Although, as expected, this cruise line lost money last quarter, it still beat analysts’ estimates on the top and bottom line.
Royal Caribbean Group (RCL)
From The Prudent Speculator
Shares of Royal Caribbean were crushed in the midst of pandemic-related shutdowns last year, but the rebound has been dramatic (shares hit a low of $22 in March 2020, down from the high of $135 in January 2020) as cruisers are a hearty bunch with bookings for future sailings surprisingly robust.
CFO Jason Liberty just stated, “Overall, the booking activity for the second half of 2021 is in line with our anticipated resumption of cruising. And pricing on these bookings is higher than 2019, both including and excluding the dilutive impact of future cruise credits.” Mr. Liberty said the vaccine rollout has been “really transformational,” even though there is a long way to go in many parts of the world.
RCL disclosed that 80% of those with bookings told the company they are vaccinated or would be at the time of sailing, while crew members achieved a “mid-90s” percent vaccination rate for the flu shot (despite not being mandatory), leading management to expect similar rates of acceptance.
Although there remain questions about regulatory approvals in many locales for cruises to resume, we like that RCL has sufficient liquidity ($5.8 billion) to keep it afloat through 2023, even as we expect most ships to be sailing by 2022.
John Buckingham, The Prudent Speculator, theprudentspeculator.com, 877-817-4394, May 4, 2021