Royal Caribbean announces three China sailings cancelled due to coronavirus outbreak

Royal Caribbean released a statement today on the current coronavirus outbreak and its impact on the cruise business.

Three Spectrum of the Seas sailings have now been cancelled through February 8th, which is the only ship homeported in China at the moment by Royal Caribbean.

As has been widely reported, China has moved aggressively to contain the spread of the virus.  As a result of these measures, and after consultation with national and local health authorities, the company has cancelled three sailings through Feb 8th, on the high yielding Spectrum of the Seas, currently its only ship homeported in China.  The company estimates that this (which included the Chinese new year's cruises) will impact 2020 financial results by approximately $0.10 per share.  If the travel restrictions in China continue until the end of February, the company estimates that this would further impact its results by an additional $0.10 per share.

There are still too many variables and uncertainties regarding this outbreak to calculate the overall impact on the business.  For example, we expect an erosion of consumer confidence in China could have an additional impact on load factor and rate in the region until the market normalizes.  If these travel restrictions continue for an extended period of time, they could have a material impact on the overall financial performance of the company.

For the winter sailing season, the company only has one ship based in China; two additional ships are scheduled to join in May and July 2020, respectively.  For all of 2020, China represents about 6% of the company's capacity.