Royal Caribbean loosens restraints on Empress cabins

Empress of the Seas

Inventory for Empress of the Seas will not be released a few months at a time in 2017 as it has been in 2016, Royal Caribbean International president Michael Bayley said on Friday.

The Empress has been sailing short itineraries to the Bahamas and the Caribbean since it returned to Royal Caribbean's fleet in June. It had been at a cost of $50 million with the intent to use it on itineraries to Cuba.

However, Royal Caribbean has yet to gain approval from Cuban authorities to begin those cruises.

"We really were holding it late and hoping for the itinerary change," Bayley said during Royal Caribbean Cruises Ltd.'s third-quarter earnings call.

With cabins available only a few months ahead of time, travel agents have difficulty making group bookings that typically require longer to organize than individual ones.

Empress cruises are currently available through April 2017.

Royal Caribbean was also delayed in launching the Empress into Caribbean service by unexpected construction obstacles after the ship was returned from Royal's Spanish subsidiary Pullmantur.

During the call, Royal Caribbean said projected earnings in the current fourth quarter have been pared by an estimated $13 to $15 million by the delay in getting Empress sailing again and the resulting lost sales momentum.

For the third quarter, RCCL reported net income of $693.3 million on revenue of $2.56 billion. Results are not directly comparable with last year's third quarter because of a huge write-down on Pullmantur.

Executives said the company is in a better booked position for next year than it was last year at this time, with both loads and pricing ahead of pace. North American demand for Europe is returning in the absence of recent terrorism incidents, they said, although Europe will account for 15% of Royal's overall capacity in 2017, down from 20% this year.

The Caribbean will rise to 50% of overall capacity with the addition of Harmony of the Seas, which will not sail in Europe next summer as it did this year, and the shift of Celebrity Equinox from Europe to the Caribbean year-round.

After a pause in bookings following Hurricane Matthew, Royal Caribbean began some promotions to restart consumer demand.