Royal Caribbean Group missed market estimates for quarterly revenue as people were wary of cruising due to the rapidly spreading Delta variant of COVID-19.
Cruise ships have been sailing again from U.S. ports since late June with most guests and crew vaccinated, but a few cases on board and an increase in COVID-19 infections have raised concerns about the industry’s near-term fate.
Regular testing has helped cruise lines ensure that isolated cases of the new coronavirus do not develop into a full-blown outbreak, although response to the resumption of U.S. cruising has been mixed.
Royal Caribbean’s total revenue was about $457 million in the third quarter ended Sept. 30, versus estimates of $567 million, according to Refinitiv IBES. The Celebrity Cruises parent had posted negative income of $33.7 million a year earlier as it reversed previously recorded income from refunds and cancellations.
Adjusted net loss was $4.91 per share, versus estimates of $4.41. Passenger ticket revenue was $280.2 million, versus estimates of $498.8 million.
Analysts, however, expect pent-up demand and strong household savings to help the cruise industry recover. Royal Caribbean said Friday that booking volumes improved after the Delta variant had caused a slowdown over the summer.
Royal Caribbean, which became the first major cruise operator to resume operations from U.S. ports in June, said departures for 2022 are booked within historic ranges and pricing remains strong year-round.
“As cases have come down, demand has come back up. Consumers are showing their resilience and desire to go on vacation,” said CFO Jason Liberty.
Shares were down 1% in premarket trading.