The recovery has gotten very real for Royal Caribbean International (RCL). The cruise line has fought its way back from being shut down from U.S. ports for more than a year by the Centers for Disease Control and Prevention to cash-flow-positive on its way to being truly profitable.
Royal Caribbean has fought hard to pull off this remarkable turnaround. In July 2021 it returned to sailing from U.S. ports, with early trips carrying very few passengers. Capacity slowly increased until this quarter, when the company has built back to near normal
Chief Executive Jason Liberty talked about the transformation during the cruise line's second-quarter-earnings call.
"Our North American itineraries are now sailing at over 100% load factors, and we are building on this momentum as we expect to reach load factors in the mid-90s in Q3 and then return to triple-digit load factors globally by year-end," he said. "This will set us up very well for 2023."
That's encouraging. And the increase has generally tracked with the loosening or ending of covid-related restrictions.
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Where Do Royal Caribbean's Covid Rules Stand?
Covid protocols have been a moving target since ships started sailing again in July 2021.
At first, the rules were somewhat fluid, but for the bulk of the return, Royal Caribbean had two key ones. First, all passengers ages 12 and older had to be vaccinated, and second, every passenger, regardless of age, had to be tested for covid no more than two days before they sailed.
Those rules are about to change in a big way.
During its second-quarter-earnings call, Royal Caribbean outlined a major change to its testing policy.
"Starting Aug. 8, testing will be required for unvaccinated guests on all voyages and for vaccinated guests only on voyages that are six nights or longer," CEO Liberty said.
Vaccine requirements remain mostly in place, but that policy has changed as well.
RCL President Michael Bayley said on social (first reported by Royal Caribbean Blog, which is unaffiliated with the cruise line):
"Unvaccinated guests will be required to take one test within three days of departure. We will also continue to operate highly vaccinated cruises with a vaccinated population greater than society and which continues to exempt kids 12 and [under. And] we will welcome unvaccinated guests over 12 and guests with a certificate of recovery within 90 days to travel, keeping in mind our ships will typically sail with 80%-plus vaccinated guests onboard," he said.
Now, the cruise line has an answer for when it will fully drop covid testing for vaccinated passengers.
When Will Royal Caribbean Drop Covid Testing?
Liberty did not definitively say when testing will fully be dropped, but he provided color on the issue.
"So we're starting off here by doing the five days or less and we're going to look at that. But I think our expectation here, call it, in the next 45 days or so," he said.
The CEO also noted that in some cases, the cruise line does not control whether it has to test. Liberty said that local requirements will dictate testing rules in some destinations. Currently, however, most ports where the cruise line visits have dropped most, if not all, testing requirements.
"We might, depending on where the ships are going, take some additional protocols, and of course, we're going to continue to follow where covid is in society and take the necessary actions."
Liberty has not definitively spelled out when vaccine requirements will be fully dropped.
