Johanna Jainchill
The names delta and omicron won't soon be forgotten, especially for a travel industry that had hopes for both a summer and holiday travel surge thwarted by the variants' arrivals.
For the cruise industry, there were major differences in terms of impact between the two. The biggest difference was that cruises had to be canceled with omicron. But the latter variant's impact also appears to shorter lived, according to Royal Caribbean Group executives.
"I think the big difference between delta and omicron was really the operational impact," CEO Jason Liberty said during the cruise company's fourth-quarter earnings call last week. He added that the differences in terms of consumer reaction were that with omicron, the impact was more on closer-in sailings, whereas delta's impact was spread out over a couple of quarters.
Royal is hopeful that given how quickly omicron appears to have peaked, the impact will be shorter.
A short-lived impact from omicron?
And if the company's experience in U.K. is any indicator, that will be the case.
"When a market or a country or a region goes into the variant as it starts to spike, bookings head in the opposite direction," said Royal Caribbean International CEO Michael Bayley. "And as soon as we get over the peak, which happened in the U.K. ahead of the U.S., then all of a sudden, you see activity returning. As the infection rate continues to drop, you see the booking rate continue to accelerate upwards.
"That's really what we've seen out of the U.K. market. The kind of the line of ascension is very similar to what we saw in delta and what we're seeing now with omicron in the U.S. market. The more the positivity rate drops, the more the bookings increase. It's kind of becoming quite typical."
Liberty added that the majority of cancellations attributed to omicron were from cruisers (or someone in their group) who tested positive for Covid before embarking, as opposed to having concerns about traveling.
Bayley and Liberty both observed how quickly omicron spread but also how comparatively mild it was among Royal Caribbean Group's crew, which they attributed to crew being fully vaccinated and in many cases getting booster shots.
"For all of our crew positivity, 99% of the crew positivity was asymptomatic and the 1% was extremely mild symptoms," Bayley said. "I mean, it really was remarkable in many ways, but the impact on the crew was effectively zero, except it did take them out of operation for the period of their quarantine."
What about new cruisers?
The constant swing of good news, bad news with Covid, especially when it comes to variants, did have an outsize impact on the new-to-cruise market.
Coming out of the "delta dip" last summer, Bayley said that "loyalty certainly led the way" and that bookings from new cruisers "lagged, I would say, four to six weeks. ... Loyalty was, at the beginning, skewed heavily, and then new-to-cruise started to jump back in, and then it started to even out back to normal levels."
But, Bayley said, Royal's new ships and short-cruise products remain "very appealing" to first-timers as well as its private island experience, Perfect Day at CocoCay, which he said was generating significant demand with new cruisers.
"So our view is that new-to-cruise is lagging, but it's coming back, and we feel that's exactly what's going to happen now as we come out of this latest variant," Bayley said.