Royal Caribbean stocks jumped on Monday after executives touted their ticket sales for cruises in 2021.
The cruise line reported a 10 percent increase in shares after Royal Caribbean officials reported that bookings for international cruises were in demand, CNBC reported.
Executives in a conference call with analysts said the cruise bookings come even though the line lost $1.6 billion in the second quarter and has reached a cash burn rate of between $250 million and $290 million per month.
“I think we are seeing that there is a pent-up demand. People are frustrated being at home and being isolated,” CEO Richard Fain told CNBC’s “Squawk on the Street.”
Royal Caribbean reported a low of $19.25 per share in March but has now reached more than $57 per share as of Monday. Its highest this year was recorded in January at $135.32 per share.
Royal Caribbean CFO Jason Liberty said on the conference call that several of the bookings were for rescheduled cruises canceled this year but that “more than 60 percent of our bookings received since mid-May have been new bookings,” according to CNBC.
Still, the cruise line is dealing with a universal hit to the travel industry, as restrictions have limited international movement. Royal Caribbean’s reported loss was still worse than Wall Street predictions, as experts had predicted a loss of $4.82 per share instead of the actual $6.13, The Associated Press reported.
Cruise lines stopped sailing about five months ago after several ships ended up having to quarantine passengers and crew because some became sick on board. Many of the lines had initially postponed cruises until mid-April, but that timeline for most has been pushed to at least Oct. 31.
Michael Bayley, CEO of subsidiary Royal Caribbean International, said on the call that the company may launch cruises in China or Australia before the end of October but didn’t make any firm commitments, CNBC reported.
Royal Caribbean has partnered with Norwegian Cruise Line to create the “Healthy to Sail Alliance,” a group that aims to achieve government approval to safely return to sailing. But Royal Caribbean executives said its financials were strong and it has liquidity to endure a time with low to no revenue.