to cancel.

The classic example is anyone who cancelled before the cruise line and had to settle for just a future cruise credit, instead of the option to get a full refund. 

Moreover, if Royal Caribbean cancels on you, you can qualify for 125% future cruise credit, which is a bonus not otherwise available.

The other reason why you might regret cancelling a cruise later is if you cancel and many months down the line you want to rebook.

Things are changing every day in terms of the cruise line's plans, as well as approaches and treatments for COVID. While things might look not-so-great today, perhaps in Spring 2021 the situation will be very different.

While you might be able to change your mind later and rebook the same sailing, there is a good chance someone else will have booked the cabin you had booked, which means finding a new room available.

You have non-refundable cruise fare

A common reason for cancelling a cruise is to get a cash refund, but if you booked non-refundable cruise fare you can qualify for a cash refund minus the change fee penalty.

If you take advantage of the Cruise with Confidence program and cancel your cruise in exchange for a future cruise credit, you will not be able to get a cash refund at all.

However, if Royal Caribbean cancels your sailing later on, you can choose to get a 100% cash refund, even if you have a non-refundable cruise fare.

You can cancel up to 48 hours before your cruise begins

There is little risk in waiting to cancel. Even if Royal Caribbean were to resume cruises and you decide you prefer not to sail, the Cruise with Confidence program.

This means you can wait and see what happens, and decide at anytime until 2 days before your cruise begins to actually cancel for a 100% future cruise credit.

Cruise With Confidence 48 Hour Notification Window
IF YOU ARE SAILING ON…YOU NEED TO CANCEL BEFORE…
MondayMidnight Friday in the time zone your ship leaves from
TuesdayMidnight Saturday in the time zone your ship leaves from
WednesdayMidnight Sunday in the time zone your ship leaves from
ThursdayMidnight Monday in the time zone your ship leaves from
FridayMidnight Tuesday in the time zone your ship leaves from
SaturdayMidnight Wednesday in the time zone your ship leaves from
SundayMidnight Thursday in the time zone your ship leaves from

This kind of flexibility means you do not have to make a decision now, and take advantage of the best information available closer to your sail date.

What if Royal Caribbean goes bankrupt?

I have heard from some cruise fans they are worried Royal Caribbean will not be able to survive the extended cruise shutdown, but there is quite a bit of time before a bankruptcy scenario could occur.

In Royal Caribbean's second quarter earnings report, as of June 30, 2020, the Company had liquidity of approximately $4.1 billion all in the form of cash and cash equivalents. A few weeks later, Royal Caribbean announced it has secured a new $700 million term loan facility.

Most Wall Street analysts believe Royal Caribbean Group has enough cash on hand in order to survive until at least the end of 2021 with no income.

All of that points to the likelihood of a bankruptcy forfeiting your balance with the cruise line to not be a consideration anytime soon.

Arrival of Royal Caribbean ships to St. Kitts delayed due to health concerns

In:
20Aug2020

Just days after the Federation of St Kitts and Nevis announced two Royal Caribbean ships would be allowed to harbour, the arrival of the first ship has been delayed as health experts consider additional information.

ZIZ reports the scheduled arrival of Rhapsody of the Seas on Wednesday, August 19, was delayed. Vision of the Seas is scheduled to arrive on August 24.

Prime Minister Dr. the Honourable Timothy Harris told concerned locals, "much was considered and deliberated on over a two-week period before the Royal Caribbean Cruise Lines was given the greenlight for safe harbour for two of its vessels".

The Prime Minister added that his experts have advised the risk is low with granting safe harbouring of both ships, as crew members on both ships are required to have a negative COVID-19 test results before boarding from their home countries.

The crew members will all be retested at the end of 14 days and only released from quarantine if they all test negative. It is only after the return of a negative RT-PCR test on day one and day 14 will they be allowed to disembark the vessels.

Moreover, the Prime Minister added the health risks to the citizens of the island are low, "but in the medium term we will benefit."

Two Royal Caribbean ships will be allowed to port at St. Kitts

In:
17Aug2020

St. Kitts and Nevis announced on Monday it will allow two Royal Caribbean cruise ships to stop at St. Kitts.

Vision of the Seas and Rhapsody of the Seas will be able to harbour at Port Zante.

Lindsay Grant, Minister of Tourism, said each crew member will be given an RT-PCR test upon arrival and quarantine for 14 days on their vessels. When all crew members receive a negative test at the end of their quarantine, they will be allowed to disembark while observing social distancing and mask-wearing safety measures.

There are currently zero active cases of COVID-19 on the island.

"The health and the safety of our citizens, residents, and of our visitors remains our number one priority […] We have taken all the necessary health and safety protocols to ensure that St Kitts and Nevis remains safe." Minister Grant noted. "This assistance represents the true nature of our people to support others in a time of need," he added.

CDC begins posting public comments on cruise ships starting up

In:
Category: 
14Aug2020

The U.S. Centers for Disease Control and Prevention (CDC) has begun posting comments from the public on how cruises should restart again.

Since July 24, the CDC has been asking for feedback from the general public on cruise lines resuming passenger operations.

As of the writing of this post, over 900 comments submitted to the federal agency have been shared on the regulations.gov site.

Each submission has the submitter's name, along with their comments.

Strong opinions on cruising

If you take the time to browse the comments, you will find submissions that are a few sentences to many pages long.

Most of the comments seem to be in favor of cruises returning to service, and suggest new policies to keep guests safe.

"We cruisers are more than ready to resume cruising so PLEASE provide for cruising to resume! Fewer passengers, stringent cleaning procedures and no buffet lines would help." - Leelana Orr

"Covid test before you cruise. bring proof you're all clear. Temp checks when entering ships. Even cruise to ships private islands would be fine." - Elizabeth Dunai

"I have read some information via various news sources about the joint venture of Royal Caribbean & Norwegian cruise lines to develop a document of new safety protocols & processes. While not all encompassing, these new protocols & processes for keeping guests & crew safe, ultimate sanitation, etc., has made me feel confident that the cruise lines are taking Covid 19 very seriously." - Donna Gilleece

Many guest have also urged a more realistic approach to cruises that cannot eliminate all risk.

"The industry needs to be allowed to reopen and the public needs to be empowered to make decisions regarding their health and wellbeing when traveling." - Zdravko Galinec

"Truthfully the cruise ships are far more cleaner than Walmart . Please allow them to reopen even if it is at reduced capacity" - Julie Ozsoy  

Some that submitted comments urged more caution in any kind of return.

"In my opinion, cruise ships are a Covid-19 petri dish and should not be allowed to operate until a vaccine is developed or the virus infection rate significantly diminishes." - Greg Walker

And then there are a lot of comments from people who believe the CDC have overstepped their authority.

"I have worked as a federal employee for over 20 years in HealthCare and am appalled by your total abuse of power." - Robin Divers

"The cruise industry has taken a disgraceful public relations denouncement from the CDC. This is unjustified and unfair." - Anita Weiss

"Let us decide if we are comfortable, not the government. It's an abuse of a non-enumerated power." - Gerald Gleason

There is still time to submit your comments

You can submit comments online or via the mail.

To complete it online, visit the Federal Register's E-Rulemaking Portal by going to the U.S. Federal Register's website.

Be sure to use the Document ID to search for this page: CDC-2020-0087-0001.

    

Royal Caribbean: We're doing that without relying on the US government

In:
Category: 
11Aug2020

With the United States Congress mulling over stimulus and economic relief ideas, the cruise industry is already planning to go without any federal assistance.

In an interview with CNBC, Royal Caribbean Group Chairman and CEO Richard Fain was asked if his company was willing to change being incorporated from Liberia to the US in order to increase the chance of getting financial relief.

Mr. Fain flat-out rejected the notion, saying that Royal Caribbean Group is, and has, been working to stay solvent without any financial assistance from the United States.

"We started with a strong balance sheet. We've taken a lot of steps to improve our liquidity. We've taken a lot of steps to bring our costs under control," Mr. Fain said bluntly. "It's a very painful process we've gone through."

"But we're doing that without relying on the US government. We're doing that on our own."

There was speculation that perhaps cruise lines, which have been hit hard by the global health crisis, might qualify for bailout money to remain operational.

Royal Caribbean and other cruise lines were subject to the same speculation in March 2020, when the first round of federal money was given out to boost the economy, but they were ultimately not included.

Royal Caribbean Group, the parent company of Royal Caribbean International, is incorporated in Liberia.

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