Forget Covid: Royal Caribbean Has Moved Past the Pandemic

The cruise line has completed a big part of its “Royal Comeback,” at least onboard its ships.

When Freedom of the Seas sailed out of Miami on July 3, 2021, it was a celebration. That sailing marked Royal Caribbean International’s  (RCL) – Get Royal Caribbean Group Report return to sailing from United States ports with its namesake brand.

It was a festive occasion marked by a number of the company’s ships gathering around the cruise line’s CocoCay private island. Most of those ships only had crew members onboard, but for the 800 or so people on Freedom of the Seas, it was a return to being able to take a cruise vacation.

Things onboard, however, were not normal. Masks were required in many venues and while vaccinations were not (that would come in a few weeks) social distancing measures were in place and the limited passenger count made it very clear this was not a full-on return to normal.

Over the next 15 months, the Centers for Disease Control and Prevention slowly rolled back pandemic-related rules before deciding to let the cruise lines make those decisions themselves. Now, what the company has called its “Royal Comeback” has truly been completed (at least from a passenger point of view.

Image source: Daniel Kline/TheStreet

What It’s Like on a Royal Caribbean Ship Right Now

On the early sailings as part of its comeback, Royal Caribbean’s ships felt eerily empty. It’s fun to have short lines and pools without crowds, but people create the vibe on a cruise and the lack of them was noticeable. Now, Royal Caribbean has returned to full capacity on its sailings and while prices have generally been low, the crowds have come back.

I have taken a number of cruises with Royal Caribbean since the return to sailing. My current one, on Allure of the Seas, is the first one to feel like covid no longer plays a factor. That started with embarkation where technically vaccinated people must show proof and unvaccinated passengers must show a negative test. I had my vaccination card out, but it was barely glanced at, and people I met onboard said that their negative tests were generally not scrutinized.

Once onboard, pretty much every normal activity except for the adult scavenger hunt, The Quest, has returned. There have been mass gatherings in Promenade (a central mall-like area indoors on level 5) and few people are wearing masks.

The biggest change — and this just happened — is that crew members no longer have to wear masks. Some of them still are (at a higher rate than the passengers) but the visual reminder that the world is not normal has largely gone away.

Really, aside from there being more hand sanitizer stations than before, Royal Caribbean has returned to pre-pandemic operations.

Royal Caribbean Has Good News and Bad News

Both Royal Caribbean and Carnival Cruise Line (CCL) – Get Carnival Corporation Report have returned their ships to sea and brought back near-full capacity (and in some cases full). That’s an achievement as rivals MSC and Virgin Voyages have struggled with filling their ships, but prices on many trips remain low.

Royal Caribbean’s (and Carnival’s) comebacks have been driven by lower cruise fares and higher onboard spending.

“During the second quarter, we achieved earlier than we had expected, positive EBITDA and operating cash flow,” CEO Jason Liberty said during the cruise line’s second-quarter earnings call. “…This outperformance in Q2 versus our expectations was driven by continued strength in our onboard revenue and accelerating load factors, which hit nearly 90% in June and delivered 82% for the quarter.”

Liberty has seen some trends that are positive for the cruise line.

“The 100,000-plus guests that we have on our ship every day, including the 125,000 guests that are currently on our ships today, have been spending at least 30% more on board our ships across all categories when compared to 2019. These spending trends have been consistent across our customer base even as we are approaching full load factors,” he added.

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