The cruises were on the high-yielding Spectrum of the Seas, the company’s only ship homeported in China for the current winter season. They included Chinese New Year sailings.
Should the travel restrictions in China continue until the end of February, Royal Caribbean estimates this would further impact its results by an additional 10 cents per share.
Variables and uncertainties
‘There are still too many variables and uncertainties regarding this outbreak to calculate the overall impact on the business,’ the company said in a release. ‘For example, we expect an erosion of consumer confidence in China could have an additional impact on load factor and rate in the region until the market normalizes. If these travel restrictions continue for an extended period of time, they could have a material impact on the overall financial performance of the company.’
'Notably, the company did not mention any impact on demand outside of China,' analyst Sharon Zackfia at William Blair said in a note to investors.
Two additional ships are scheduled to join Royal Caribbean’s China lineup in May and July. For the full year, China represents about 6% of RCL’s capacity.
Fourth quarter earnings
Royal Caribbean plans to announce fourth quarter 2019 financial results on Feb. 4. A conference call with analysts is scheduled for 10 a.m. EST that day. The call may be heard at www.rclinvestor.com.
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