11 Aug 2020
Posted in Travel & Tourism
Royal Caribbean’s enormous loss highlights cruise industry woes
Following the release of Royal Caribbean Group’s Q2 2020 results;
Ben Cordwell, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers his view on the company’s losses:
“A second quarter net loss of $1.6bn comes on top of a net loss of $1.4bn in the first quarter of 2020. These kind of losses are clearly not sustainable and highlight the enormous financial pressure that COVID-19 has put all cruise companies under.
“Fortunately for Royal Caribbean, the company has large cash reserves to fall back on, with $4.1bn still available in the form of cash and cash equivalents. This cash will likely see Royal Caribbean through the pandemic, however, the future may look bleaker for smaller cruise operators with lower cash reserves.
“Despite the ongoing difficulties, Royal Caribbean has indicated bookings have been positive in 2021, with approximately 60% of bookings being new reservations. However, a recent outbreak on board a cruise ship in the Arctic could have enormous repercussions for the cruise industry further down the line. If these kind of incidents become high-profile, it could be devastating for the industry.”