Michael Bayley Discusses Return to the Caribbean

Michael Bayley Discusses Return to the Caribbean

After making waves announcing Royal Caribbean International’s return to its namesake region with Adventure of the Seas, President & CEO Michael Bayley joined an FCCA webinar on March 22. A lightly edited transcript of that webinar follows:

We actually started cruising in December from Singapore using our Healthy Sail Panel protocols, and we’ve now operated for multiple months, carried close to 50,000 guests out of Singapore with great success. A few weeks ago, we announced that we would start operating from Haifa, Israel with Odyssey of the Seas in June, and late last week, we announced that we would start operating Adventure of the Seas from Nassau on 7-day cruises commencing June 12.

The Singapore product is protocols and testing; the Israeli product is testing and vaccines; and the Adventure product is going to be vaccines for guests 18 and over and all crew, with testing for the kids – and testing for everybody to come to The Bahamas and then reenter the United States.

The response has been very positive. We also get a lot of number of our guests who are critical of our vaccine-only cruise, and I just want to say that we don’t think the resumption of cruising for the industry is going to be one or the other. We think it’s going to be some combination in the future. But this is our attempt to restart cruising in the Caribbean, and so far, it’s been very well responded to.

How did you pick this itinerary? First of all, we picked The Bahamas because it’s been one of our longest relationships – 50 years we’ve been operating to The Bahamas. The first cruise with Royal Caribbean went to The Bahamas. We’ve got a long-term relationship. It’s the number one most popular destination for our guests. We’ve been in discussion with the Bahamian government for months about how to do this. And, of course, we have Perfect Day at CocoCay, which is a massively popular destination Eighty percent of the consumers we survey are going to get the vaccine. Sixty percent of the customers who booked with Royal Caribbean since January have been vaccinated. We surveyed our crew – close to 70,000 crew from 100 countries, 97% of which responded that they are going to get the vaccine, and already our crew are getting vaccinated in their home countries.

And what we see now is the fundamental relationship with consumer confidence and our bookings are very strong. As people become more confident, they are booking. In the past year in the American market, credit card debt for the consumer has dropped significantly, and savings have increased. There is a lot of pent-up demand, and there’s money in everybody’s pocket.

We’re now seeing for our Q4 2021 into 2022 real ramped up bookings; it’s looking very positive – and the relationship between demand and pricing is extremely strong. If there is demand, then pricing tends to be very robust.

What will be the capacity? We’ll start first sailings around 50% capacity. The crew are coming back to operations after over a year, so there’s a lot to reestablish with training. As soon as we’re comfortable that everything is operating as it should and in partnership with the Bahamian government, we’ll increase that load factor week over week.

“THE MAJORITY OF CONSUMERS NOW BELIEVE THAT THE WORST IS BEHIND US.”

within its own right – plus we can have a lot of control over the environment. The other thing of course is its proximity to the major market of Florida and the United States.

How long will the ship be staying in the ports? It will be in Freeport for the best part of the day. It’s going to be in Perfect Day at CocoCay for two days. And then it’ll be going to Cozumel for the day.

What have you seen reflecting the pent-up demand and pricing? We’ve been surveying our customers ever since the pandemic started – and when things were looking pretty bleak, the confidence of consumers was extremely low. The vast majority of the people felt that the worst was ahead of us, not behind us…in the past few months since the vaccines have rolled out, that has completely changed.

The majority of consumers now believe that the worst is behind us. The majority of consumers feel as if this really is the beginning of the end of this. Can you describe the bubble environment for tours? With the first cruise three months away, we see the evolution of the environment drastically changing in the coming months. As more countries, destinations, communities and populations become vaccinated, we believe the thinking of the protocols of the past will not necessarily be how we operate in the future.

We think it’s going to be a combination of vaccines, testing, masks, sanitation, etc. We’ve been very careful of those sailings in June not to be very specific

of the details on protocols because we believe it’s going to change.

We already see this vaccine is very powerful. We’re going to follow the science and utilize our Healthy Sail Panel to define that. In its simplest shape, I think what the customers and destinations expect is that there’s a pragmatic, sensible approach to protocols.

From a commercial perspective, what’s important to know is that we will work in complete partnership with our destination shore excursion providers as we have always done to find win-win outcomes.

How have your talks with CDC gone? We are in regular communication with CDC. Over a week ago, I communicated with the Deputy Director about our plans in The Bahamas. I also shared our discussions with Israel before that announcement, and we’ve shared information about our operations in Singapore. They are very open and interested in understanding how these different operations are running because it’s going to shape how they view the resumption in U.S.

The conditional sail order was issued five months ago before vaccines were widely available. We’re now in communication with CDC specifically around this point – do we really need the order when it’s based on science five to 12 months ago, shouldn’t we now be looking at a new world where vaccines are widely available?

We also understand like every health authority, they’re under incredible pressure and we have to be patient. We’re hopeful that soon we’ll get guidance or the lifting of the order and a sensible, pragmatic approach to resuming operations.

President Biden made comments about opening up the United States by July 4, and we would love if cruise were a part of that.

What vaccines are you accepting for passengers? We know that the American consumer will have FDA-approved vaccines and that in other parts of the world, other vaccines have been approved. As we’re initially starting with vaccine cruises in Israel, the vaccines will be determined by the Israeli government – and in The Bahamas, we’re going with FDAapproved vaccines and also WHO vaccines because The Bahamas accepts those as well.

Michael Bayley Discusses Return to the Caribbean