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Entire Royal Caribbean Group fleet resumes operations

The Royal Caribbean Group has returned to positive cash flow after its full fleet resumed operations in June.

Load factors for the second quarter of 2022 were 82%, with June sailings reaching “almost 90%”, which remain below historical levels.

The group reported a net loss of $500 million for the quarter on Thursday (July 28).

“Robust and accelerating” consumer demand means the company predicts load factors will average around 95% in the third quarter and increase to “triple digits by year-end”.

The firm operates Royal Caribbean International, Celebrity Cruises and Silversea Cruises and is a 50% owner of a joint venture that operates Tui Cruises and Hapag-Lloyd Cruises.

Royal said the second half of 2022 is booked below historical levels but at higher prices than 2019, with Future Cruise Credits (FCCs) factored in.

In the second quarter, bookings volumes for 2022 sailings averaged 30% above 2019 booking volumes for voyages in the corresponding period.

Royal said: “Guests are still booking their cruises closer-in compared to prior years, contributing to the better-than-expected load factors in the second quarter.

“In addition, cancellation activity has now returned to pre-Covid levels. As expected, load factors for sailings in the second half of 2022 remain below historical levels.”

It added the pandemic and the Russia-Ukraine war had set back the business’s recovery but said demand for the “critical” Europe season had been strong over the past three months.

European itineraries account for “about a third” of overall capacity, the company added.

“We reached two important milestones in our recovery this quarter – returning our entire global fleet back to operations and delivering positive operating cash flow,” said Jason Liberty, president and chief executive officer, Royal Caribbean Group.

“Consumers’ propensity to travel and cruise remains strong. We continue to see a robust and accelerating demand environment for cruising and on-board spend.

“Cruising remains a very attractive value proposition for vacationers, and today we have an opportunity to further close the value gap to other land-based vacation offerings.

“Our liquidity position remains strong, and we are generating positive operating cash flow. With the fleet back in service, we have the full strength of our platform as we continue to execute on our recovery and build on our capabilities for long-term success.”

The group’s liquidity position, as of June 30, 2022, was $3.3 billion. This month, the group bought ultra-luxury expedition ship Crystal Endeavor for $275 million. The transaction is fully financed through a 15-year unsecured term loan.

Chief financial officer Naftali Holtz said: “Our liquidity position remains strong as we execute our return to service and our operations generate positive cash flow again.”

Looking forward, it expects to operate 11.6 million APCDs, generating between $2.9 billion and $3 billion in revenue, in the third quarter and 11.5 APCDs in the final three months of the year.

At the end of the first quarter the company expected to operate 10.3 million available passenger cruise days (APCDs) during the upcoming three months.


More: New Royal Caribbean Group chief eyes new-builds and weighs acquisitions

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