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Royal Caribbean posts $1bn loss but hopes for US summer cruise restart

Royal Caribbean racked up another quarterly loss in excess of $1bn but CEO Richard Fain said recent talks with the CDC give the company hope it could operate an Alaska cruise season this summer.

'We have had very constructive dialogues with the Centers for Disease Control and Prevention in recent weeks about resuming cruising in the US in a safe and healthy manner,' Fain said. 'Last night, the CDC notified us of some clarifications and amplifications of their conditional sail order which addressed uncertainties and concerns we had raised.

'They have dealt with many of these items in a constructive manner that takes into account recent advances in vaccines and medical science. Although this is only part of a very complex process,' Fain continued, 'it encourages us that we now see a pathway to a healthy and achievable return to service, hopefully in time for an Alaskan season.'

But no bets on Alaska

However, during Thursday's earnings call, Fain wouldn't put any odds on Alaska, given the additional challenge of Canada's cruise ban. He indicated discussions continue with Canada and US officials about a possible waiver to the Passenger Vessel Services Act. 

More than 125,000 cruisers carried, 21 COVID cases

Royal Caribbean's sailings in Europe and Asia have so far tallied just 21 COVID-19 cases among more than 125,000 passengers, equating to a positivity rate of 0.01%. Fain said this shows the success of mitigation protocols even before vaccination. 

Q1 results

Royal Caribbean posted a $1.1bn adjusted net loss, or $4.44 per share, compared to a loss of $310.4m, or $1.48 per share a year ago. US GAAP net loss was $1.1bn, or $4.66 per share, down from the $1.4bn loss, $6.91 per share, a year ago.

Revenues were $42m. 

Bookings update

Booking activity for the second half of 2021 is aligned with the company's anticipated resumption of cruising. Pricing on these bookings is higher than in 2019, both including and excluding the dilutive impact of future cruise credits.

Cumulative advance bookings for the first half of 2022 are 'within historical ranges and at higher prices when compared to 2019.' This was achieved with minimal sales and marketing spend which Royal Caribbean believes highlights strong long-term demand for cruising.

Since the last business update, approximately 75% of bookings made for 2021 are new and 25% are due to the redemption of FCCs and the 'Lift & Shift' program. The company continues to provide customers on suspended sailings with the option to request a refund, to receive an FCC or to shift their booking to the following year.

At March 31, Royal Caribbean had approximately $1.8bn in customer deposits, in line with its Dec. 31 balance. Approximately 45% of the customer deposit balance is related to FCCs.

Since the suspension of operations on March 13 last year, approximately 50% of travelers booked on canceled sailings have requested cash refunds.

Monthly average cash burn $300m

First quarter average monthly cash burn was approximately $300m, slightly higher than the previously announced range driven mainly by fleetwide restart expenses and timing.

Royal Caribbean couldn't estimate a monthly  average cash burn rate related to ships returning to service, given the situation's fluidity, but expects the cash burn rate for ships that are in lay-up to remain consistent with previous expectations.

An additional 11 ships are scheduled to return to service this summer, CFO Jason Liberty noted. 


As of March 31, the company had approximately $5.8bn of liquidity, including $5.1bn in cash and cash equivalents and a $0.7bn commitment for a 364-day facility.

Scheduled debt maturities for the remainder of 2021 and 2022 $0.2bn and $2.2bn, respectively. Net interest expense for Q2 is expected to be approximately $270m.

Capital expenditures and capacity updates

Based on current ship orders and delivery schedules, the projected capital expenditures for the remainder of 2021 are $1.1bn. During the first quarter, the company  introduced Odyssey of the Seas to the Royal Caribbean International fleet and now expects the delivery of Silver Dawn to Silversea during the fourth quarter.

For 2022, two ship deliveries are scheduled: Wonder of the Seas and Celebrity Beyond.

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