Royal Caribbean’s Earnings Call.
July 29, 2009
- Richard Fain referred to h1n1 as “that damn flu.”
- Europe has been a pleasant surprise in terms of demand
- loss of $0.16 per share
- Costs are down and fuel costs are down
- Pricing and discounting are lower (meaning better for the cruiser!)
- RCI management has a pessimistic look for 2010
- Spanish market uncertainty has hurt RCI
- $0.05 per share lost due to h1n1 (CCL lost $0.03))
- Adam Goldstein onboard revenue down but that was predictable.
- Alaska net yield the worst its been. Bookings are the same but its just not profitable.
- Oasis is 90% complete
- RCCL is using local HQ’s in panama and their new markets to help increase demand from those markets.
- Dan Hanrahan (Celebrity) notes that more cruisers are booking closer to sailing dates. He did not want to comment on Europe or other destinations.
- More passengers, they predict, will be from Europe.
- RCI is increasing capacity from UK.
- Dan Hanrahan is pleasant with the performance of the Europe market.
- Regarding h1ni. Richard Fain states they have a “robust on board program” to control any happenings of it. “It came; people panic at first and then they came to accept it.” People are expecting to see a surge in it. They monitor passengers that come on. They are in contact with local authorities to monitor. They, along with other lines and a close coordination on how to deal with put breaks.
- RCI sees yield improvement in Q1. More capacity on new vessels.
- Revenue management system is improving. Richard Fain: “I don’t know of another company that can predict their revenue as accurately as we do.”
- On newbuilds. They don’t see the industry as market share, so it doesn’t matter what carnival does or doesn’t do. Fain:”I believe that RCI is a bigger brand than Carnival.”
- Shorter Caribbean is down because it has the least exposure.
- End of the year they plan to make an announcement on Allure of the Seas financing.
- RCI wont switch over to low-sulfur fuels
- Regarding a worse flu season this fall: the previous flu scare has put them in a better position to deal with future recurrences.
- Last question
- RCI prepares internally under worst case scenarios. So they see a bright future. They have alluded to big years in ’10 ’11.
- Interesting note: They are calling in from a suite on the Celebrity Equinox from Southampton.
One last note. They mentioned that their will be a capacity decrease in the North American market for 2010. Richard Fain believes that this along with still steady demand, will put RCI on the right track.
Thanks to everyone for joining me for our first CruiseInd live blog.