RCL - Earnings call transcript Q1 2020 | Royal Caribbean Cruises Ltd.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Sia and I will be your conference operator today. At this time, I would like to welcome everyone to Royal Caribbean’s Group Business Update and First Quarter 2020 Earnings Call. [Operator Instructions]

I would now like to introduce Chief Financial Officer, Mr. Liberty. Jason Mr. is floor yours. the Liberty,

Jason Liberty

you, morning, for quarter and you Good us Thank earnings today first everyone, joining and for thank update operator. our call. business

Chairman offices me and President President Royal Carola Richard Joining of their and of Executive home International; our from Fain, Michael virtually CEO our Mengolini, and Caribbean Bayley, Investor Chief Officer; are Vice Relations.

on will few slides, been posted During a which www.rclinvestor.com. to this our be call, website referring we Investors have

you to I which started, we refer forward-looking first like Before notice would statements, our to is slide. get about our on

During this in guarantee described that statements and call, future we forward-looking. not are comments Examples our will SEC risks be do involve uncertainties. are making filings performance and do and disclosures. These other

do our on be undertake information reconciliation and adjusted we currency otherwise, all not the of measures, metrics non-GAAP Also, change. defined non-GAAP we filings can Unless basis. circumstances be are historical update in on found discussing constant will certain a a our are state all which website. financial to note we Please as as adjusted that items

Richard then I first then taken the with results. will strategic update providing by our quarter then a we an acquisitions our booking provide will I will an of and liquidity update to-date. of follow environment the of I begin have call provide recap overview the business. a on will

will call We Richard? your the then open up questions. for

Richard Fain

hard as our we that need remembering well everyone. protect and hope These is morning everybody good of troubled and and communities. working who I care are responders first ourselves, to are all this Jason and so others on healthy. to Thanks the safe take times, as call

we our quickly we we brands are unprecedented clear, guests will prepare But, will our the our to industry travel and our safety our having new work this new and we evolving Company's normal. and to to Company and Obviously, environment. the protect crew, partners, challenges, and we adapt for will a will protect enhance our priorities undergoing and define are proactively of liquidity, are and

operations, to In to repatriate suspended guests we the two our months been crew since and safely members working their we've homes. tirelessly

possible. from Our what countries to different to as XX,XXX the around But with way carry extent undertaken somebody to simple soon do crews to We've to their men and home task be bodies home travel currently members our get and have women into complexity are a ships families back travel way most to possible. than and even ships gone it a expensive of vessels the as widely do transport But, has of repatriate crew to governing reliable their teams process protocols who's safety nine to our clock way. world a than countries. convey and It's our therefore, This making the quickly with we've to this using complex the as the of crew restrictions. to come as it's arrangements. it. these should It's hard And one. working more around used a XXX more turned, simple really monumental multitude as the

future to end, where We've guests of to Cruise XX up on peace look their to the and cancel they sailing the with hours for forward also provide implemented cruises the a as To credit travel. fare cruise. Confidence program, to some to prior their with actions cruise mind receive guests this resuming have and flexibility have full we flexibility implemented

our that We're for they received have to our both, as the with time delighted program and this well Shift more say enhanced these Shift and Lift program recently our our guests even Lift or option, been gives benefit ahead. programs We which very comfort regarding few focus on a In more a on the steps details first quarter, with during that environment, results we've cost guests and profile. and address taking the liquidity current been our Jason to the reductions moments, proactive and provide liquidity. will

First little changed, only steps of quickly this to this then taking amazing how disease I we're think, about It's though, our to reflect evolved. awful address our that It's to has on we future. about like how future the that When think two suspended remarkable. it's disease, back world useful it's and to I'd and to since months the been operations. understood how understanding we talk has quickly

week of it's week, been the a new Over information Things been and assimilate. hard period, that unthinkable The right has pace we astounding. became has of flow to information been were understanding one the later. barely told fast, were so

signs. beginning Fortunately, beginning to loosen. to of It's is our level world [ph] to seems We're at understand of dos and or structures and to the governments least that are the very don’ts, are these auspicious around be. the days, all stabilize tight but understanding early beginning and still

is beginning. immediate would is opening also a cruising of will And many including the factors, on between contact know like know it is ultimately therapeutics, different and world of on you all to gradually tracing, availability The just widely dependent up. when And like too. most varies highly That process question vaccines. testing, It's geographical areas. the embarking it that to Obviously, program we'd clearly restart.

are and our this the around intend While that To make the all of we are recovery, on timing emphasis entail. of difficult aspects with it, it for to Return have Service to end, changes do certainty we to or and focused will it's very prepared safe safety, special we sure strategy any health. shape security for on

elevate that a level. to expects public new the health protocols our that we safety and will know We

meet prepared make this use trying wisely. we exceed to those to and time sure are expectations. that We We're

ways up new on and raise ensure our the our to bar have and game innovation in We we passion, to are to been field our ingenuity, working this our heights. use that to

calling program, Service program. healthy We aspirational our are the to Return

procedures any and reports us the procedures enhanced blue board, for experts focus approach. on we and program ribbon The boarding, We team addressing of on right recognize processes and focuses, with will a exceptions. an extremely is we upgraded four to screening dealing on advise visit, have of area, that assembled the to have this main special complex prior destinations

to there. Our us that new levels. goal is Service help believe to get to And program we will Healthy the our raise entirely standards Return

have individual We change. time, determination have things we have talking the will is the of and It about start we the to how tempting expertise. all the now components

our defining enhancements, expert our all we're guidance mantra However, will those And of we're in advisors. still keeping still continue improvement. taking process this continuous from and with

other won't one we ready start were protocols we better the today is We're so we in will tomorrow. thing yet determination better health not that change until our to do we than that and hygiene place. are solidly yesterday, operations prepared will be all But, prepared the with and fully

and Besides transparent of many addressing actions in of aspects our confidence by related extensively. the things to all COVID-XX, scientific the being restore also we to communicating need

it it We exaggeration around clock. rush work, this to the an will not we're is working but not on say that

I'd is and as culture discuss The strong of an relationships is longer The this advantage to base, other crisis over. partners, and our should travel great innovative reputation strategy. term our customer with all agile agent our our briefly serve area like our when brands, the

not Company's will to best Just a human a the experiences with for to travel suddenly the on We enjoy desire demand to focus our to few in were basic continued That that weeks as fueled vanished. year our huge and history, explore seeking by we has opposed know set out persist ago, products. things. the

responsibility resumes. the travel best to be Our is in position when possible

of quite think analogy to draw history; would X/XX, an really of is especially said people and aftermath the people in I event, travel again, to I’d lots tourism apropos. never horrible which travel that airplanes. recall that like I on were that

were exact situation had hand, and no These refer say never to happened. heard people on as X/XX traveling were though the people traveling soon argued On same impact X/XX that the I and other more that traffic. people after ultimately they

is simply view comments wrong. as X/XX. that My traveling stopped demonstrably that It untrue is both result of people a are

fact, took of travel period off. adjustment, after a In

Sorry pun. for the

status of ante. reverted On true after quo it the period hand, isn't other the travel to equally adjustment, the that

but basis. Travel on and by believe in became different it travel that but it travel to that It's from simply a reverting didn't by revert everything same In is travel that Travel thing hard been, adjusted, all it took what place do going tourism dynamic and to that post-X/XX to different rather travel remember to I the in was, world. grew have What a we had to we pre-X/XX. that from normal, what all changed. world to will activities, adjusting happened personally world grow, that post-COVID-XX place. new world previously. the took quite really the fact, in very a not will was and was where adjusted happen

but of come manage meeting flow focused to their our strong in actively mimicking coming will talk we brands Jason we not steps and it We're product on guests innovating a and about to by what do to as that proactive minute. our as position months to the to going world resilient secure used travel costs, over our is and been the strong. storm. to is industry cash the to resume liquidity demands exciting to so weather emerge also reduce the Our in We've taking And a beyond. do positioning is. back by We'll the in

Jason? the microphone turn With that, I'll Jason. back to

Jason Liberty

you, Thank Richard.

dedication thank and across the efforts to So, I’d our their tireless like during these first times. for whole enterprise unprecedented teams

months profile, updates our through past operating preserving additional date, expenditures, focused releases two reducing efforts intensely we our investors press our our on enhancing call, pausing several our operations, efforts maturity Since improving we up deferring To which and and focused also securing capital liquidity our keep or debt on stakeholders cash the our reducing detail have and earnings X-Ks. provided to During capital. since have expenses, we profile. and last of have our

reduced the significantly as of expenses We transition our have layups. levels running various into ships

G&A period. and significantly reduced we swift And out actions during or our teams service taken We furloughing have reducing employees. eliminated but reduce selling our painful, have of to expenses marketing by or

by than XXXX an our deferring XX%. As capital by our pertains to reducing our it needs expenditures, exceptional more capital have or teams done job

the capital million updated expenditures for for billion $XXX that are of spent be with Our balance $X.X year. only approximately the to XXXX remains now

our Now debt maturities. shifting to

$XXX million obtain liquidity been active very bringing for in to debt maturities amortization billion capital $X for of of lastly, the in down XXXX. last debt raising most have additional to able vessels been XX-month markets, we've our since remainder our payments, the We almost And call. our holiday a

Overall, burn month billion expect measures, expenses, customer Through to related is improve service to operating operations. we hedging profile, given a burn million to $XXX liquidity bookings. by opportunities which of Having estimate excludes the inflows as during XXXX of This combined. said per expenses, service, out been $XXX approximately million impact. to costs operating able all and in well a prolonged the new we range the we be liquidity More have refunds to includes magnitude and duration cash further $XX on these administrative and XXXX deposits, cash profile existing ongoing as ship explore of of to our Company's COVID-XX debt range suspension the to this, other than XX% we expenses, uncertain CapEx. our scenario. more continue to cash improve for expected of It this necessary from prolonged reduce of and

and outlook, this position beyond year experienced of many. for to and COVID-XX the We Asia now the growth on record-breaking top the as yield period, became a global mind a pandemic. spread as start update in sales. in Then, nice you which February began and changed business is would a January I strong a know for booked resulted Wave everything I

the canceled and then, voyages And we operations the time history, for we March reduced capacity announced have days. total, first we in we have the suspend XX in suspension for approximately our XXth, On Since year would by extended that cruise our for XX%. further. XXX

mid-February near remained than more our From At of deteriorate 'XX started prior then at year was substantially the and lower a onset demand typical on time, suspension global term levels. standpoint, the cancellations for that cancellations mid-March. cruise fell while increased to materially bookings in in the level same to

fourth While quarter than they bookings they better mid-April, sales. XXXX still were driven remain by and in suppressed, XXXX improved for the are of now trends

point, mid-single-digit last last with down For time But the is load very XXXX, still the in are single remainder cycle below year, this Prices It time load low well the are booking in for of in booked but range. same early behind factor booked 'XX within business currently prices factors digits. XXXX. at are ranges. historical are we up for year same

for demand booking there that cruising. current trends indicate is Our

guests in are with of now have certificate more on booked the program. approximately And Also, flexibility, our XX% are an requested voyages Cruising FCC. XXX% these provided a guests sailings, suspended future However, with we require booked a introduced holding Confidence flexibility the To-date, provide to who has we of that the have one ever. than option cruise and on cash refund of refund. lieu of remainder guests who are the

Approximately FCC actually already rebooked rebooked voyages. category. similar guests have XX% future using many have itineraries the Most been are XXX% to of on higher value upgrade a to saving issued who and on

you As at loyalty a pace guests non-loyalty faster may our FCCs than that are their expect much guests. redeeming

X. XXXX. first shift for I results focus now on will slide results quarter of the the summarized to our These are

of a was really quarter tale two quarters. This

well. with strong based particularly our Asia, North across During six of geographies the for the first American were booking trends trending except major sailings all weeks year,

While impressed Perfect the prices ships. achieving for booking modernized itineraries, were we with trends pleased those were at on CocoCay, with extremely our visiting sailings for most were we particularly particularly we Day

Even sailings growth. though canceling poised strong the we yield for of in of load and started booked January, at strong prices were another a we in we're end factor still at year Asia

the impairment approximately operations. March the capacity $X.X precision Asia XX% during led quarter, The in On of with in guidance. in combined cancellations a reduction asset to also sailings a versus earlier non-cash This of our suspended recording of we impact global first COVID-XX XXX the of billion charge. resulted XXth, cancellation

remains per timing or net driven to are basis the $X.XX guidance $X.X share, year. so quarter -- was $XXX a share U.S. the recovery uncertain, million impact. or for unable net share. and The COVID-XX we loss GAAP on of recorded provide a for adjusted entirely and billion the by of negative we further The trajectory a of result, per $X.XX per loss $X.XX a As loss

The net on loss However, and Service. to the on fiscal and the a does depend will extent XXXX both basis the magnitude Company a incur of expect GAAP Return adjusted year. for quarter loss second to the and timing of our

As extraordinary beginning I of mentioned the remarks, at are these times. my

that are made confident vacations have delivering impact again. the of mitigating feel our can't of solid business through We out. come progress scenarios could wide we for range this that on prepared the COVID-XX amazing in wait play successfully and and will start We to

operator the session. that, for up I With open question-and-answer the ask call will to a

Operator

Steve first The Instructions] Wieczynski Stifel. [Operator question will from with come

Steve Wieczynski

morning, Good was That Thanks helpful. for very guys. details. Hi. all the Yes.

we've just other a So, good for But, clear think road I a us you for Jason, what of have guys equity down you it's seen that liquidity? go the options appetite your highly you can if your further help pretty period in what guess, an the convert remain are I and pretty now. environment dilutive revenue path, in to about liquidity down position extended mean, wondering you increase that. like and zero time, competitors something is right

Jason Liberty

comments. the Sure, for Steve. Thanks

our to bond we're really by on additional is But that debt. about by the we the gain thing of liquidity to really it lot able happy with bond especially that We we we other were that week. for capital, a money. So, were additional happy closed raising flexibility raise really us that yesterday, raising provided launched last that

that to liquidity. if be and how pretty additional plans, significant us. depending our adequate our add a believe But, we would consider certainly that Service play I out, raise have alternatives as we on And would we ability there's we that things that on to basket all also to debt. them, flexibility need So, to and consider Return circumstances change, would those available

Steve Wieczynski

would on do? last want option to equity/convert your that, add be would to the But you that to

Jason Liberty

I But, maximum purposely would we to are we overall that sensitive that I on side. dilution. made sure think we very debt had say flexibility the

Steve Wieczynski

on you great. what now around the here so to of be in see and telling the Service focused you world? second question do around to would everybody for is But then, U.S. strong be of the guys is the world there do that here seems Okay, JV do your rest U.S.? rest TUI, in could fear right if or And position the I CDC your with the your And around, some CDC ships Return It given from the potential how negative they're yes, like, answer sooner operations in the government? China start guess pushback the U.S. you couldn't and than you

Michael Bayley

Michael. Shanghai, the in is had then the back that's from Committee country. it's of Steve, went update countries. by that it's and national markets various was we've and And say of with Interestingly, that this where likely I come I in discussion course, CLIA that team the Hi. region And the particularly for from yesterday, yesterday story China extensive the China. from of European in example, could on China I they we had Asian European directors region Executive experience because feedback the and call an by highly all our European earlier, the different would or very think, true either through earlier, call

very aware to does it think I relatively we're global that infrastructure landscapes. that leverage different So, this pleased we're And of if also to materialize. we utilize have opportunity, can these

focused call, to the CDC, your with about a with safety Richard Healthy are and obviously, this whole as ensuring think, I we highly on the started Service. ensuring, comments Return

as only plan. our So, a believe we to comforted going to regardless guests the plan that way be right will And of however, Service market, we Return to return deemed that we're have to we service, Healthy forward. return regional when service that’s by

So, it's interesting.

to going power those see different come and at I is our a infrastructure global our back markets will us strength we the different pace. really opportunities. think think And brands I of through

Operator

Barclays. Hendrix question next will Felicia from with come The

Felicia Hendrix

not many are liquidity assessing like they is It much as seems question. so as can, just given sectors, the across window now. different Jason, cruise getting market the that to companies just open the back

So, as to some may your decision risky. wait view

I'm your that thinking then, for liquidity starting secured see the already help recovery? you you're understand optimistic done any regarding on you're also, incremental that you just about rollup? we quarter. So, haven't just fourth top you the -- into that to can how wondering, demand read should that And what mention than mentioning you us did You're feel you've others fact of more

capacity just about the amount the of industry So, how wondering should roll out you'll we as think that opens.

Jason Liberty

Yes.

first the take I'll one. So,

it we're read would you think that way the think, is, optimistic. don't I I overly

I looking kind situation. our we different of evaluate reality us the think all when at are Return was different this we of raising that past and Service capital emphasis week. the we did the scenarios; And -- for being to plans the that

see evaluating. So, think things the have quality I a assets. different that think if that the brands, again, we're we good I how that I would evaluate change play markets scenarios have of see out. think of quality we to we And we lot And outside circumstances

So, at read we're won’t into that I it all optimistic.

I we we more taken our the to we on think. there's think, it that cost And raising reduce rate. further currently also think on actions to think what that us capital I for and do, based read would off side we've the burn of opportunity into the side capital

Richard Fain

I'll process And, and Felicia, service. of returning just to the Richard, is this on comment

start, blows like is all will ships going don't opening start that societies it in to somebody think bit I operating the gradually. think, and right be a someday We this we expect a that gradual up little -- away. is a horn be that

-- the from fewer with start And shifts more more then they in likely with grow and drive would evolve that markets and and would there. we would imagine smaller to beginning, we be so,

of the what's they're the are where in countries, in different differences to back coming between and that being question earlier going. such society think, also where the different local with ships mix happening happening what's I

ships on area see So, not market. degree you're the depending thing, of But think that we what see I in that your and slow high suddenly that of also the coming world second back answer a question, a gradual talking as lot about. you'll of variability to

Felicia Hendrix

first then, question. Thanks. And on follow-up just answer Jason, to quickly a your

capital on were you your look to -- filings burn several you continue of when Just at on side. in reducing the the said you cost cash and talking that

layups would more cold have your just wondering, layups It that more in are. that's is been to your ships those of transition your filings. one to be seems Just in It's fleet. the competitors more you versus where among of warm options -- in your language much

Jason Liberty

look an type there That's while ships teams costs maybe small. berth with exceptional I the creative move of our of even ships a layup. But, differential is of cooler operating operating. think a I really the have found of one reducing avenue. mean, to layup, really if And at our on are in job ways into warmer layup basis, them per very done a not the some opportunity have we've to costs the a cost being you

under many to think So, further rate. one that's burn levers reduce of I evaluation the

Felicia Hendrix

Okay. Thank you.

Richard Fain

Thanks, Felicia.

Operator

from The with James ahead. Please go is next Wedbush Securities. question Hardiman

James Hardiman

Good morning. Thanks call. my for taking

I Healthy it's a So, the program. that, your you difficult have fair think I that one. a component delineated about with question, fourth ask I Return but to wanted to Service

the And what But would and outbreak just going one in the of scenario? you preventing -- Obviously, a there's I to go think ensure parts do that's over event ship end are B, of how what from the how into you that ensure how I no happening. you that about do lot actually and of somebody course thinking April home that on stranded? had an early up don't ultimately board? striking happens them contracts March in A, customers we saw ships then weren't happen that get unfortunate was Specifically, guess as allowing where go. to that the return. potential that doesn't virus where

of one you but ultimately scenarios consumers So, going be there reopen, do how as vaccine? no they're is give that comfort to not those in you the

Richard Fain

Yes.

what obviously as And working issue. it the a of those very out. the conscious a it. of part think We the is mentioned, very experts fourth much We're where on I four we're you situations. series think looking premature of with come we're So, of all topic is one at, to is

four, go virus -- because premature thoughts for do of we knowledge of and have through changing. both do can knowledge can better getting the but to the think, any the we keep what I one with on keeps also we it us it's of

before questions way have forthright coming both, the service, will that I way. we as to with that out handle So, come of proper to be it and will important to to information approach how And it's Service, about Return we more be be that. transparent operate. Return the will it's Service, a address safe our to we And that providing on one to say, Healthy we as

James Hardiman

the Okay, question fair about got won’t Can out? the ladder But think think enough. might do you going you I help point And in net I'm inflows balance way to even you up? assuming us when you essentially to appropriate? we And in but this then, as ask can that other when form maybe refunds next maybe, customer will the form the idea customers, any ask. outflow I two size deem that at the you've you any of in each was maybe a it’s deposits. help us, of think cash and outflows

Jason Liberty

out the we that guests ebbs in further booking sailings. cash first back. to canceling, for of sailings a about is then, and asked are XX% the about, that I that between path it there's you’re So, frame terms of of customers our And canceled of difference would which that their flows talked way kind obviously

But, into look period you out for occurs the look at of kind less XX% or sailings, been outflow those obviously, of that when at QX, you seeing. we've look next a that So into ones we more year, of when there's you that time. lot cancel

is and you to customer sailings or an and see QX to that canceling of you the we're I it's on You And begin or guest whether where focus the to to do more you begin they're than you get point, not reimbursed. hold see occurring on outflow sailings, not that's see 'XX. you that and where we look beyond. see to where kind to most more get inflow of as you're occurring inflection really considering outflow into And when canceling going also think I when is as more and the point booking think, at FCC

James Hardiman

Okay.

we when you clarify, are So, one think ships you maybe those timeframe, that but could potentially two just July-August another? as to resuming, offset get into think

Jason Liberty

think, sailings back be think you been level, are which the elevated. I stay-at-home when canceling an I would a get going in to are at to especially example, of more very much up elevated. of to operating, when you order, once it to levels. But XXXX be move cancellation yes, everybody's where you will obviously, and you’re you see expect rates when as typical Well, cancellations you're course, And look typical at

James Hardiman

Got it.

Jason Liberty

to made want focus would my their comments, as our guests I programs begin been very Cruise point see to by other by just really guests. I The can our and love accepted of out. further the been add their forth, And have well cruising loyalty have as is, really really of Confidence they in absolutely incredible and in support. And our you so trade

Michael Bayley

Jason's to it's of James, color comments. I'd like little Michael. And add Yes. bit to a

members. to has like, loyalty various what seen promotions been response really looks surprising million the XX we to into we've close positive. think, And, to put market, understand demand just we've loyalty I And our demand got members. their from that surprisingly the remember,

QX into the seen as we've of So, we've we surprised from into move honestly particularly that in coming guests. demand the loyalty in, and 'XX, been terms

Operator

will come with next Tim go Wells The Securities. ahead. question from [Operator Please Conder Instructions] Fargo

Unidentified Analyst

what your Karen remaining maybe unencumbered calling vessels latest round us of remind just you first other and your assets is could is Tim. maybe following or well? in Jason, fundraising, quantify bulk This question, including just for assets as

Jason Liberty

Okay. Sure. Hi, Karen.

Tim. than better sound You

So, morning. good

-- balance assets sheet. our the we so encumbered basically of unencumbered So, in about billion that terms of $XX

unencumbered. the to were would would balance be an choose got we not of very available, additional balance liquidity type example, to structure, OpCo you've available percentage all be And large if that a so, via that And of the of that raise for of but debt. like is

Unidentified Analyst

And line? X.XX or your circumstance call issued, given at that there that latest pricing this the would, any was debt Silversea point, you your is on reason

Jason Liberty

And would at king. than in course, to higher Well, raise I rate of Silversea. at if time, point this think be point that is at debt, a additional might be cash we were this the

point plans. all alternatives But, structure. So, have to this are different think I don't evaluating we any at we specific our scrap capital

Unidentified Analyst

-- Okay. maybe is on when Could relative means for historical historical define mid-single-digits, And relative that lastly, what commented a booking is that up 'XX? commentary. but relation you your where to clarification to just And XXXX XXXX, or to pricing you? in it is you that's

Jason Liberty

of volumes XXXX. weeks, those are as trends our five that looking trends of thing four up is for And half the say next typical little we're factor back the The at lower little not I It year even demand that remarks, up over would I 'XX than versus -- and load back will and weigh is the are three the that on I levels, as years be than rates is levels, is that on, down, bit on what at think that. And XXXX. mid-single-digits a support apply we've kind are guests a I for past of to seeing over that past today, the and but rate. will strong lower seen this demand in what year in seeing levels But much What say fluctuate continue also calling our our FCCs -- to seen years. several commented the it's over is, rates on are average. bit. will is the number continue we And my typical terms to would depending only are typical for side depending that rate 'XX, overall, we've on past we better

Unidentified Analyst

last that Okay. to there or cancelled new in bookings the sailings? of say that that. weeks re-bookings Would four those follow-up will be I'm sorry. One you more

Jason Liberty

much say, Yes. new would more it's I bookings.

FCCs them we about of that booking On a the forward applied, out have we but that the there, XX% period. been it's small percentage of very have

about relates new So, booking our the commentary bookings. really to environment

Operator

comes from with The Morningstar. Jaime Please next go question ahead. Katz

Jaime Katz

income quick us just I how question. one curious are of across out morning. help the Good FCCs Hi. resilience you'd parse I'm looking the demographics. have if

you're if And willing out. were and booked. at Royal seeing if of Lindblad that customers curious Thanks. RCI, break think I Silversea or had trends that said to similar versus Caribbean taking more you're were their better credits I'm

Jason Liberty

I'm and would and the more give or that see and is the to taking typically take looking relatively FCCs. are utilization millennials the taking it. while younger skewed the the impressed families are members. that towards part more of what really and numbers and FCCs color -- those been are The I our likely baby overall, younger back, But, boomers loyalty mean, cash FCC you utilize Utilization FCCs we've would for of cruisers, are I talking their millennials to the also the the with

Operator

Montour with go The is Please JPM. next question Brandt from ahead.

Brandt Montour

Good taking question. morning, everyone. Thanks for my for Jason. Quickly

you to Just do system see to reach need that in And do the ships terms does breakeven what on wondering, sailing have load to you you Company factor? guys what at needing how for assume large, of many for EBITDA?

Jason Liberty

our we XX% load question newer answer, fluidity of factor impossible kind of situation. skew of XX% ships. that to because almost to on and about EBITDA our even load you ships, they say basis, find for It’s I older about the onto is would Yes. then what break an factors to is need the What

the levels to done I costs. -- So, of kind I to we've of a a We've size wanted you -- -- model, if it that about way done but, our return a it's either. would right to be build think don't would you certainly kind our lot service, you as not so that minimize to And fleet load exceptionally factors capital, high, you break to lot entire to the operating at need even. do need full

-- to relatively a short to I back period breakeven think, we you'll Return time. EBITDA of get his slow Service, a just

Brandt Montour

well, what Thank scrap on appetite of curious the where then industry's and That's ships thoughts under suspended were prolonged I were specifically yourselves scenarios was to then, Okay. here your helpful. period And as if a things for you. time. certain

Jason Liberty

Yes.

what capacity we seen see of that much a scrapping have think, that see lot a here side. on than hasn't think retired will side. I a in at past higher much there that the opportunity I of been you'll that do there's because pace ships really the you are

to for combination the the building see then the yards new are And and some us older back and then because industry, regulations, not about and probably impacted. running. for just beginning getting The COVID vessels just with chain the themselves programs really interest reality of -- the up the for happening what's of will that they'll think, I think slow there's has the slow they’re supply they're possible and in sale. been IMO you'll operating,

so, And it will take time.

foreseeable weigh shift not And future, for side, capacity to so, delay some building time, permanent catch permanent going because likely on -- the the on new be and very especially buildings new up, a for it’s you're shift shift. and going it's which growth numbers a to see to a of is

Operator

will with Stephen next The Grambling come Sachs. question from Goldman

Stephen Grambling

of on questions. confirm for a the the XXXX, longer cruise bigger but you cash? but liquidity, of near-term currently to had to in Thanks still be you've this taking whether the receiving the both And just access what One, do level, mentioned Company, of forms quick still fleet right for recovery, based also future think about percentage invest at then that for in can and term can you how redeemed then, debt bookings appropriately you experience environment? you on is picture other for credits level Couple the follow-ups. ensure

Jason Liberty

So, I'll just second one, real Steve, the take quick.

-- which to goal ultimate our credit. very our an here, been key -- of we've grade terms is be In consistent investment goal

real as we how our the as the And order here, first go with just so, do in we additional to question to as and are possible back path to quick? capital at metrics ourselves to then a on we’re repeat Stephen, associated sources, obviously, you leverage, investment Return could when leverage, looking grade get Service. we carry negative soon we're evaluating considering that considering get

Stephen Grambling

bit of just be a on what But, Sorry bookings the cash? currently little about for is of an credits can getting had still redeemed cruise intruder can and percentage there. fleet you future that. confirm We for whether XXXX

Richard Fain

Confidence, to customers who is existing currently, receive with of you until early departure, two then at flexibility to XXX% Confidence can give one you really which place, with even within really utilize which final Cruise of a any payment, FCC your customers penalty key then the and in and launched to have the basically So, hours with for we way a can because immense XX within value, the is sailing programs Cruise you really cancel point as we XXXX. are sailing can and up full considering of

So, option cash to that's you an simply FCC that is sail. move refund really feel with basically ability utilized your with refund Cruise comfortable whenever heavily, comes no It's that Confidence. because there to booking, the -- is

but sailings XX% And future think when other not they provide we simply holding I able be then introduced, their have I'm to a I our taking the it if can future it. refund programs, you the you and allows and already our may the give on with also sure answered question, for as booking, credit of guests secondly, with answered cruise future mentioned, lift the XXX%, refund credit choose. whenever I a lift cash cruise these then, is your option choices. to to which move about guests provided called are and something I are a utilize a sailing. shift, we've FCC booking think up to and future course, suspend two we And which customers Either one, XX% basically Jason's have we'll of or

Jason Liberty

And brands available to for are and for XXXX. sale just on fleet our add it. Currently, entire

Operator

come will Farley from with question UBS. next Robin The

Robin Farley

million you expense think Because your of maybe, ships you $XXX I what if is stages to layup. wanted get maybe or burn the talked million in a of rate said are sort operating mentioned that sense you've various about, I to of before. $XXX

So, down, to have XXX in laid to up wondering, as much per expense you everything just how as that operating much you be? come when month expected could XXX

Jason Liberty

million a XXX. ship, and it with way a and laying there's state, X an a, if the also the I to then and cost it's just cold forth. has movement in up, there's Yes. executive it’s of number, you definitely mean, I -- when million we're of million warm in and in between month. typically, opportunity call do between XXX give I X X.X it's can way a that so wish of up crew to about somewhere month; million But, X.X because to a a some a

the that layup thing cost them, opportunity there's bring more a So it we cooler layup. the about state hot you of them from will be cooler them able into also those as think move bring back more to up, is operate. The cool we to to the to a have make into a to

Return and the are thoughtful plan up to at first. looking come Service which just going is to it of about being ships some So,

we back As a switch. a the Richard not commented, It's as more dimmer it's fleet that light of on. bring

the the that's But, to on going there. It's But, things it's one of be better million. the And so not XXX consideration. opportunity of could than that's zero. certainly definitely be kind there's

Robin Farley

rate about credit. then, increasing just taking or the an only was cruise you cash. the seen you another of talked And in clarification, release not, an you’ve has wondering, XXth. of just kind of cruise about rate three that increasing talked And weeks, in I'm last line because April people as number the of the future noted if taking

you're if Thanks. same saying the thing. wondering I'm So,

Jason Liberty

XX%. more of getting and the seen a America. than versus the are as an we've in that wise on of guests is, previously were guests from -- little to a sort not with markets start experiencing what I FCC, you the average has is bit seeing cash to do like sourced what taking the be world finding cash what that rate There has overall, more little in more things, we're parts the relative So, the North increase been the some of of about most what But, a internationally to of is pattern choose mix mean, FCC. other guests often we which we're of different bit versus

Robin Farley

Okay, great. Thanks very much.

Jason Liberty

Robin. Thanks,

Operator

question The from Zackfia with Please Sharon come will Blair. next ahead. go William

Sharon Zackfia

to is your I color understand one thing the to Good costs morning. kind would scale ability as Thanks you ships, all guess, of operations. this for the helpful resume on morning. Hi. be that the

thought your of fairly to So forward? I don't is think or you we ability know about would what cost. initial the as And that loads going fixed scale typically, how labor to ships

Jason Liberty

bring your where to what a the you your flexible factors much they're know this, think we And and then are the or In variability of on that's costs. like ship lot your more off you're are. able fixed opportunity on as going you load a crew which be current be, because, to states more is to in costs have manner, going

So, we have to our lot what that will variability of based. seen ships And service. I see as historically think that deployment than more a also we return be

Sharon Zackfia

to I Jason, you look have missed But, range of what kind And initial indicate did as load this. might might any like?

Jason Liberty

not. have We

miss You Sharon. did not it,

Sharon Zackfia

there? of kind Would you estimate us any give to like

Jason Liberty

would I not.

so around dialogues would a lot think, and I of be of and load different of having what regulators with more determined be that will it we're the more -- our the factors. That CDC based be calibrates thinking will forth. of the off

Operator

Georgieva The next question will Infinity come from with go Assia Please Research. ahead.

Assia Georgieva

Good morning. my question. for taking And thank you

much seems away XX Carnival only that of pause. their a you you considering you too I Are period pretty to missed just weeks Given probably and extended three a may you anticipated, for also further voyages? Have canceling maybe extended saw much extension? Norwegian have a be soon. of further the June all ago, then brands pause -- had a longer operations fact that hours have their couple little

Michael Bayley

Hi.

Interestingly this further will is voyages of of afternoon XX. July, The exception operations. Assia, our suspension until until the plan only be July Michael. the will end to be it's enhancing suspension China

Assia Georgieva

lot of ports a the makes the And logistics which itineraries whether front. up you ships visit, Is or into that that Michael. that of communities might something allowing their That seems to outside a that as big It to embarkation, on you, allowing ports open enter ports Thank sense. would be separately Asia? thinking plays hurdle. disembarkation

Richard Fain

we when fact, Return So, lot there? ships of our ports Service. requires many be discussion, interestingly, over Yes. world plans service Return it's of with planning around Healthy a in our the are And different many needs to and part destinations in because dialogue are in returning already we're opening. And And really in interested in to bring a of It's we and how to surprising Service. to ports asking calls very going and point. to terms and it that that destinations and us are we great XX get

one think thing Difficulty]. example, [Technical I market, for American in the fairly true is that

Assia Georgieva

Day Perfect kind that. It I me guess. Perfect day, since to I And open perfect on seems think there. but to the -- didn't and mean lot lost available a of be yesterday call makes I that you you sense. I perfect works, you would were But up it sooner. mentioned the that the with opposed willing the we're fact Caribbean a as CLIA to probably sooner Difficulty] curve and a on. the [Technical that in the members of European lot despite in that along more further that's ports, be might up European Europe interested Is Nations, opening fair is assessment? the and probably sense,

Richard Fain

I one the other. It’s you generalize don't over very can think --

I think a a it's mixed very story. it's --

country went and in first. many think, certainly I is every can every say through journey. ways, on region, their that generalize this own I to And Asia China you maybe think

the thing the logical just from first. And it's they're same in in with think it's the Europe, I and Caribbean. emerging with U.S. now So, everything this course, of that

it. logical kind a So, society a of first out as went about with people coming how there's relationship people and how into of are a this thinking

Assia Georgieva

vessels? smaller get vessels I would more also occupancy, to provide one as social opposed that you That makes sense. about go actually sense here. distancing. opportunity If to can with first, breakeven at Jason, larger last one EBITDA, in an they Does better mentioned make it to vessels the newer sneak for XX% those

Jason Liberty

So, good point, Assia.

economies there category public fleet the fuel is reach. it factors So cabin fleet, broadly They're within and is first, can efficient, very extremely I great very -- makes be -- lower space have scale. would our on of Really very because ships a more to. load have Service, more the they is well consideration space few But more years we've and Return certainly Difficulty] to newer heavily in public ships for past modernized the the for other good. would and as as have that be [Technical venues say

Operator

The question the comes next from Ciepiel. Vince

open. is line Your

Vince Ciepiel

industry in of in unprecedented travel folks this the demand. mentioning of variety nature off fall A keep the

relative compare actually the it seems kind in sounds months for think of XX ‘XX pricing happened at what you when are So, people or to you because in look holding the stronger what kind industry are pricing, timeframe, the XX doing line 'XX a you doing, out Can with it healthy. of you is what X, ‘XX, quite your like the next manner.

Jason Liberty

Yes. line all sure I'm not sorry for But… open. background. is what I’m the quite

Richard Fain

Yes.

I one not think we of because our the it's should lines. ask operator,

Jason Liberty

Yes.

action. to So, I in done, that, in that terms I effort industry that much think the your people I we've price of being is and was the done seen been I the what think measured point, integrity more taking one -- of we've have we've others is pricing generally think all things seeing around

You see into of next there's load the early of your are stay for will support And likelihood the more time lower promotional activity, be going we that pricing a relatively factors more seeing packaging, going course, period but part that of pricing stable. year. to help also some

Okay.

interest you really thank you Company. a today, great for day, thank have. any all and homes, And your you of Sia, Carola assistance and with today. for take wish participation might we And our from in available care. So, calls all the the safe. we your follow-up for be you Be will

Operator

participating for Ladies and conference in you gentlemen, thank call. today's

may disconnect. You now

Royal Caribbean Cruises (RCL) 20 May 202020 Q1 Earnings call transcript