Royal Caribbean Group provided an update on the status of its business and the impact of the Omicron variant.
Knowledge about COVID-19 and how to deal with it have been in a constant state of flux for the last two years. Omicron has significantly altered the COVID-19 landscape for everyone, and the Royal Caribbean Group is no exception.
As widely reported, the Omicron variant is significantly more infectious than its predecessors and has already become the dominant form of COVID-19 in the U.S. and elsewhere. Fortunately, Omicron also appears to cause significantly less severe symptoms than earlier variants, especially for people who are vaccinated. Cruising remains one of the few places one can vacation knowing that almost everyone you meet is fully vaccinated.
The recent experience on Royal Caribbean Group ships is consistent with these observations. The numbers indicate an increase in people testing positive without a corresponding increase in people becoming ill. Since cruising restarted in the U.S. in June 2021, the Royal Caribbean Group has carried 1.1 million guests with 1,745 people testing positive – a positivity rate of 0.162%. Furthermore, the vast majority of those cases had no symptoms or only mild symptoms, with only 41 people needing hospitalization. None of the Omicron cases have been severe or needed to be taken to a hospital. These figures are a result of almost everyone onboard having been vaccinated and having a negative test before boarding.
“Omicron is having a big short-term impact on everyone, but many observers see this as a major step towards COVID-19 becoming endemic rather than epidemic,” said Richard Fain, Chairman & CEO. “We don’t like to see even one case, but our experience is a fraction of the comparable statistics of virtually any other comparable location or industry. Few businesses are subject to such intense scrutiny, regulation, and disclosure requirements by so many authorities, and we welcome that scrutiny because of our commitment to safety. We intend to maintain our goal of delivering the safest vacation on land or sea and will constantly adjust our procedures to accomplish this even in the face of Omicron’s amazing transmissibility.”
Royal Caribbean Group’s Chief Medical Officer Dr. Calvin Johnson emphasizes: “The company is navigating through the ever-evolving information on the Omicron variant. Our case count has spiked, but the level of severity is significantly milder. We will remain nimble and in constant contact with health authorities. For example, even before Omicron, we have been giving all our crewmembers booster shots as they became eligible.”
Following a very strong Cyber weekend, the company experienced a decline in bookings and increased cancellations for near-term sailings but to a lesser degree than that experienced with the Delta variant. Load factors for sailings in the first half of 2022 remain below historical levels, as expected. However, sailings for the second half of 2022 continue to be booked within historical ranges, at higher prices with and without Future Cruise Credits (FCCs), with strong demand from the critical U.S. market.
The travel industry is experiencing significant disruptions by air transport and other service providers due to the spread of Omicron. Such disruptions are particularly impactful during the holiday season as the need increases and the labor supply is impacted by the current spike in cases. Similar issues are impacting the company’s onboard service capabilities. In addition, the company is experiencing service disruptions at selected destinations and to date has cancelled or significantly modified 16 destination calls out of 331. The company expects these disruptions to continue in the near term and then decline as the world adjusts to the current trends.
Fain concluded, “We are constantly learning and adjusting as Omicron appears to be ushering in a new phase in the fight against COVID-19. We expect these factors to have a negative impact in the short term but are optimistic they will lead us to a more pervasive but less severe health environment. Taken together, this should enable us to produce a strong transitional year in 2022 and a very strong 2023.”
