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Omicron Causes Decline In Royal Caribbean Bookings

Omicron Causes Decline In Royal Caribbean Bookings

The omicron variant of Covid-19 has impacted Royal Caribbean Group with a spike in cases onboard, a decline in bookings and service disruptions, the company said. But, cases have been mild and the dip in bookings is smaller than the one it saw as a result of the delta variant this past summer.

In a business update released on Thursday, Royal Caribbean said thus far it has "canceled or significantly modified" 16 of 331 destination calls and that onboard service capabilities have been affected. The company attributed the issues to general disruptions in the travel industry (like air transport), as well as a decreased labor supply, especially during the holiday season.

Royal Caribbean said it "expects these disruptions to continue in the near term and then decline as the world adjusts to the current trends." 

Meanwhile, 1,745 guests have test positive for Covid-19 on Royal Caribbean sailings since cruising restarted in the U.S. in June. In total, 1.1 million guests have sailed with Royal Caribbean, translating to a positivity rate of 0.02%.

"The vast majority of those cases had no symptoms or only mild symptoms," according to Royal Caribbean. Forty-one required hospitalization. Thus far, no omicron cases have required hospitalization or been severe.

"The company is navigating through the ever-evolving information on the omicron variant," Royal Caribbean Group chief medical officer Dr. Calvin Johnson said. "Our case count has spiked, but the level of severity is significantly milder. We will remain nimble and in constant contact with health authorities. For example, even before omicron, we have been giving all our crewmembers booster shots as they became eligible."

Cyber weekend was a strong one for the company, Royal Caribbean said. Increased cancellations and a decline in bookings followed but did not match declines seen when the delta variant spiked over the summer.

In the first half of 2022, load factors expectedly remain below historical levels. But, the company said, sailings in the second half of 2022 "continue to be booked within historical ranges, at higher prices and without future cruise credits, with strong demand from the critical U.S. market."

Chairman and CEO Richard Fain said Royal Caribbean expects omicron to continue to negatively impact the company in the short term, but the company is "optimistic they will lead us to a more pervasive but less severe health environment."

He said 2022 will likely be a "strong transitional year," leading to "a very strong 2023."

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