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Even cruise executives are surprised by how many people are booking cruises

Aug. 14, 2020
6 min read
Even cruise executives are surprised by how many people are booking cruises
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You're not alone if you're booking a cruise for the coming year.

Despite a seemingly endless barrage of negative news about cruising in recent months, and the fact that most ships aren't operating due to the coronavirus pandemic, cruise fans continue to book future cruises with abandon -- so much so that it has taken even cruise line executives off guard.

"We have been both humbled and surprised with the amount of bookings we are seeing for 2021, with literally no marketing efforts and frankly very little good news," Royal Caribbean Group chairman and CEO Richard Fain told Wall Street analysts Monday during a conference call to discuss second-quarter earnings.

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The comments came just four days after the top executive at Norwegian Cruise Line Holdings said almost the exact same thing in a conference call with Wall Street analysts.

"I'm astonished how well bookings are coming in, given the fact that the industry is suspended," Norwegian Cruise Line Holdings president and CEO Frank Del Rio said on Thursday. "There is not a lot of positive news flow."

Both companies said bookings for 2021 are "within historical ranges." That is, their ships are about as booked up for the coming year as they normally would be at this time of year.

The companies also noted they haven't had to slash pricing to get the bookings.

Related: How to book a cruise with points and miles

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Norwegian Cruise Line's 3,998-passenger Norwegian Encore. (Photo courtesy of Norwegian Cruise Line)
Bookings for Norwegian Cruise Line ships such as Norwegian Encore continue to come in, despite the near-complete shutdown of cruising. (Photo courtesy of Norwegian Cruise Line)

"Pricing for 2021 bookings is about flat," Royal Caribbean Group CFO Jason Liberty said during Monday's conference call. But Liberty also noted the flat pricing includes a negative impact from passengers using future cruise credits to book some of the trips. Strip out the effect of future cruise credits, and pricing actually is up for 2021, he said.

Like many cruise companies, Royal Caribbean Group has been offering passengers on recently canceled sailings the choice of a full refund or a credit for a future cruise in the amount of 125% of what they paid. About half of customers are choosing the credit.

Liberty noted some new cruise bookings for 2021 are coming from people using the credits to rebook canceled trips. But it's not as big a factor as some people might think. More than 60% of bookings since mid-May have been new bookings, he said.

Related: Why shouldn't take a voucher if your cruise is canceled

Royal Caribbean Group is the parent company of Royal Caribbean, Celebrity Cruises, Azamara and Silversea.

Royal Caribbean's executives did say the pace of bookings has been affected by the news cycle in recent months, with bookings declining after stories about surges in COVID-19 cases. But, overall, bookings are up significantly versus the early days of the COVID crisis.

"Since our last earnings call (in May), bookings have averaged more than double the levels seen during the first eight weeks of the global cruise suspension," Liberty said.

In a sign that cruisers remain cautious, bookings are notably stronger for the second half of 2021 than the first few months of the year.

Related: A growing number of lines are canceling sailings into 2021

"You see this kind of line as you kind of get into the early to mid-part of the second quarter where there's just strong demand for the (summer) season and beyond," Liberty said.

The strong demand is for all sorts of cruises, he added.

"It really is across all of our core products. So there's strength in the Caribbean, our European products, Alaskan products and so forth," Liberty said. "It's not just one thing, but it's really clear as we get (into the second quarter) and beyond that there's high demand, and our consumers are willing to pay at or above these historical levels."

Executives at both of the companies suggested that pent-up demand for travel is a big part of the strength in bookings. The rabid loyalty of cruising fans also is a big factor. Even during a worldwide pandemic, cruising regulars still are itching to get back out on ships.

"I do believe that we, in the cruise industry, enjoy a very loyal customer base," Norwegian Cruise Line Holdings' Del Rio noted. "Across our three brands, over 50% of our guests on any given cruise are repeaters."

Norwegian Cruise Line Holdings is the parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

Del Rio said repeat cruisers would be at the core of the company's comeback in the coming year.

"We're going to lean on them heavily, (and) they're going to lean on us. They want to cruise again," he said. "Depending on when you think the restart is, there's going to be 15 million, 20 million people who were not allowed to cruise this year. And there's a lot of pent-up demand there."

Royal Caribbean Group's Fain echoed such comments.

"Our guests want to come back," he said.

Additional resources for cruisers during the coronavirus outbreak:

Featured image by Royal Caribbean's Spectrum of the Seas. (Photo courtesy of Royal Caribbean)

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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees