Like many of their fellow American cruise lines, Royal Caribbean has been slowly trying to create a plan to start safely cruising again. The coronavirus pandemic has forced them (alongside all other U.S. cruise companies) into inactivity, causing them to burn through cash while they wait to resume operations. They have recently given some details about their path back to service, which gives some insight into where the company is right now. They also received a pretty serious loan recently as well. Let’s check out all the details.
Unfortunately for Royal Caribbean, getting back into service depends on a wide variety of factors. The most important among all of those is the No Sail Orders that they must contend with. Both orders from the CDC and the CLIA are preventing any cruise line from sailing from American ports right now. In the meantime, they are starting to work on laying the groundwork that will allow them to sail safely once these orders are lifted. This means that they have been developing new health protocols, but Royal Caribbean is hoping to get approval from a panel of health experts before implementing them. They’re expecting to get this approval back at some point in September. At the same time, Royal has also been reaching out to their most common destinations to agree on the safest way to travel there.
Another key part of getting back into business is accurately gauging demand. Royal Caribbean will only lose more money if they get their entire fleet back up and running when no one wants to take a cruise. However, lack of demand isn’t currently a huge concern for them. They say that repeat customers are eager to book, and Americans in general are really wanting to go on vacations. The current consensus at Royal is that bookings for next summer will likely be very high
Royal Caribbean has a good amount of cash to fall back on during this waiting process, as they are owned by the large corporation Royal Caribbean Group. But Royal Caribbean Group is being mindful about the possibility of running low on funds, so they have begun to reach out for more capital. They secured a loan this August from Morgan Stanley for a total of $700 million, with the possibility of increasing it by $300 million at a later date if need be.
The news of this loan is pretty huge. It will definitely help all of the cruise lines owned by the corporation to weather the pandemic a bit better. We’re looking forward to hearing the results of their plan!