Royal Caribbean Business Update Call Preview: What Matters

Royal Caribbean Group has scheduled a business update call for investors, as well as report 2020 fourth quarter and 2020 full-year earnings, on Monday, Feb. 22.

It's a key call for the investment community, with the company approaching the one-year mark without ships in service from U.S. ports, and only a small percentage of its fleet operating, with the Quantum of the Seas sailing from Singapore while TUI Cruises and Hapag-Lloyd Cruises have seen smaller restarts.

Company executives are expected to provide a 15 to 25-minute presentation and then will open it up to question from financial analysts. 

What to Listen For:

• Restart: When will ships actually start sailing in mass in the United States and Europe? Company executives will be pressed to answer or provide a realistic timeline. Previous remarks about restarting in 2020 did not pan out. 
• CDC: Will company executives provide an update regarding ongoing discussions with the CDC and its Conditional Sailing Order. Since being issued in late October there have been no further public updates nor promised technical regulations. 
• Biden Administration: After the industry had high-profile meetings with Vice President Mike Pence in 2020, as well as a teleconference in October, what has been the relationship with the new U.S. administration so far with President Joe Biden in office?
• Azamara: Company executives will need to comment on the sale of Azamara to a private equity company. Will other sales of ships or brands follow?
• Alaska: How will the Canada cruise ship ban impact the Alaska season and is the idea of a waiver to operate without calling on a foreign port realistic?
• Occupancy: When the ships do restart, what occupancy will they sail at, and what occupancy do they need to sail at to generate positive earnings?
• Deployment: Could 2021 and possibly 2022 lead to a seismic shift in deployment as cruise lines stay even closer to home and embrace short cruises?
• Cash Burn: Royal Caribbean Group opted not to provide an exact cash burn figure in its last earnings release, but offered a range that averaged out to $270 million a month. Investors will be looking for an update.
• Startup Costs: Among Wall Streets, key concerns will be the startup costs per vessel as well as the timeline to get a vessel ready to cruise with guests.
• Lay Up: Will the company elaborate on further cold lay-up scenarios for the vessels that may return to service last?