Royal Caribbean Group - Booking Situation and Finances

Royal Caribbean Group - Booking Situation and Finances


October 14, 2020 -The Royal Caribbean Group commented on the situation of the group in the last few days. In particular, it was about the booking situation, the budget and the financial situation.

Royal Caribbean, the second largest cruise company in the world after Carnival, is responding to the corona pandemic with various savings and capital measures.

Bookings
Bookings for 2021 have increased in the last two months. However, they are still below the level of the pre-Corona period. The company notes that the price development for the following year is not satisfactory because of the Future Cruise Credits (FCCs) issued. After all, the financially ineffective FCCs and postponements of bookings (lift & shift) to another period prevented the reimbursement of travel fees.

mariner of the seas 501 istanbul

Mariner of the Seas in Istanbul


Financial condition
In the third quarter of 2020, Royal Caribbean “burned” US $ 250 to 290 million a month. Financial influences are not included in these calculations. The group's companies have taken preventive measures in view of COVID-19 in order to maintain liquidity. The measures include cost cuts, no capital outflows and the acquisition of additional financial resources.

Cost reduction measures

  • The ship-related costs have been reduced (crew salaries, food, fuel, insurance and port fees).
  • A number of ships in the fleet will be put into a “cold layup”, which will significantly reduce ship costs. The negative consequence of this maneuver is that restarting the ships requires considerably more time than is necessary for a "warm layup".
  • Marketing and sales costs were canceled or significantly reduced for the remainder of 2020.
  • The number of employees on land was reduced by 23 percent through job cuts or short-time work.
  • Other cost-effective measures: No business trips and no hiring.

Corporate actions
As of September 30, 2020, the Royal Caribbean Group's cash and cash equivalents are $ 3,7 billion. 3,0 billion of the total are to be regarded as cash positions or cash equivalents. The remaining $ 700 million is a 364 day loan. Since the beginning of the corona-related crisis in February 2020, the group of companies has defined an estimated US $ 4,4 billion in liquidity outflows that can either be saved or deferred in 2020 and 2021.

To further improve liquidity, Royal Caribbean Holding is issuing shares valued at US $ 500 million. In addition, the issuance of a convertible bond in the amount of US $ 2023 million due in 500 is planned. Both funds can be increased by $ 75 million each as needed.