Royal Caribbean CEO Fain praises CDC’s new manner of resuming US cruises

Royal Caribbean CEO Richard Fain on Thursday hailed the Centers for Disease Control and Prevention’s updated coronavirus guidelines for resuming cruises from U.S. ports.

“We’re really very pleased and very excited because it really is an avenue that we believe is achievable, practical and safe,” Fain said on CNBC’s “Squawk on the Street.”

When asked if the CDC guidelines mean Royal Caribbean and other cruise lines will be sailing out of the US again this summer, Fain replied, “I think it can be.”

In a letter to industry on Wednesday, a CDC official said cruise “will never be a risk-free activity” but that the health department is “obliged” to resume passenger operations in the US by midsummer.

The industry has been pressuring the Biden government and CDC for months to provide more specific information on the way back from American ports. The state of Florida also sued federal agencies earlier this month over the cruise stop.

While cruises resumed elsewhere in the world, they have been halted in the US since March 2020 due to coronavirus concerns. In the early days of the global health crisis, there were high-profile Covid outbreaks on ships.

One of the key components of the CDC’s new guidelines is the vaccination rate for passengers and crew. In order to resume sailing, the CDC had previously stated that cruise lines would have to take a simulated trip to demonstrate their Covid safety protocols. However, the CDC now says the test trip can be skipped if a ship shows that 95% of its passengers and 98% of its crew have been fully vaccinated against Covid. This is probably the easiest way to get back to the water.

“Eighty percent of our guests already say they intend to get the vaccines regardless. One way or another, we think this is one route – two routes in fact,” Fain said, referring to the simulated cruise option . Either way, he added, “are feasible until July, so yes, feel no pain today.”

The CDC also announced that it will change the testing and quarantine requirements related to the restart of sailing to align with the agency’s latest guidelines on vaccinated and unvaccinated individuals.

Experts say a labor shortage could challenge the industry as cruise companies try to speed up trips over the months. Approximately 15% of the occupation are from India, a country struggling with a terrible surge in Covid. Fain told CNBC that he currently does not see a coronavirus situation in India leading to a staff shortage, but admitted that it will increase the challenge.

Earlier this year, Fain told CNBC that Royal Caribbean was surprised by the strength of its early booking dates. “Some of the things we thought [were] will not happen. You are better than we thought, “he said in late February.

Royal Caribbean shares fell 2.8% Thursday afternoon, giving up earlier gains at the session. Competitive cruise line Carnival’s shares were 1% lower, while Norwegian Cruise Line’s shares were slightly higher. All cruise stocks rose double-digit percentage points in 2021 as investors shopped in hopes of U.S. cruise resumption.

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