Cruise lines report surge in bookings
Three major cruise ship operators that sail to Bermuda have secured billions of dollars in public debt and through equity markets to help them stay afloat for the next 12 months.
The companies also reported a strong level of bookings for next year as customers showed enthusiasm for cruise ship vacations as the Covid-19 storm subsided.
The news was a hopeful sign for Bermuda, which has had 68 cruise ship trips to the island cancelled this year, as cruise operators halted sailings because of the pandemic.
Norwegian Cruise Lines has raised more than $2 billion in capital to keep itself in business, although more than $600 million of that came with an interest rate of 12.25 per cent. The company, which operates Norwegian Cruise Line, Regent Seven Seas Cruises and Oceania Cruises, reported that bookings for 2021 are inside “historical ranges”.
Frank Del Rio, Norwegian's chief executive, told news channel CNBC: “Customers are still booking. Today we are only slightly below in load factors compared to where we were at this time last year for ... 2021 sailings. So our loyal guests are still behind us, pricing remains strong.”
Royal Caribbean has announced its intention to raise billions of dollars in new debt by offering senior notes that are due in 2023 and 2025.
The 2023 note has an interest rate of 10.8 per cent and the 2025 note is at 11.5 per cent interest.
The company, which operates Royal Caribbean International, Celebrity Cruises and Azamara Cruises, also said its bookings for next year were on par with previous years. Carnival Corporation, which operates Carnival Cruise Line, has a $6 billion debt and equity funding package.
Arnold Donald, Carnival's CEO, said the capital would give it liquidity to get through the financial year with zero revenue.
Carnival has also announced job cuts and furloughs as it battled to limit losses.
It said bookings for 2021 were “within historical ranges” and that 66 per cent of those bookings were from previous clients.
Mr Donald said last month: “We've had substantial bookings. Bookings for 2021 are strong.”
He added earlier this month: “It is clear there is tremendous anticipation for a return to cruising.”