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Royal Caribbean’s (RCL) Working On New Quantum Ultra-Class Ship, Will Be Beneficial Post-Pandemic

The Royal Caribbean Group (RCL) cruise operator is finalizing a new Odyssey of the Seas liner, its second Quantum Ultra-Class ship, which could start operating in November 2021. After Royal Caribbean returns to regular operations, a more modern vessel may be an additional growth engine.

Royal Caribbean, as a major part of the tourism sector, was forced to suspend operations due to the COVID-19 pandemic. The company looked for opportunities to restart operations, implement new safety standards and enforce some restrictions during this time.

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Royal Caribbean’s shares have risen about 7% in price in recent weeks, as many biotech firms have announced the imminent arrival of a coronavirus vaccine. This is supposed to slow down the pandemic and restore a significant proportion of social life, including cruises. A return to previous volumes is not going to happen immediately, but it will slow down the losses of Royal Caribbean. The business itself however, assesses the outlook for the coming year favorably and states that the number of bookings is still high. A function is also played by the deferred demand created during the months of the pandemic. Actually, just 40 percent of next year’s Royal Caribbean bookings are from visitors whose cruises were cancelled because of COVID-19. The remaining 60% of orders originate from new customers.

Against this backdrop, additional good news for Royal Caribbean is the announcement of the latest Odyssey of the Seas liner. The new vessel is fitted with pools, leisure rooms, cinemas, areas for video games and many others.

For passengers, the ship may become an extra “magnet” and have a quicker recovery in sales. The initial capacity of the liner is 5,000 passengers, but cruise companies may enforce some restrictions even after the end of the pandemic, so the final capacity will become apparent after voyages are resumed.

Odyssey of the Seas will first depart from Rome in April 2021, but from November 2021 it will start operating from the proposed permanent home port of Florida.

Royal Caribbean received a $700 million additional loan from Morgan Stanley in the summer. This will provide the firm with extra support before it can return to full-time operation.

Royal Caribbean Group (RCL) stock was worth $76.46 at close of the trading on December 11.

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