Indicating strength in future cruise demand, Royal Caribbean
Cruises Ltd. said that most of its future cruise bookings are new and that 2021
pricing is actually up slightly.
During RCCL’s first-quarter earnings call, the cruise company
said that while it is still very early in the booking cycle for 2021, load
factors are currently within historical range of the last three to five years
and that prices are up in the mid-single digits compared with 2020 pricing.
CFO Jason Liberty said that pricing is holding in part
because RCCL and other cruise companies are making price integrity a priority.
“[Cruise lines] are being much more measured in terms of
taking pricing action, you see more packaging, more promotional activity, but
we are seeing pricing stay relatively stable,” he said.
RCCL said most future bookings are new and not redemptions
of future cruise credits (FCCs).
“Of the FCCs that we have out there, about 20% have been
applied but it’s a small percentage of the forward booking period,” Liberty
RCCL said that 55% of guests are opting for FCCs, which have
a value of 125% of the cruise cost, over cash refunds on sailings that have
been canceled this year. RCCL said guests across income demographics are taking
FCCs equally but that loyalty program members, families and baby boomers are
likely to opt for an FCC while millennials are more likely to want cash back.
Of the guests taking FCCs so far, loyalty program members are redeeming them at
a much faster pace than nonmembers.
Liberty said there is strong demand for 2021 but that “guests
require more flexibility than ever,” which the line is offering with programs
that allow cancellation up to 48 hours before cruising. RCCL said it also
continues to take future bookings for 2022.