Omicron Disrupts Royal Caribbean Cruise Liner Operations

Royal Caribbean's cruise ship Anthem of the Seas in Bayonne, New Jersey, on Feb. 7, 2020. (Eduardo Munoz Alvarez/Getty Images)

Royal Caribbean Group has announced that the company has experienced a decline in bookings along with an uptick of cancellations in a statement published Thursday as the tourism industry continues to grapple with staff shortages and business disruptions.

Omicron, the latest variant, now seen in more than 90 countries, is highly-transmissible and anyone infected can “spread the virus to others, even if they are vaccinated or don’t have symptoms,” according to recent observations by the Centers for Disease Control and Prevention (CDC).

“Omicron is having a big short-term impact on everyone, but many observers see this as a major step towards COVID-19 becoming endemic rather than epidemic,” said Richard Fain, Chairman and CEO, in a press release. “We don’t like to see even one case, but our experience is a fraction of the comparable statistics of virtually any other comparable location or industry.”

Omicron has been found to cause milder symptoms than other variants and result in fewer hospitalizations. “The recent experience on Royal Caribbean Group ships is consistent with these observations. The numbers indicate an increase in people testing positive without a corresponding increase in people becoming ill.”

Cruising had restarted in June 2021, and since then, the Royal Caribbean Group (RCB), with a global fleet of 60 ships, has carried 1.1 million guests, out of which, 1,745 people have tested COVID-19 positive.

The company reported that “the vast majority of those cases had no symptoms or only mild symptoms, with only 41 people needing hospitalization. None of the Omicron cases have been severe or needed to be taken to a hospital.”

However, the labor-intensive tourism sector has been badly disrupted with many staffers calling in sick and carriers unable to provide services with crippling shortages. The company added: “Such disruptions are particularly impactful during the holiday season as the need increases and the labor supply is impacted by the current spike in cases. Similar issues are impacting the company’s onboard service capabilities.”

The cruise company has “canceled or severely modified 16 destination calls out of 331,” owing to service disruptions, which RCB expects to continue through 2022 and stabilize only by the next year.

After the Cyber weekend boost in sales, bookings dropped drastically but not as much as when the Delta variant was first discovered, according to RCB. Even though the short-term outlook looks bleak, “sailings for the second half of 2022 continue to be booked within historical ranges, at higher prices with and without Future Cruise Credits (FCCs), with strong demand from the critical U.S. market.”

Any crew member or guest who gets infected while traveling quarantines immediately in a cabin, and gets tested daily. The medical team onboard provides the required medical assistance. As a higher number of fully vaccinated individuals started getting infected, cruise liners like RCB and Norwegian Cruise Line had reinstated the indoor mask mandate for all guests in December.

Traveling to more than 800 destinations around the world, Royal Caribbean Group operates three cruise brands: Royal Caribbean International, Celebrity Cruises, and Silversea Cruises.

RCB share price has dropped over three percent since the announcement, but the company has increased 8.74 percent in value from the beginning of the year.