CEO Sven Lindblad addressed the company's earnings call from there. He considers French Polynesia, with its natural beauty, the kind of destination travelers will be seeking.
The territory opened to international travelers July 15, requiring a negative COVID PCR test within 72 hours before flying there and another within four days of arrival. This caught the first coronavirus case in more than two COVID-free months on Aug. 3 (aboard Paul Gauguin).
'It could be the first safe place in the world' open to international tourism, Lindblad said.
He sees opportunity to expand the company's couple months of operations a year there to something 'far longer' for one ship.
'Pent-up demand for expeditions will skyrocket'
'I do believe pent-up demand for expedition cruising will skyrocket,' Lindblad said, adding that 'Countries are way happier with smaller ships so we don't have to reinvent ourselves in the COVID-19 era.'
Alaska is out for this year, he said. Major destinations remaining in 2020 — should it become possible to operate — are the Galápagos, where Lindblad has two ships year-round, Antarctica, Baja California and Central America.
The company was off to a strong start to the year with Lindblad segment bookings at the end of February up 25% for the full year 2020 compared to the same point a year ago for 2019, and 86% of its originally projected guest ticket revenues for the year sold. As of July 28, Lindblad segment bookings for 2020 travel fell to 62% below the same point a year ago on canceled voyages and customer cancellations.
$30m in new bookings since March
The company said it has substantial advance bookings for 2021, including 6% more bookings as compared with bookings for 2020 at the same date a year ago and 35% higher bookings as of the same date in 2018 for 2019.
New bookings for future travel continue to come in, including more than $30m — not counting future travel credits from canceled trips — since March 1, and deposits and final payments for future travel are being received.
Most travelers choose credits over refunds
For 2020 voyages that have been canceled or rescheduled, Lindblad is providing future travel credits with added value or full refunds. As of July 28, the majority of customers have opted for future travel credits.
'We continue to hear from our loyal guests how eager they are to resume travelling with us, especially given the smaller size of our ships and the remote geographies we visit, and we look forward to once again providing them the joy of exploration through authentic and immersive experiences,' Lindblad said.
Small ships, coronavirus testing for all
With ship capacities ranging from 48 passengers to 148 passengers, Lindblad said it can provide a highly controlled environment that includes stringent cleaning protocols and coronavirus testing for passengers and crew prior to boarding. On average, the company estimates it will only take a few thousand tests a month to ensure all passengers and crew across its entire fleet have been tested.
Sven Lindblad explained the idea is that travelers would have to present a negative PCR test within four or five days of leaving for their trip and then would be retested — with results in 12 hours — at the gathering point where they would embark charter air to join their ship, thus keeping in a safe 'bubble.'
Most of Lindblad's expeditions take place in remote locations where human interactions are limited. The company is actively investigating additional domestic and international itinerary options such as French Polynesia.
Lindblad's second quarter loss compares to a $1m profit, or 2 cents per share, in Q2 2019. The $40.7m decrease primarily reflects the impact of COVID-19 on operations, a $3.9m loss on foreign currency in the current year versus a $0.5m foreign currency gain a year ago and a $2.4m increase in depreciation and amortization versus the same period a year ago primarily due to the addition of National Geographic Endurance in March.
Tour revenues decreased $76.9m, or 100%, year over year. The decline was driven by a $65m decrease in the Lindblad segment and a $12m decrease at Natural Habitat as a result of rescheduling all expeditions due to COVID-19.
During the quarter Lindblad implemented significant cost reduction measures to further increase its liquidity profile and ended Q2 with $80.9m in unrestricted cash and $21.3m in restricted cash. Export credit agreements were amended, deferring $9m in principal payments and suspending financial covenants.
Following the quarter, the company amended term loan and revolving credit facilities to suspend leverage covenants.
Further opportunities to enhance liquidity are being evaluated, including financing from both the public and private markets through the issuance of equity and/or debt.
Total debt, at June 30, was $412.3m, with no material debt maturities until 2023.
$10m-$15m monthly cash burn
Monthly cash usage is approximately $10m to $15m, excluding customer payments and refunds.
All crew repatriated
On June 26, Lindblad got its last crew members home when its newest ship, National Geographic Endurance, delivered 103 crew from National Geographic Explorer in Denmark and those on Endurance to Kiel, Germany, where they boarded buses to Hamburg and a charter flight home to Manila.