Fain Sees Post-Hurricane Booking Bounce-Back As Cultural Change
Bruce Parkinson, Open Jaw
It's no longer news that during and even soon after the recent horrific hurricane period, Caribbean bookings dropped precipitously. "None of that is surprising," said Royal Caribbean Cruises Ltd. Chairman/CEO Richard Fain to financial analysts Tuesday morning. "But what is surprising is how quickly our bookings in the period recovered."
"The drop-off in bookings was very rapid, but the recovery was also rapid. Today, virtually all our bookings in the region are back to pre-storm levels."
This pattern of rapid recovery has implications well beyond just these storms.
"We believe that this unusually fast recovery may actually be a reflection of an important cultural change," Fain said. "We've noticed a significant change in the way people in general seem to respond to unusual events, whether those events are weather, political acts or something else."
Then & Now
Years ago, a negative incident would have a strong and lasting impact. "Whenever something happened, our bookings would fall and they would stay down for an extended period,” recalled Fain. “People seemed to curl up in a ball and obsess about whatever the issue was."
It could and it did impact bookings for a really long time. "Even after the event left the front page, people would persist in focusing on it," he said. "Eventually, they would move on and bookings would recover, but that process seemed to take forever."
Things appear to be different now.
"More recently, we've seen a much more sanguine response," continued Fain. "Instead of the incident lingering for a long time, the recovery seems much quicker. People seem to be more apt today to see such events as ordinary, with little impact."
Societal & Commerce Issues
It's not that the events are considered normal, but they are seen as less relevant to the broader audience. "In effect, the public appears to become inured to such one-off events,” he contended. “They're still interested in the event, and concerned about it, but people seem to continue living their lives with less change. They move on."
From a societal point of view, Fain says it's discouraging that we have reached such a point. "It's distressing that the incidents are now so common that society seems to have formed a thicker skin towards them."
On the other hand, as a response to the actual events, it's probably more constructive if society doesn't allow such things to interfere with its normal day-to-day existence. "From a purely commercial point of view, this cultural shift is very helpful," said Fain.
Against this background, Fain said he is extremely pleased and frankly a little surprised that Royal is still able to stay within its earnings per share guidance for the year.
He specifically cited the travel agent community as being a very positive force in speeding the recovery. "They can get the word out better than anyone else and they have done so yet again here."
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.