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Royal Caribbean warns coronavirus could hit 2020 profits
Royal Caribbean Cruises Ltd (RCCL) has joined rival Carnival Corporation in warning the ongoing impact from the spread of coronavirus could hit its full-year profits this year.
RCCL has, to date, been forced to cancel 18 itineraries in south-east Asia and amend several others owing to new travel restrictions in the region.
The line said it was in regular context with various health authorities, including the US Centers for Disease Control and Prevention and the World Health Organization to inform its decisions and best protect its guests and crew.
However, RCCL warned on Thursday (13 February) the impact was spreading beyond Asia: “Recent bookings for our broader business have also been softer,” said RCCL in a trading update.
Its mandatory and precautionary measures to mitigate the impact of coronavirus, to date, are estimated to impact on its 2020 financial performance by approximately $0.65 per share.
RCCL said if this extended to the entirely of its Asia programme through to the end of April, there would be an initial impact of $0.55 per share.
“There are still too many variables and uncertainties to make a reasonable forecast for 2020,” said Royal. “While the early impact, due to concerns about the coronavirus, is mainly related to Asia, recent bookings for our broader business have also been softer.”
RCCL added: “If the travel restrictions and concerns over the outbreak continue for an extended period, they could materially impact the company’s overall financial performance.”
It comes after Carnival Corporation issued a similar profit forecast just a day earlier, warning of an impact of $0.55 to $0.65 per share if it was forced to suspend its Asia operations until the end of April.
Royal’s measures to help prevent the spread of coronavirus have so far included denying boarding to anyone who has travelled from, to or through mainland China or Hong Kong in the past 15 days, and performing stringent health screenings on at-risk guests and crew. The line said it was assessing the situation constantly and would update these measures, as needed.
“It is important every organisation acts responsibly,” said Royal chair and chief executive Richard Fain. “We have already taken aggressive steps to minimise risk through boarding restrictions and itinerary changes.
“Our shipboard and shoreside teams have been working tirelessly through these circumstances and I want to thank them for all of their extraordinary efforts. We appreciate our responsibility to our guests and to each other, and our focus on public health is unwavering.”
James Chapple
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