Cancellations, Screenings, Contingency Plans: How Cruise Line Contends with Virus Threat

(Associated Press) Royal Caribbean has canceled eight cruises out of China through early March and is taking more precautionary steps because of the virus outbreak that began in China.

The number of cancellations at the cruise line is up from just three last week, as is the duration of those cancellations, which had been through early February. The Miami company said Tuesday that it is now turning away from its boats anyone who has traveled from, to or through mainland China or Hong Kong in the past 15 days.

CEO Richard Fain said Royal Caribbean will likely have to cancel more sailings in the future and that the outbreak will likely impact future bookings in China. There’s currently no way to accurately provide specific cancellation or future booking figures, he said in a conference call with analysts Tuesday.

A contingency plan, if the outbreak continues for an extended period, includes redeploying ships regionally or outside the region.

But Fain stressed that Royal Caribbean, which has operated in China for more than 10 years, remains committed to long-term growth in the country.

The Miami cruise line is now turning away any passengers who have traveled from, to or through mainland China or Hong Kong in the past 15 days, and issuing those people refunds.

Passengers who’ve had contact with people who’ve been in China or Hong Kong in that period must submit to specialized health screenings. Anyone traveling on a Chinese or Hong Kong passport, regardless of when they were last there, and guests who report feeling unwell or demonstrate flu-like symptoms, will also be screened.

Royal Caribbean said the same measures apply to company employees, crew members and contractors.

Royal Caribbean maintained that while there’s still too many variables and uncertainties about the coronavirus outbreak to determine the impact on its business, there could be a material impact on its overall financial performance if travel restrictions and concerns over the virus outbreak continue for an extended period of time.

Royal Caribbean Cruises Ltd. earned $273.1 million, or $1.30 per share, in the fourth quarter. A year ago, the company earned $315.7 million, or $1.50 per share.

Stripping out one-time gains and costs, earnings were $1.42 per share. That’s a penny better than what analysts surveyed by Zacks Investment Research predicted.

Shares climbed more than 3% in morning trading, erasing about one-third of the losses it’s incurred over the past month.

Revenue totaled $2.52, falling short of Wall Street’s $2.54 billion estimate.

Royal Caribbean foresees full-year earnings in a range of $10.40 to $10.70 per share. Analysts polled by FactSet predict $10.48 per share. For the first quarter, the company anticipates earnings of 80 cents to 85 cents per share. Wall Street is calling for $1.15 per share.

The cruise operator also set several goals it wants to accomplish by 2025, including reaching an adjusted profit of $20 per share.