Royal Caribbean Update: Vaccines, Trial Sailings, & More

It’s been a rough year, but the future looks brighter. That’s the main takeaway from a recent investor call Royal Caribbean Group held to update the public on its current business.

In the hour-long conference call, company executives covered everything from vaccines to what’s happening with the CDC regarding a return to sailing, demand for cruises, and even enthusiasm among crew members to get back to work.

While the company stopped short of saying when cruises might return or if vaccines will be required among passengers, they did offer some insight into what they are seeing and its impact on return to sailing.

Vaccine Requirements For Sailing?

For months there have been questions surrounding if passengers will need a COVID vaccine to sail on a cruise. Some smaller cruise lines have already announced that they will require the shot, but major lines like Carnival, Norwegian, and Royal Caribbean have yet to say.

However, during the call Royal Caribbean Group CEO Richard Fain spoke in-depth about the promise of a vaccine for the cruise industry. He spoke specifically about the impact the vaccine might have given that Royal Caribbean’s Healthy Sail Panel came out with ways to keep passengers safe before the vaccine was available.

“The Healthy Sail Panel’s work and all those discussions were pre-vaccine, and a vaccine really does change it,” Fain said. “We’re really in an interim period where the vaccines are still relatively new. They are coming out amazingly quickly, but it is still going to take months to get huge numbers of people vaccinated. And so, we and the CDC and governments around the world are looking at how that would change it. And we don’t have answers yet.”

Royal Caribbean’s CEO then went on to highlight the promise that vaccines hold for the industry, at one point calling them the “ultimate weapon.”

“One of the things you’ve seen coming out of there [Israel] for example, is the number of people who get the disease and who have been vaccinated, the efficacy is as high or higher than the trials that were done. And this is now on larger numbers of people, so it makes it even more reliable. But more significantly they are also saying the ability to prevent the disease being serious in people is even better than that.

“So these are, in the history of vaccines in the world, these are really exciting kinds of levels that gives us all a lot of hope. But we really need to see it in practice, and it’s really hard to say while we’re not yet at the point where enough people have been vaccinated, you can say ‘ok, everybody on board will have been vaccinated,’ that sort of thing. But it is something, we think the vaccine is of course the ultimate weapon.”

Bottom line: No definitive announcement as to whether passengers will be required to be vaccinated, but there is definite optimism surrounding the shot. The cruise line did disclose that in a survey to its crew members, the vast majority were open to being vaccinated in order to return to sea.

Trial Sailings & the CDC

Royal Caribbean's Mariner of the Seas in Nassau

Since the CDC replaced the “No Sail Order” with its framework to return to sailing back in October, there has been hope that it would mean cruises would get back to sailing soon. However, months have passed and cruises continue to be postponed.

It now sounds, however, that we could be on the brink of action. One holdup has been technical specifications needed from the CDC for cruise lines to begin simulated voyages and eventually return to cruising.

According to Royal Caribbean President Michael Bayley, that could come soon.

“We’ve been in regular communication with the CDC, both with the maritime units and the executive level and we’re literally expecting the technical specifications any day soon,” Bayley said. “It’s an intergovernmental process between several agencies within the government that are reviewing the technical specifications. They’ve assured us that as soon as all of these things come together, they want to get us back into operation. We’re just literally waiting.”

He went one to express optimism surrounding the potential to get simulated cruises started soon.

“I think our level of optimism is increasing as we see the infection rate decline so dramatically in the U.S. and the number of vaccines increasing. We’re waiting. Hopefully we can get them soon and we can start our trial sailing.

Bayley then re-emphasized his optimism that the CDC will work to get the cruise line back sailing again.

“When we have our discussions, it’s a relatively open process. As they’ve explained to us on many occasions, this is really about what’s happening with the virus. They’ve assured us on several occasions that when these indicators really start to move in a very positive way, they will start working with us to get us back into operation.

“And that’s exactly what we’re seeing now. I must admit every single day I go onto the COVID USA chart on Google and see how the trendline is, and it is just plummeting. My sense is that we’re getting closer and closer to good news.”

“Tracelets” on a Cruise?

While so much talk has rightly been about simulated voyages, vaccines, and return dates, there was another interesting angle that future passengers will be interested in.

The executives talked in detail about the return of Quantum of the Seas in Singapore. There, more than 35,000 passengers have taken cruises successfully. In fact, the company is looking to increase capacity from 50% to 65% on the ship.

Royal Caribbean pointed to a couple of technological innovations as key behind its success, calling them “game changers.”

The first is e-mustering, which was announced several months ago. Here, instead of having passengers huddle together for a muster drill, the process is done via phone or stateroom TV, allowing the cruise line to complete the requirement but not have people in close proximity to others.

The other breakthrough is what they call a “tracelet.” This is a bracelet that guests wear on the ship. It will tell how long a person has been in close proximity to anyone else wearing a tracelet. Royal Caribbean said that the traclet, combined with cameras using facial recognition, are able to better conduct contact tracing in the event that a case is found on the ship.

Most notably, executives noted that in their recent meetings with the CDC, the health agency “specifically asked us to share that technology and what we’ve been doing in Singapore with them, which we’ve subsequently done.”

No Firm Commitments, But Plenty of Optimism

While Royal Caribbean Group made a point not to be committal to things like the tracelet, vaccines, or a return date, comments did provide plenty of insight. At this point the tone and discussion makes it clear that there is plenty of optimism that they will be back sailing soon. In fact, Royal Caribbean’s stock price gained more than 10% so far today.

As COVID cases around the world drop — especially in the United States — and as the number of vaccinated people ramps up, it certainly sounds like the light at the end of the tunnel is getting closer.

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