Royal Caribbean misses revenue estimates as Omicron, Ukraine crisis hamper demand

BENGALURU: Royal Caribbean Group on Thursday missed Wall Street estimates for quarterly revenue, as a resurgence in COVID-19 infections in some parts of the world and Russia’s invasion of Ukraine hampered people’s travel plans.

Shares of Royal Caribbean Group fell about 3% in pre-market trading even as the company said booking volumes in March and April were significantly higher compared to the same period in 2019.

The fast-spreading omicron variant of coronavirus that has been a cause of concern globally forced people to reassess their travel decisions, resulting in several cancellations.

The company said, “elevated cancellations experienced earlier in the year (January) returned to pre-Omicron levels as cases subsided in February.” The US Centers for Disease Control and Prevention’s (CDC) decision to remove its COVID-19 notice against cruise travel in March, almost two years after introducing a warning scale, also came as a relief to cruise companies.

However, in March, Royal Caribbean Group joined rivals Norwegian Cruise Line Holdings Ltd and Carnival Corp in canceling sailings to Russia and said it was removing Russian port city St. Petersburg from its upcoming itineraries.

It said bookings for Europe sailings improved throughout the first quarter, but softened due to the Ukraine crisis that will have a bigger impact on Baltic itineraries.

Even though bookings for Europe are now exceeding 2019 levels for the same period, the cruise operator added the situation in Ukraine is expected to cause fewer passenger bookings in Europe this summer.

The company’s net loss widened to $1.17 billion in the first quarter ended March 31, from $1.13 billion, a year earlier.

The cruise operator’s revenue rose to $1.06 billion in the first quarter from $42.01 million a year earlier, but missed analysts’ average estimate of $1.15 billion, according to IBES data from Refinitiv.