Almost 50 percent of guests of the world’s second largest cruise line have requested cash refunds for Royal Caribbean cruises cancelled as a result of the coronavirus pandemic, the company said in a business update on Friday.
“As of April 30, 2020, approximately 45% of the guests have requested cash refunds,” Royal Caribbean said.
The statement comes just over a week after Royal Caribbean issued an apology to guests for a delay in refunding payments for cruises canceled due to the global coronavirus pandemic.
“Your refund will be honored and it is coming – it’s just taking a little longer than expected and we’re very sorry about that,” the company’s Associate Vice President of Guest Experience, Aurora Yera-Rodriguez, wrote in an email at the time.
Like other cruise companies, Royal Caribbean refunds policy is to allow cash refunds, but encourages customers to take future cruise credits valued at 125% of the initial cruise fare paid in lieu of providing cash refunds.
Royal Caribbean cancellations or cruise credit?
Cruise credit is a more attractive option for the cruise companies whose cash flow and liquidity has been severely hit by the coronavirus pandemic and the subsequent CDC no-sail order that has put the industry into dry dock and shut down its revenues.
The statement showed just how significant holding on to cash is for the company, noting that as of March 31, 2020, it was holding $2.4 billion in customer deposits, a figure that includes approximately $0.8 billion of future cruise credits related to previously announced voyage cancellations through June 11, 2020.
Calling the current period “unprecedented times” Royal Caribbean CEO Richard Fain said: “Travel restrictions and stay-at-home orders are important to slowing the spread of the virus, but they have severely impacted our operations. We are taking decisive actions to prioritize the safety of our guests and crew while protecting our fleet and bolstering liquidity.”
A comprehensive plan to address COVID-19 threat
Fain said the company has been developing a “comprehensive and multi-faceted program to address the unique public health challenges posed by COVID-19.”
This, he said, includes, enhanced screening procedures for passengers, upgraded cleaning and disinfection protocols and plans for social distancing.
“The company will continue to work with the Centers for Disease Control and Prevention, global public health authorities and national and local governments to enhance measures to protect the health, safety and security of guests, crew and the communities visited when we are out of service and once operations resume,” he added.
With regard to bookings, Royal Caribbean said booking volumes for the remainder of 2020 are meaningfully lower than the same time last year with prices that are down low-single digits.
The company said booking trends for 2020 showed increased cancellations, but 2021 and beyond bookings had returned to typical levels within historical ranges and that prices were up mid-single digits compared to 2020.
Meanwhile, as Royal Caribbean seeks to attract customers back to cruising, it is now offering up to $400 is savings for new bookings made between May 8 – May 11, 2020 to Gold, Platinum, Emerald, Diamond, Diamond Plus, and Pinnacle Crown & Anchor Society members, according to the Royal Caribbean blog.