Terrorism Takes Estimated $20 Million Toll on Royal Caribbean's Financials

Richard Fain, Chairman and CEO of Royal Caribbean Cruises Ltd. today provided his comments and insight on the current situation and how it has impacted the company's operations.

"We are devastated by the losses that so many of our fellow Americans have suffered," Fain said.

"While it is hard to focus on business as usual, we know that it is important to do so, and we are determined to do just that.

"I know the business community would like to know what these events mean to our company. While it is obvious that the world is a very different place than it was a week ago, it's hard for us to fully assess what this means to our company.

Nevertheless, we can provide some preliminary information that we hope is helpful.

"The biggest immediate challenge we have faced has been with air transportation. With the closure of the nation's airports, there were many difficulties in getting our guests to and from the ships over the past week. We were moved by the determination of some of our guests to get to their ships. Some people drove (as much as 3,500 miles), and we were eventually able to find flights for many of the rest. Despite the transportation challenges, we had more than 30,000 guests embark on our ships for cruise vacations over the last several days. These sailings were about two-thirds full. Those ships that operate in heavy drive-in markets operated at close to 90 percent occupancy. With the return of air transportation, we expect this week to be much better and are already seeing this with those ships that have embarkation today.

"It will take us some time to figure out the total financial impact of these events, but we have some preliminary figures for the past week. The biggest cost was loss of revenue, but we also had extra security costs, lodging and transportation costs, etc. Our best guess at the moment is that the financial impact for the week following September 11 will be in the range of $20 million to $25 million. We will provide additional guidance on the financial impact going forward as more information becomes available.