Royal Caribbean Cruises reported losses for the second quarter on Wednesday. One of the reasons for its poor performance is the spread of the delta variant that slowed down bookings. Also, Royal Caribbean had to shoulder the cost of prepping ships.
Royal Caribbean shares dropped by 2.5% at $72.66. Royal Caribbean stock was above $99 in February. This was when passengers were hopeful that the cruise industry would make a comeback.
Market optimism slowed down as the vaccination rate slowed down and delta cases increased in the US. By Wednesday, shares are down by 2.4% since the start of the year. Royal Caribbean currently has a value of $18.43 billion. Royal Caribbean reportedly lost around $330 million for the second quarter.
Bookings Up 50% From First Quarter
Royal Caribbean’s bookings jumped by 50% compared to its first-quarter performance. However, it remains below 2019’s performance.
In a statement released by Royal Caribbean, “While it’s too early to make any definitive conclusions of the impact of Delta variant on bookings, the company has seen a modest impact on closer-in bookings”. The statement added that “2022 continues to remain strong”. The company noted that the spring and summer months for next year are doing well.
Royal Caribbean Reported Losses But Remains Optimistic
According to the Royal Caribbean’s CEO and Chairman Richard Fain, “The return of cruising has been faster than anyone expected”. He added that “Overall, we remain optimistic in our mounting trajectory forward”.
With safety protocols on board, Fain said that “The idea is to limit the spread of COVID19 cases on board”. He added that “We all know it is impossible to eliminate cases on board a ship totally”.
Though Royal Caribbean reported losses for the second quarter, the cruise ship expects more ships to sail again. The cruise operator believes that 65% of its fleet to be back by the end of the third quarter and 80% by the end of 2021. The company expects to break even in about six months considering the cost of bringing back ships.
