Royal Caribbean Leads Cruise Lines Higher With Bookings Gain
(Bloomberg) -- Royal Caribbean Cruises Ltd. rose to its highest in nearly a year in New York after the company said bookings continue to improve, lifting the shares of competitors as well.
Since the beginning of the year, reservations are running 30% higher than in November and December, Chief Financial Officer Jason Liberty said Monday on a quarterly conference call with investors.
Shares of Royal Caribbean, the second-largest cruise operator, rose as much as 13% to $88.75, their highest since Feb. 26, 2020. Carnival Corp. and Norwegian Cruise Line Holdings Ltd. also jumped.
The vaccinations of millions of Americans against coronavirus has been a significant help, Liberty said in a phone interview, along with the accompanying decline in Covid-19 cases across the country.
“As the vaccines have begun to roll out, you’re really seeing this uptick in demand,” he said.
The industry shut down nearly a year ago in an abrupt halt following a series of dramatic and deadly outbreaks of Covid-19 at sea. Now, cruise operators are plotting their return to service, and executives say they’re seeing pent-up demand among consumers who have been forced to shun travel for the past year.
Royal Caribbean didn’t provide a clear timeline for its return to service. The Centers for Disease Control & Prevention remains in the position of gatekeeper for the industry’s return.
Talks With CDC
But Liberty said the company speaks at least every other week with senior officials from the CDC, and that they appear open to working on a resumption of travel, though he didn’t give new specifics.
The company has yet to decide whether it will require vaccinations for future passengers. The Bloomberg Vaccine Tracker shows that 13.1% of Americans have received at least one dose of a vaccine.
Cruise stocks have posted a sharp recovery from their pandemic lows, with Royal Caribbean almost quadrupling from levels in March 2020.
That’s remarkable for a company that has gone without customers for most of the past year and had to load up on high-interest-rate debt to survive. It suggests investors have confidence that Royal Caribbean can emerge from the pandemic with the potential for profitable growth.
“Booking commentary remains healthy in the out years as customer demand continues to prove somewhat resilient,” Steven Wieczynski, an analyst with Stifel Nicolaus & Co., said in a note.
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