Royal Caribbean: Mid-July Restart ‘Very Realistic’

On the heels of the CDC stating that cruises could return in July — including a letter to cruise lines that eased some requirements to restart — Royal Caribbean has offered even more reason to be optimistic.

In a quarterly investor call providing a business update, the cruise company sounded high hopes about a return this summer.

“Last night, the CDC issued multiple very constructive clarifications and modifications of its Conditional Sail Order,” Royal Caribbean Group CEO Richard Fain said. “We believe this communication really helps us to see a clear and achievable pathway forward to safe and healthy cruising in the near future.”

“But an important caveat is that this is a very complex area. And we only received the letter last night,” Fain cautioned. “Nevertheless, we now have high hopes… it could be possible to restart cruising by mid-July.”

Later in the call, Royal Caribbean International President Michael Bayley re-emphasized July for a possible restart.

“I think the target that’s being stated and we’ve all been working towards is mid-July,” said Bayley. “And I think that, after what we received last night, is looking very realistic.”

CDC Offers New Guidance to Speed the Return

The last several weeks have been full of tension between the CDC and those that want to return sailing. Cruise Lines International Association (CLIA) — and industry trade group representing most cruise lines — has sounded sharply critical of the CDC’s Conditional Sail Order.

The order, which was aimed to allow cruises to return safely, has turned into a major obstacle. Cruise executives have called it “burdensome” and “almost unworkable.” Congressional members have called for return to sailing and the state of Florida has also filed suit to allow cruises to resume.

At the heart of the matter is a complex set of rules within the order that lines must follow before the CDC will allow them to sail. This includes having a number of agreements in place with ports and health authorities, plans for quarantining, testing, simulated test cruises, and an application to return to sailing. Test cruises and the application to return to sailing also come with long notification times of 30 and 60-days, respectively, further slowing a return.

Seemingly in response to the criticism — and the rollout of vaccines — the CDC is now softening its stance somewhat. Last night, the agency reportedly told cruise lines they would be able to skip the test cruises if 98% of crew and 95% of passengers are vaccinated. As well, the 60-day lead time for the application for a certificate to sail has been cut to five days.

This would dramatically cut the timeline to return, which was covered by Royal Caribbean’s Michael Bayley during the call.

“I can’t give you how many weeks and days. I think, again, what we understood and interpret what we received last night [from the CDC], if you’re planning on a highly vaccinated cruise, there will be no requirement for a simulated voyage and the previous 30-day notification and process for simulation and then the subsequent 60 days for notification and the process for your first actual revenue sailing, has effectively been removed,” Bayley said in the update with investors.

One important point is that the quick restart of cruising depends on passengers being vaccinated. The new CDC guidance cites the ability to speed up the return process if high levels of crew and passengers are fully inoculated.

So far, Royal Caribbean Group has yet to make a blanket policy across its cruise lines regarding the need for the shot. It is sailing both vaccinated and unvaccinated cruises from different ports around the world.

In the recent call the company mentioned the possibility of two “pathways” to return, including vaccinated cruises that sail sooner and those without the requirement that might be later and with more protocols in place.

It also shared that about 80% of its customers say they will either be vaccinated or plan to receive the shot. Nearly 100% of crew members said they’d be willing to get the vaccine. 

Of the 125,000 passengers Royal Caribbean Group has carried since it return to sailing from some ports, it says there have been only 21 cases of COVID reported.

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