Royal Caribbean gives update on 2021 bookings, virus impact
Yahoo Finance’s Sibile Marcellus joins Akiko Fujita to discuss how Royal Caribbean's decision to suspend all cruises departing from Australia and New Zealand through the end of 2020.
Video Transcript
AKIKO FUJITA: Shares of Royal Caribbean just taking a beating today in the session. It is now off about 12.5%. Seeing the biggest sell-off in three months there after the company announced $1 billion in stock and debt offerings. Sibile Marcellus has been tracking that story for us, and Sibile, walk us through the specifics there.
SIBILE MARCELLUS: That's right, so Royal Caribbean, as you said there, Akiko, we're seeing the stock being hit hard, down about 12%. And we've got some more financial information about the company, about how they've been weathering the coronavirus pandemic. And what we're seeing is that this is information that we actually got from their SEC filing that is tied to a $1 billion stock offering, and we found out is that when it comes to new bookings for next year, for 2021, they are up, but they're not back at pre-pandemic levels. Also as of June 30, the company has about $1.8 billion in customer deposits. They also said that 50% of guests who had pre-booked trips requested cash refunds.
In terms of restarting cruises, so what we're seeing is that the CDC has put a no sail order that goes through October 31, but they may extend it. So of course, that is impacting Royal Caribbean's business, because they don't know if they will be able to sail in 2020, but they are optimistic, but they're not offering any guarantees. Obviously, they're waiting for CDC guidelines there. The company also talked about how they will have challenges rebuilding their workforce once they are allowed to sail and take customers on their cruises because of apprehension from people wanting to work on cruises right now, obviously given the ongoing pandemic. They also talked about in terms of finances how they were able to save cash by reducing capital spending, so that means that they invested less in ships and technology, but that could have an impact on their performance moving forward once they are able to sail again.
AKIKO FUJITA: Yes, certainly still a lot of unknowns, especially in the cruise industry, travel industry as a whole.
