Omicron ‘Has Significantly Altered’ Cruises. But Royal Caribbean Stock Is Rising.

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Over the past month, bookings at Royal Caribbean have dropped and cancellations have increased.

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Cruise line Royal Caribbean has seen a drop in bookings and an increase in cancellations for the first half of next year amid the spread of the more contagious Omicron version of the coronavirus.

But it does not seem to have affected investor sentiment. Royal Caribbean stock (ticker: RCL) rose 1.5% on Thursday, while the S&P 500 was up 0.3%. Shares of the company have climbed nearly 14% in the past month, even as Covid-19 cases in the US surged to new daily records and dampened sentiments about global travel.

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“Omicron has significantly changed the COVID-19 landscape for all, and Royal Caribbean Group is no exception.” The company said in a statement Thursday.

The company said occupancy for cruises in the first half of 2022 is below historic levels, although bookings for the second half of next year are within historical limits and driven by strong demand from US travelers.

While bookings have declined and cancellations have occurred over the past month – as Omicron has become the dominant form of coronavirus in the US – it has paled somewhat in comparison to the rise of the Delta version. Delta has been the dominant form of coronavirus since the summer.

Royal Caribbean said the group is experiencing service disruptions and has had to cancel or significantly modify 16 out of 331 destination calls. Countries around the world have tightened travel restrictions as COVID-19 spreads.

“We are constantly learning and adjusting as Omicron begins a new phase in the fight against COVID-19,” said Richard Fein, Chairman and CEO of Royal Caribbean. “We expect these factors to have a negative impact in the short term, but are optimistic that they will move us toward a more widespread but less severe health environment.”

Dr. Calvin Johnson, the cruise line’s chief medical officer, said: “Our case count has risen, but the level of severity is fairly mild. We will continue to be agile and in constant contact with health officials.”

Health officials, including the World Health Organization, have said that Omicron appears to cause a milder form of the disease, although it is more contagious. Royal Caribbean said the experience in its fleet is in line with these findings, with more people testing positive without a corresponding increase in disease.

The cruise line said it has carried 1.1 million passengers since it resumed operations in the US in June, of whom 1,745 people tested positive for Covid-19 and 41 required hospitalization. None of the cases are severe with the Omicron type or require a hospital visit. The company noted that these results are also the result of vaccination of everyone on board.

“We intend to maintain our goal of delivering the safest discharge on land or at sea and will continually adjust our processes to meet this even in the face of Omicron’s amazing transmissibility,” Fenn said.

As of Wednesday, there were 88 cruise ships operating in US waters with enough cases of COVID-19 to warrant an investigation from the Centers for Disease Control and Prevention (CDC), according to agency, Till last week, the number was only 53. Of the 88 ships, 25 are owned by Royal Caribbean.

Write to Jack Denton at [email protected]

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