Royal Caribbean (RCL) Q4 2020 Earnings Call Transcript

Royal Caribbean (RCL 0.04%)
Q4 2020 Earnings Call
Feb 22, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning. My name is Shelby and I'll be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Group's business update and fourth-quarter 2020 earnings call. [Operator instructions] After the speaker presentation, there will be a question-and-answer session.

[Operator instructions] I would now like to introduce chief financial officer, Mr. Jason Liberty. Mr. Liberty, the floor is yours.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Thank you, Shelby. Good morning, everybody, and thank you for joining us today for our business update and fourth-quarter earnings call. Joining me are Richard Fain, our chairman and chief executive officer; Michael Bayley, president and CEO of Royal Caribbean International; and Carola Mengolini, our vice president of investor relations. During this call, we will be referring to a few slides which have been posted on our investor website, www.rclinvestor.com.

Before we get started, I would like to refer you to our notice about forward-looking statements, which is on our first slide. During this call, we will be making comments that are forward-looking. These statements do not guarantee future performance and do involve risk and uncertainties. Examples are described in our SEC filings and other disclosures.

Please note that we do not undertake to update the information in our filings as circumstances change. Also, we will be discussing certain non-GAAP financial measures, which are adjusted as defined, and a reconciliation of all non-GAAP historical items can be found on our website. Richard will begin by providing a strategic overview of the business. I will follow up with a recap of our fourth-quarter and full-year 2020 results.

I will then provide an update on our latest liquidity action and on the booking environment. We will then open up the call for your questions. Richard.

Richard Fain -- Chairman and Chief Executive Officer

Thanks, Jason, and good morning, everyone. Even though it's late February, I still want to say Happy New Year because I expect that this year will be so much better in so many ways than the last year. At the same time, it's hard to believe that we're only seven weeks into 2021 because so much has already happened. It's been very intense for the last month and a half.

And because things are happening so quickly, I think it's a good time to take a moment to review what we at the Royal Caribbean Group have been doing over the past year to adjust to the realities of the pandemic in the United States and wherever we sail and wherever we operate around the world. As we've summarized on Slide 2, 2020 was an unprecedented year in which our teams took on and accomplished actions that were unthinkable just 12 months ago. I think that there was not one job that stayed the same. In a few months, our teams moved our whole fleet into layup, repatriated more than 45,000 crew members to their hundreds of home countries, restructure our workforce, implementing new credit programs for our guests, took care of our travel agents, and raised billions of dollars in new capital, all while working from home.

It's been incredibly challenging, but everybody seems to rise to the occasion. Now, the most important point to keep in mind is that while most of our ships are still sitting idle and while we've suspended most of our global operations through April, at least through April, our company has also been moving ahead to create the conditions and to prepare for a healthy return to sailing. As we continue to navigate this crisis, we've made continued progress on many fronts as noted on Slide 3. I want to especially speak about how we're engaging with various stakeholders, particularly governments and other actors, in the travel industry to ensure that we can ramp up and restart quickly.

I'll let Jason talk about the initiatives that we've taken on the finance side. First, let me recall what we've accomplished with our Healthy Sail Panel of medical, public health, maritime, biosecurity, and other experts. We've taken their 74 recommendations for a healthy return to service as the basis for over 2,000 separate protocols, from passenger testing before sailing to physical distancing on board, the disembarkation of coma -- COVID symptomatic persons. All of these things will give our guests, our crew, and the destinations the confidence that the environment on the Royal Caribbean, Celebrity, Silversea, or TUI ship is safer than a walk down mine -- main street.

We know that we not only need to provide an environment that protects our guests from COVID but also works to protect all of our people from having their vacations disrupted due to an isolated case. At the same time, we have to recognize that the panel's recommendations were -- were intended to address a pre-vaccine environment. A lot has occurred over the last four months since their report was submitted, not the least of which is that we're regularly vaccinating over a million and a half people a day here in the United States and many elsewhere as well. And so we continue to work with the panel led by Governor Mike Leavitt and Dr.

Scott Gottlieb to identify the safest pathway forward in the new post-vaccine environment when we can protect our guests and crew as never before. And these conversations and the conclusions we draw from them will inform and advance our dialogue with governments around the world, including the CDC under its new leadership. At the same time, I believe strongly in the power of positive example. And in Singapore, we have a good one on how we can safely resume cruising while giving our guests the fun-filled experience they expect.

We've been operating there since early December. And even before that, we've had successful operations which continue now in Germany and Canary Islands, Greece, and the Middle East. These early return to service not only provide vacations, but they provide an opportunity to demonstrate proof of concept as well. These early cruises provide valuable information about the best way to design and implement our health and safety protocols.

They provide important learnings on how we can coordinate most effectively with governments, port authorities, travel partners, and others to protect our guests, crew, and the destinations we visit. These early cruises have also given us the opportunity to design new attractive itineraries where we can better control the experience. Now, after 11 months of pandemic, I think we all know that COVID fatigue is real. People are clamoring for the opportunity to have experience outside their house.

Every day, we see signs of people want to get out and get away. And once we're able to reopen and restart more broadly, we'll be ready to -- to respond with our best of class hardware, including our new buildings, Odyssey of the Seas, Celebrity Apex, and Silver Moon, and our exclusive private destinations like Perfect Day at CocoCay. Before I hand it off to Jason, I do want to brag on our team just a little bit. Again, the dedication, commitment, and the integrity of our employees throughout this very difficult period has been exceptional, and their individual and combined contributions have been extraordinary.

I am impressed every day by what they do. I also want to give a shout-out to our loyal and committed travel partners for their ongoing support and to our investors for their trust. So thank you all. And now, I'd like to turn it back over to Jason.

Jason.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Thank you, Richard. This morning, we reported an adjusted net loss of $1.1 billion for the fourth quarter of 2020 and $3.9 billion for the full year. Due to the suspension of our global operations, we were able to operate only 20% of the revenue cruises initially expected in our February 2020 guidance. This simple stat reflects the staggering impact that the pandemic brought to our company and the whole industry during 2020.

In the fourth quarter, we were able to reduce our quarterly cruise operating expenses by more than 80%, from $1.5 billion in Q4 2019 to $265 million in Q4 of 2020. We achieved this by expeditiously laying off our fleet and be -- becoming extremely diligent, disciplined, and agile in controlling our costs. Something similar can be said about our general capex, which we-were reduced by approximately 55% between 2020 and 2021. I am incredibly grateful of the efforts from the entire corporation in managing through the toughest year in our history.

From a financial standpoint, our top priority remains ensuring that we are in a strong liquidity position. While reducing our cash burn was and still is critical, another crucial liquidity action is accessing capital prudently and opportunistically while also managing our liabilities and our banking partners -- with our banking partners and export credit agencies. Since we suspended our global cruise operations, we have raised about $9.3 billion in new capital and have secured agreements to defer almost two -- $2 billion of ship-related debt through the spring of 2022. These later efforts are reducing our expected debt maturities for 2021 to approximately $400 million.

These successful transactions in negotiations were possible due to the strength of our brands, the relevancy of our products, and the great relationships that were built during decades of collaborative work with banks, shipyards, and vendors. I also want to highlight that this superb outcome was a huge undertaking executed by our amazing finance, legal, and accounting teams. Now, regarding our current liquidity position, we closed the -- we closed 2020 fiscal year with $4.4 billion in available liquidity. We remained focused on further improving this position while also managing our -- our operating and capital expenditures to ensure that our family and brands are well-positioned for the return to service.

I will stress that as we return to service and stabilize our operations, our -- our cash flow will be primarily driven -- our cash will be the primary driver to delever our balance sheet, return to investment grade, and create great shareholder value. As it pertains to our cash spend for the fourth quarter or during the fourth quarter, we spent approximately $1.3 billion, which includes the payment of approximately $300 million of bond that matured in November, and approximately $180 million from collateral postings, commissions, and financing fees. When excluding these, our average cash burn rate was on the lower end of our previously announced range, driven by the phenomenal diligence of our teams and some timing. Furthermore, this morning, we reaffirmed that the cash burn will be on average in the range of approx me $250 million to $290 million per month during a prolonged suspension of operations.

Over the last year, we have executed several measures to structurally reduce our cost base, realign our capital allocation, and improve our scale and margins. Besides reducing our G&A -- G&A expenses and streamlining procurement efforts, we successfully divested three of our oldest ships and entered into a definitive agreement to sell our Azamara brand. Reshaping our fleet efficiency and the corporation cost structure will help accelerate our margins by improving our operating leverage as we return to service. I will highlight them when we return to service and start to rev up our sales.

We expect that customer deposits and cash flows from operations will further improve our cash position. At the same time, ramping up our business will also include start-up costs that relate to crewing our ship -- crewing our ships, health and safety protocols, and increased sales and marketing activities. Because the environment is still very fluid, we are not able to provide further guidance or commentary on these figures. I will now provide an update on the booking environment and our capacity.

While bookings remain below historical levels, we have been constantly impressed and humbled with the number of cruises booked throughout this extended public service period. It's clear that a lot of people want to cruise, and we can't wait to welcome them back on board our amazing brands and ships. Clearly, 2021 is not going to be a traditional year. And to this end, we did not plan for a traditional wave season.

And therefore, our sales and marketing activities still remain anemic and extremely strategic. Currently, we don't expect to broadly ramp up our marketing until more ships come back into operation. Despite the lack of marketing spend, we have seen a 30% increase in new bookings since the beginning of the year when compared to November and December. Our Lift & Shift and Future Cruise Credit programs have been very successful in both preserving cash and driving demand for future periods.

Having said this, I will highlight that from a cumulative standpoint, almost 75% of our book business is new and not related to rebooking activities. The cumulative book position for sailings in the second half of 2021 is aligned with our expectations in terms of resumption of cruising with pricing higher than 2019, both including and excluding the dilutive impact of Future Cruise Credits. It is probably too early in the booking window to talk too much about 2022, but behavior to date is quite similar to booking activities in previous years. Our booked position for the first half of 2022 is within historical ranges at higher average prices.

As I noted, we are not expecting a traditional wave season. However, we did see a similar increase in 2022 bookings over the past six weeks to increases seen in prior years. We think that this is a very -- that this is very encouraging stat given our muted sales and marketing efforts. Regarding our deployment, we are not ready to announce any specific surrounding the cadence with which we will be bringing our fleet back into service.

Currently, we have canceled sailings on most of our ships through the end of April. Our brands operate in multiple markets around the globe, therefore, the timing and pace of the ramp-up in capacity will likely vary by region based on local conditions. We are already operating Quantum of the Seas in Singapore, and our second ship in the water could also be outside of the U.S. We're also u -- using the learnings from Singapore, as well as from our TUI Cruises joint venture, who has had ships sailing in Europe and the Canary Islands since August and November, which is helping us in -- in -- inform on how -- how -- how -- how the ships will return to service.

Our customer deposit balance at the end of December 2020 was $1.8 billion. This is relatively equal to the balances reported both at the end of September and at the end of June. We were able to maintain a similar customer deposit balance for six months despite the suspension of approximately 1,100 sailings because of the deposits collected on new bookings and the success of our Future Cruise certificates and Lift & Shift options. Just over half the guests who booked -- who were booked on canceled sailings have requested a cash refund.

With the other half either holding an FCC or lifting and shifting their booking to a future cruise. Also, approximately half of our customer deposit balance is associated with FCCs. And moreover, about 30% of the overall balance is non-refundable. As it pertains to our expectations for 2021, I will note that the timing and trajectory of the recovery remain uncertain, and we are, therefore, unable to provide further guidance for the year.

We do expect, however, to incur a net loss on both the U.S. GAAP and an adjusted basis for the first quarter and the full year of 2021. The magnitude of loss will depend on many factors, including the timing and extent of our return to service. I will close my remarks by saying that we are clearly focused on what we can control.

But as the vaccine distribution continues to accelerate, travel restrictions and advisories begin to ease, and customer confidence begins to grow. We feel very optimistic about the future. With that, I will ask our operator to open up the call for a question-and-answer session. Shelby.

Questions & Answers:

Operator

[Operator instructions] We'll pause for just a moment to compile the Q&A roster. Your first question is from Robin Farley of UBS.

Robin Farley -- UBS -- Analyst

Great. Thank you for taking the question. I know it's very difficult to get any visibility on the timing of a restart. I wonder if you could tell us when you mentioned your -- your fuel hedges, you talked about your adjusting it for forecasted fuel consumption.

I wonder if you could kind of tell us what you're roughly thinking about for your fuel consumption as a way to sort of help us think about what -- what that would look like versus a normal year? And then also specifically sort of related to Alaska too, I'm wondering if your fuel consumption assumptions for -- for that market too? Thank you.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Well, thanks, Robin. And -- and by the way, that's -- that's a -- that's a very interesting angle in trying to get us to provide how many ships are we expect to have up and running in -- on the water. So -- on -- on the fuel consumption side, just like everything else, it's -- it's very fluid and -- and -- and will be based off on the timing on when we go back into service. So I don't have a specific number to guide you to, though it was a creative way to ask it.

But yeah, we are -- we'll disclose that as we know what the deployment will look like specifically and -- and the ships that will come up and running.

Robin Farley -- UBS -- Analyst

OK. All right. Maybe then just as a follow-up since I -- I don't get my -- my first one. Just -- just a clarification, in -- in the release when you talked about the second half of '21 pricing, you said it's higher than 2019.

And I just wanted to clarify, was that higher than second half of 2019? It doesn't specifically say that. Or did you just mean higher than 2019 overall? Because obviously, it has a little bit of a different meaning.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yeah, when we were specific around that to the overall 2019, but it's a similar answer for the back half of '19.

Robin Farley -- UBS -- Analyst

So in other words, se -- second half '21 pricing is above second half '19 specifically both with and without the Future Cruise Credit?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

That's -- that's correct.

Robin Farley -- UBS -- Analyst

Great, because that's an improvement I think since -- since your last quarterly call. So, OK, great. I will --

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Well, yeah. Yeah, a little bit more. But I -- I mean we're -- we're very as we -- as we said before, I mean we are -- there -- there is clear demand. And as we look at 2021 based off the different scenarios we have in terms of resumption of service, the -- the -- the volumes that we see on a demand standpoint are -- are -- I mean in our -- in our perspective are impressive.

Robin Farley -- UBS -- Analyst

OK, great. And I'll hop back in line. I've got more questions, but I will -- I'll get back in line. Thanks.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

All right. Thank you, Robin.

Operator

Your next question is from Steve Wieczynski with Stifel.

Steve Wieczynski -- Stifel Financial Corp -- Analyst

Hey guys, good morning. So -- so Jason, I guess the first question would be around the -- the first half '22 booking commentary. I'm not sure the -- the right to ask this question but can you help us think about how much of your -- your first half '22 inventory is -- is currently open for sale? And you know, I don't know if that is a hundred percent or if it's 50% or whatever that number is, but I'm trying to really understand that pricing comparison relative to -- to '19. I think there's some confusion out there with investors about what that -- you know, what that looks like actually on a -- on a pure like-for-like basis.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yeah. Well, look, most of our deployment is open before the first half of 2022. Now, it is very early here in the -- in the bookings stage and we're, you know, we're sitting here in the first quarter of -- of 2021. And historically, we don't really talk about 2022 but, you know, what we're seeing continue on is -- is our customers.

There's a lot of pent-up demand for vacations, right? You know, they're saving more, they -- they -- they bypassed many of their vacations. And so, you know, they're -- they're trying to eye out when -- when we're going to return to service and they're going to be able to -- to go and enjoy the vacations that they -- that they had previously planned. And so, I think, when you look at the first half and 2022, again, it's very, very early. The pricing that we're seeing relative to, you know, like for like the ninth -- for 19 shows that are -- that are -- that are our APDs are up with or without any application of future cruise certificates.

Steve Wieczynski -- Stifel Financial Corp -- Analyst

OK. Understood. And then, the second question, I guess, would be around your -- your liquidity position which, you know, again, right now still looks pretty solid on paper. But you know, Ja -- you -- you made somewhat of a comment, at least I think you did, it says, you know, you're still looking at a kind of -- or you're taking proactive steps.

So, just trying to understand, you know, what those steps could mean moving forward and, you know, kind of are you still evaluating any option possible out there, you know, over the near term?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yeah. Well, first off, we have a lot of options. You know, so, it's not just, you know, some options. We have a very full quiver of options both in the capital market and even non-capital market activities whether, you know, we still have a lot we can access as -- as relates to our debt baskets.

Obviously, we can access equity and -- and other instruments but we are and we have been extremely methodical about our capital raises. Some of it's based on the operating landscape some of it is being opportunistic and seeing how we -- how we can, you know, you -- you continue to focus on the balance sheet. But we will, you know, just continue to evaluate the situation and -- and based on that. We will, you know, we'll look to continue to be in a strong liquidity position so that as we return out of this, you know, our business can accelerate.

Steve Wieczynski -- Stifel Financial Corp -- Analyst

OK. Got you. Thanks, guys. Appreciate it.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Thanks, Steve.

Operator

Your next question is from James Hardiman of Wedbush.

James Hardiman -- Wedbush Securities -- Analyst

Hi, good morning. So, two questions for me. I think you've guys talked about on -- in -- in the prepared remarks just how much time was spent by the Healthy Sail Panel trying to figure out how to sail in sort of a pre-vaccine world. Obviously, that's no longer the world in which we live in.

So, I'm -- I'm just trying to figure out how the -- the crew's experience is. What is going to look like in 2021 and maybe beyond? So, I guess, for starters, the -- the whole notion of a vaccine requirement onboard -- some ships onboard -- all ships, maybe speak to that. And -- and maybe the CDC is willing to -- to let some ships sail earlier if, you know, you have a critical mass of people that have already been vaccinated.

Richard Fain -- Chairman and Chief Executive Officer

I'll -- I'll answer that. You're -- you're right, the Healthy Sail Panel's work and all of those discussions were pre-vaccine and vaccine really does change it. We're really in an interim period where the vaccines are still relatively new. They're coming out amazingly quickly but it still is going to take months to get huge numbers of people vaccinated.

And so, we and the CDC and governments around the world are looking at how that would change it. And we don't have answers yet. I think one of the things everybody's looking to see is just how effective the vaccines are and people actually want to see that happening. And one of the nice things we have is we can look at the example of Israel where the vaccination level is one of the highest in the world.

And therefore, they're able to make some very significant statistical correlations. And one of the things that you've seen coming out of there, for example, is that the -- the number of people who get the disease who have been vaccinated is the efficacy is as high or higher than the -- than the trials that were done. And this is now on larger numbers of people so it makes it even more reliable. But more significantly, they're also saying the ability to prevent the disease from being serious in people is even better than that.

So, these are in the -- in the history of vaccines in the world. These are really exciting kinds of levels that give us all a lot of hope. But we really need to see it in practice. And it's really hard to say, wow, we're not yet at the point where there are enough people who have vaccinated that you could say, OK, you know, everybody on board will have a vaccine, that sort of thing.

But it is something, we think, that the vaccine is of course the ultimate weapon. And the fact that it is coming out and beginning to come out so quickly and that -- that -- that a phase of that is growing will be a basis for a new set of -- of approaches. But we haven't -- not that we know the governments around the world nor the Health Sail Panel has yet been able to define exactly what that will look like.

James Hardiman -- Wedbush Securities -- Analyst

Got it. That's helpful. And then, my second question is maybe for Jason. I'm -- I'm trying to wrap my head around sort of the new revenue and margin profile of your -- of your post-pandemic fleet.

Obviously, you've gotten rid of quite a few ships. And so, I don't know the best way to frame it, whether it be to talk about what -- what the yields and or margins were on the ships that you got rid of or just looking back to sort of pre-pandemic margin levels of call it 19% or 20% and sort of order of magnitude what those could look like once we're back to quote-unquote normal but with a -- with a significantly newer and -- and presumably more profitable fleet.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yeah. Well, and I -- I do appreciate the challenge, James, because we, you know, we obviously -- it's still too early for us to kind of talk about what margins will look like as we come out. You know, the -- the sale of Azamara, you know, we've -- we've sold some of our older tonnages, you know, the net of that is will be -- it's -- it's a -- it's a very slight good guy on a yield standpoint. It would be a good guy on the cost standpoint because, you know, their ships were smaller for spreading -- the spreading of costs were -- were not as efficient.

But you know, as an organization we have and we continue to take, you know, take advantage of this opportunity to, you know, analyze our costs and -- and find ways to be more efficient. So, when as we come out of this, we have the ability to add onto those margins. It's -- it's still too early to talk specifically about how much that will be. But you know, we're, you know, we're trying as I kind of describe what our goal is to kind of be in our -- in our -- our wedding weight as -- as we come out of this and -- and then accelerates as we -- as we move back into service.

James Hardiman -- Wedbush Securities -- Analyst

Got it. And just -- just to clarify, you called that a couple good guys. There aren't any bad guys we should be thinking about in -- in terms of the margin in a post-pandemic world, correct?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yeah. I mean, I don't -- I don't think there are necessarily bad guys. Obviously, we will have return to service costs here as we ramp ourselves up, which could just make it look a little bumpy in the beginning. I also think it's important to note that besides for the ships that we have sold or the -- or the brand that we have sold, we also have incredible new tonnage that is coming in -- into the -- our -- our fleet.

And so, as we know, those ships are the inventory mixes better. They're much more cost-efficient from a fuel perspective and they deliver higher margins. And so, you know, all the ships in which Richard had noted that are coming in here in the next couple of years plus what we have on order, will also help us expand our margins further.

James Hardiman -- Wedbush Securities -- Analyst

Got it. Thanks, Jason. Thanks, Richard.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Thanks, James

Operator

Your next question is from Brandt Montour of J.P. Morgan.

Brandt Montour -- J.P. Morgan -- Analyst

Good morning, everyone. Thanks for taking my questions. I wanted to -- to talk about as more quickly -- hoping you could give us some comments around the process there as if it was competitive and -- and how long you've been working on it. And then -- and then, shifting gears to maybe additional ship sales, what are the different factors you're assessing for potential future ship divestitures? And -- and sort of what are the flexibilities you have around that in your existing credit agreements?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yeah, sure. So, on the -- on the Azamara sale, you know, it's really kind of through this whole process. You know, we have -- we have really tried to be opportunistic and strategic and look at as we -- as we are today and as we will come out of this. How do we want to prioritize, you know, where you know, whether it's how we're investing or how we're supporting on our resource base.

Missed opportunity came our way here with Sycamore, it gives Azamara an opportunity to grow and -- and, I think, that it's a great brand that we think, you know, we'll -- we'll do quite well under its other -- other -- this other venture. I think, moving into, you know, other ship sales and so forth, we remain opportunistic. I think we need to remember that pre-pandemic, all of these ships generated quite a bit of cash flow and so, you know, it need -- for us, typically, the -- the tests on -- on a ship is a little bit less a -- it's a little bit less about the cash that we would receive, it's more strategic on whether we think this ship with whether it's in its current state or through some moderate investment is something that fits our brands or could fit another brand within our -- within our -- our organization or -- or even with our GMV. And that's -- that's kind of how we look at it and I think we'll remain opportunistic.

Brandt Montour -- J.P. Morgan -- Analyst

OK. Thanks for that, Jason. And then, if I could just sit one more in here. For this summer in Europe, where, you know, I assume you don't need CDC certification to sale but presumably, you know, a decent portion of your guests are coming from the U.S.

and would have to -- would have to fly over. I guess, maybe just as things stand today for the summer sailing in the Med, could you just reframe maybe the range of scenarios that could -- that could happen -- that could play out there.

Michael Bayley -- President and Chief Executive Officer

Hi, Brandt, it's Michael. Yeah. I mean, technically, the -- our operations in Europe are not subject to the CDC jurisdiction but, I think, it's fair to say there's an awful lot of Americans who do fly out to Europe to join our European products, particularly for royal and celebrity. So, nevertheless, we'll be guided by the protocols either through the healthy sail panel or as they come from the European Union or the U.K.

So, we know that the operations in some of the European countries particularly Germany, Italy, have been ongoing for the past couple of months and the Canary Islands. And those protocols that have government operations have basically been based on the Healthy Sail Panel or the -- or the clear member policies and then overlaid with specific instructions by the National Health Authority. I think what we're going to see is very similar to what we're going to see in the United States which is as we continue to see infections decline and vaccines increase, then we're going to move to protocols that probably are some kind of hybrid between vaccines and testing. We are fortunate in a way that we're coming through the winter season so it's incredibly low in terms of volume and revenue during the winter.

But we're entering into the spring and for the Royal Caribbean Group, we have multiple ships that are currently deployed in the -- into our European operations. So, it's going to be subject to guidance from the EU -- the European Union or the U.K. authorities and we -- we imagine that there'll be very similar to the guidelines that we'll get from the CDC. Does that -- does that help or do you need more -- more color on that?

Brandt Montour -- J.P. Morgan -- Analyst

If you wanted to provide more -- no, that would -- that's very helpful. I appreciate it.

Michael Bayley -- President and Chief Executive Officer

OK. Thank you.

Operator

Your next -- your next question is from Jaime Katz of Morningstar

Jaime Katz -- Morningstar -- Analyst

Hi, good morning. Thanks for taking my questions. I guess I'd be curious to hear what changes maybe have been made to Quantum that we can implement domestically that -- that might surface when the start sale begins. And then, additionally, is there something that you guys are doing differently and maybe just sort of geographically different that leads you to believe that May 1 is a better start sale date than June 1 which Norwegians have put out there? Thanks.

Michael Bayley -- President and Chief Executive Officer

Hi, Jamie, it's Michael. As Richard commented in his opening comments we're really pleased with the performance of Quantum in Singapore. It's being an incredible learning experience for our company and it's been a remarkable example of great collaboration between a, you know, cruise company and the Health Ministry and the government of Singapore. So, we've been operating now for close to three months.

We've carried probably around 35,000 Singaporeans on ocean cruises. The customer satisfaction, ironically, is higher with our protocols than it was before our protocols which is -- which is quite -- quite funny in a way. And our revenue has exceeded our expectations both from a ticket and an onboard revenue perspective. So, the overall performance of our products has been really quite strong.

It's subject to a series of protocols that as you -- as you question are probably very similar to the framework that we may be operating with in the future out of the U.S. or Europe, but it's a changing landscape. So, what we've started within Singapore in terms of protocols already being reviewed and there's in the coming weeks we expect some of those protocols to be changed. For example, load factor constraint at the beginning of our Singapore operations was capped at 50%.

We're now in discussions about increasing that cap to 65% in the coming weeks and some of the testing regimes have changed. So, one of the things that have come from Quantum -- well two things, one is that operationally we've really begun to understand how we can work together with the Health Ministry to safely operate a large cruise ship during the COVID times. And we've also gained from our investment in technology. So, there are two technologies that have come from Quantum that really are game-changing.

One is e-mustering which completely transforms the whole process of lifeboat mustering and it's all done digitally through -- through your iPhone or an app. And the second is we've really developed technology for contact tracing using a combination of technologies. One of them is a trade slip which basically each gas wears and can tell exactly how long they've been in contact with everybody else who's wearing a trace slip. And then, we have artificial intelligence connected into basically CCTV cameras that use facial and body recognition to then double-check and verify contact tracing in the event that somebody did have COVID onboard the ship.

We've been fortunate that that hasn't happened. But that technology development is really, we think, groundbreaking and very sophisticated, and in our conversations that we had the week before last with the CDC, they specifically asked us to share that technology and what -- what we've been doing in Singapore with them, which we've subsequently done. So, there's a lot of lessons being learned, and I think -- I think, ultimately, it will create a foundation for how we will operate. But -- but, again, the landscape's changing quite significantly as well with the -- with the vaccines and the infection rate.

Thank you, Jaime.

Jaime Katz -- Morningstar -- Analyst

Thank you.

Operator

Your next question is from Stephen Grambling of Goldman Sachs.

Stephen Grambling -- Goldman Sachs -- Analyst

Hi, thanks. Press. And this is in the intro. But as you've seen an improvement in the mix of new bookings, can you comment on what the -- the demographics of the new bookings look like versus history as you've been marketing less? In other words, are you seeing any change or bifurcation demand trends between older versus younger in media cruise versus returning or by region?

Michael Bayley -- President and Chief Executive Officer

Stephen, let me comment and I think Jason will jump in as well. One of the things that we've seen really after we came out of the holidays early in January is a proportional increase in the number of guests booking who is 65 plus and that continues to increase. So, as the weeks have passed, I believe, we don't know if this is a fact. But our belief is -- is that 65 plus are getting vaccinated then they're obviously becoming more comfortable with booking and we're seeing that very much in our bookings from about January forward.

So, I think, that's -- that's something that we think is -- is a major positive. And obviously, as the vaccine spreads down into the population by age group we'll see that probably accelerate. And that's also true of Silver Sea, which I think even before the holidays started to see an uplift in bookings coming in based upon age demographics. So that's -- we see that as a positive and obviously as this continues, you know, we expect to see low bookings coming in by -- by every age category.

Richard Fain -- Chairman and Chief Executive Officer

It -- it -- just a -- just a few other things that I would -- I would just add to it. We've -- we've also, you know, over the past year, we have seen a disproportional amount of our loyalty guests as well as experienced cruisers as part of -- as part of the mix of our bookings. What we have seen more recently, though it's not back to where it was pre-COVID, there has been an increase in first-year cruise coming back in -- into this space. The -- the -- the other point that -- that I would just add is -- and some of this, I think, is because people are being vaccinated and -- to Michael's point of 65 plus.

But as the distribution or shot in the arm of -- of -- of our -- of our -- of the vaccines are -- are being rolled out, we're seeing that there is a pretty strong relationship to booking volumes and -- and -- and vaccines. And so, that is -- that is, I think, something to point out that one, there are obviously -- there are people 65 and older who are getting the vaccine who are now becoming confident to travel. On the other side of it, it's also building confidence that we're getting, you know, closer to the other side of this and people are beginning to, you know, to, you know, realize that -- that -- that travel should be here sooner rather than later. And so, I -- I just want to make that point as well as -- as there seems to be a -- a tight relationship to that.

Michael Bayley -- President and Chief Executive Officer

And just -- just, Steve, and just to add one -- one more comment that -- that surprises on our Quantum bookings is that we saw an exceptionally high number of new-to-cruise booking with Quantum which -- which surprised us. But that's -- that's a real positive.

Steve Wieczynski -- Stifel Financial Corp -- Analyst

That's great to hear. As -- as a follow-up on the balance sheet, Jason, how are you thinking about the appropriate net-debt-to-EBITDA level near term and long term as we think about a -- a recovery path?

Richard Fain -- Chairman and Chief Executive Officer

Yeah, well what you the near-term will -- will really be based on when we're able to return to service. So, it's -- it's tough to kind of peg exactly, you know, the, you know, the coordinates within a certain period of time. You know, we are, you know, extremely focused from the board down on getting back to pre-COVID levels as soon as possible. So, on a balance-sheet basis, that means for us to be 3.5 times debt-to-EBITDA or better and -- and, you know, obviously, most of that is going to -- if not all that is going to come from the generation of cash from operations.

But -- but we continue to look at, you know, that -- that path as we get back in the service here to try to get the balance sheet, you know, back in -- in -- in a healthy shape.

Steve Wieczynski -- Stifel Financial Corp -- Analyst

Got it. Thanks, I'll jump back in the queue.

Richard Fain -- Chairman and Chief Executive Officer

Thanks, Steve.

Operator

Your next question is from Ben Chaiken of Credit Suisse.

Ben Chaiken -- Credit Suisse -- Analyst

Hey, how was it going? I guess on -- on the bookings side, did I catch -- did you guys say that January and February or implied that January and February were up 30% versus November, December. So, a sequential comment there, I guess, if that's correct. And then were November and December perfect -- sorry, go ahead. You said that's correct?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

That -- that is -- that is correct, Ben. And -- and of course, November and December were tough months because of -- of, you know, just the in -- incredible rise in cases in society.

Ben Chaiken -- Credit Suisse -- Analyst

Got you. OK. And then, I guess, and then you saw the tailwind from normalization plus the 65-plus comment you're kind of alluding to in the previous question.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Well, I think it's -- I think it's normalization is -- is -- is or -- or -- or really, you're seeing a -- a -- a decrease in -- in cases and you're seeing a -- a, you know, the -- the rolling out of vaccines. But I -- I do -- I -- I wanted to bifurcate the point again on -- on the relationship, you know, to the vaccines because it's not just -- obviously, people 65 and over who have gotten the vaccines who are now focused on their travel. But I think it's also a stimulus of -- of -- of confidence in the consumer that they'll be able to travel soon again. So, yeah, we're also -- it's not just an increase in 65 plus, we're seeing an increase in all the other demographics as well.

Ben Chaiken -- Credit Suisse -- Analyst

Got you. That makes sense. That's super helpful. And then as it pertains to CDC, I think the -- if I'm not mistaken, I think the next step is to potentially get some technical instructions back.

I'm curious if you have any view on timing there. And then just if not, maybe alternatively, the key questions you're hoping to -- to clear up or get answered there.

Michael Bayley -- President and Chief Executive Officer

Yeah. Hi, Ben. Yeah, we've been in regular communication with the CDC both at the -- with the maritime unit and at the executive level. And we're literally expecting the technical specifications any day soon.

So, they -- it's an inter-governmental process between several agencies within the government that are reviewing the technical specifications. But they've assured us that as soon as -- as soon as all of these things come together, they want to get us back into operation. So, we're just literally waiting. I think -- I think, again, to -- to our previous comments, I think our level of optimism is increasing as we see the infection rate declining so dramatically in the U.S.

and the number of vaccines increasing. And -- and so, we're waiting and, you know, hopefully, we'll get them soon and we can -- we can start our trial sailing. So, I -- I think you may know that when we ask for volunteers for our trial sailings, we received over 250,000 volunteers. So, there's plenty of people interested in cruising.

Ben Chaiken -- Credit Suisse -- Analyst

Got you. That's great. I appreciate it. Thank you.

Michael Bayley -- President and Chief Executive Officer

You're welcome.

Richard Fain -- Chairman and Chief Executive Officer

Thanks. Thanks, Ben

Operator

Your next question is from Assia Georgieva of Infinity Research.

Assia Georgieva -- Infinity Research -- Analyst

Good morning. Thank you for taking my question. And just to follow up on Ben's question, now with the change of guard at the CDC, should we expect a more streamlined process including vaccinations in the job in terms of cases where both you and others have more visibility in terms of how the process will evolve, technical orders, etc.

Michael Bayley -- President and Chief Executive Officer

Hi, Assia. Yeah, I think, you -- you know, I think our communication and dialogue with the CDC is -- is productive. You know, they're dealing with an incredibly challenging situation and environment. When we have our discussions, it's -- it's a relatively open process.

And as -- as they've explained to us and -- and on -- on many occasions, this really is about what's happening with the virus. And, you -- you know, and they've -- they've assured us on several occasions that when these indicators really start to move in a very positive way, then they'll -- they'll -- they'll start working with us to get us back into operation and that's exactly what we're seeing now. So, I must admit every single day I go on the COVID USA chart on Google and see how the trend line is and it's just plummeting. So, I -- my sense is -- is that we're getting closer and closer to -- to -- to good news.

Assia Georgieva -- Infinity Research -- Analyst

Michael, has the CDC offered any sort of a threshold in terms of infection rates to where they would be willing to loosen restrictions and provide more -- more of a timeframe, if you will, a schedule?

Richard Fain -- Chairman and Chief Executive Officer

See, you know, I think they, like us, are looking at these statistics. And, you know, it's not just the absolute numbers. There are the unknowns, how quickly the vaccine continues to rollout, how the variance will affect the numbers going forward. So, I think it's premature for them or for us to try and speculate on what threshold the -- the number has to because it's so many variables.

I think, every day we learn a little bit more and I think we are more encouraged to see the -- the really dramatic drop that we've been experiencing and the -- the really nice rollout particularly in the United States and the U.K. in the -- in the vaccine. But I think it's -- it's still too early for them or us to try and -- and pinpoint this is the threshold that -- that allows us to move -- move forward.

Assia Georgieva -- Infinity Research -- Analyst

Thank you, Richard. That makes a lot of sense. And thank you, Michael, as well.

Richard Fain -- Chairman and Chief Executive Officer

Thanks, Assia.

Operator

Your next question is from Patrick Scholes of Truist Security.

Patrick Scholes -- Truist Securities -- Analyst

Hi. Good morning, everyone. You've sold a number of ships -- ships in that brand so far. Thoughts on additional sales going forward?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Hey, Patrick. I mean we -- we remain opportunistic and -- and -- and considering things. As I -- I comment a little earlier that -- that for us, it's -- it -- it needs to -- it's not about selling ships to get cash, it -- it's about whether or not when we look at the investment in the ship or where the ship fits within the fleet, whether or not it's -- it fits strategically within the brand or could -- or could fit in one of our other brands. So, yeah, we -- we continue to evaluate opportunities that come our way but, you know, we don't have any specific plans or a specific goal in mind here.

Patrick Scholes -- Truist Securities -- Analyst

OK. Thank you. And then just a -- a -- a quick follow-up, Jason, a housekeeping. What was the year-end share count?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Let me see if I have it. I don't have that right in front of me. Let me see, my -- no, we can -- we can get -- we can -- we can get right to you right after --

Patrick Scholes -- Truist Securities -- Analyst

OK. That would be -- that would be great.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yeah.

Patrick Scholes -- Truist Securities -- Analyst

Thank you.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

You got it.

Operator

Your next question is from Paul Golding of Macquarie Capital.

Paul Golding -- Macquarie Capital -- Analyst

Great. Thanks so much for taking my question. So, just a couple on the -- on the capacity front. Have you summarized the aggregate cut to supply in which you've announced the three ships cut and the Azamara fleet? And then as a follow-up, given the Quantum modifications and the insights you've gleaned from that, has anything changed in your view on lead time around once you're -- you're ready to get the fleet back in the water, what that lead time might be, if you have to make modifications, etc.

Thanks so much.

Richard Fain -- Chairman and Chief Executive Officer

Well, let me -- let me take the first one and I'll -- I'll pass it to Michael in terms of just talking about our lead time for a ramp-up of service. But, you know, if you -- if you consider Azamara and you consider the Majesty and Empress which are the two ships that we sold, that -- that's about a 5% impact on our -- on our capacity. So, just a slightly numbers.

Paul Golding -- Macquarie Capital -- Analyst

All right, thanks.

Operator

Your next question --

Michael Bayley -- President and Chief Executive Officer

Hi. On the -- sorry, let me just follow up on the second part of that question with regards to bringing of ships back into operation, with regards to our learned lessons from Quantum. We -- we've been -- I mean, as you can imagine, we've been working on returning to service for many, many months. And we have multiple teams who've been working on all of the logistics and operations of this.

And of course, all of the lessons that we've been learning from Quantum have been applied to the whole corporation in terms of planning and logistics. So, I think, you know, there's a lot of variables and -- and a lot of dynamics in returning a fleet to operation. But we've obviously been doing it for many many decades in terms of bringing new ships to life. And we put a lot of energy now behind ensuring that we understand how and what we need to do to bring our ships back.

One comment I'd like to make which I think is kind of interesting and it's related to bringing our ships back and that is our crew members. We recently sent a survey to our entire crew database of around 70,000 employees. And we had 32,000 responses within 12 hours. And subsequently, within a couple of days, we've had 98% of all of our crew respond.

Then we asked them a couple of questions. We asked them are they -- are they planning on returning to work with us. And the -- the unanimous response was, "Yes, we can't wait to come back." We spoke to them about vaccines and the probability that they will be required to be vaccinated to work on the ships and what did they think about that. Ninety-eight percent of the crew were completely in favor of that.

And we also learned that -- that -- that over 4,000 of our crew have already been vaccinated at home. So, that's another important element of returning to service is the crew and I think we are very encouraged by the results of the survey. And it literally was last week -- late last week. So, just wanted to give you that extra nugget of information.

Paul Golding -- Macquarie Capital -- Analyst

Thank you. Thanks so much.

Operator

Your next question is from Vince Ciepiel of Cleveland Research.

Vince Ciepiel -- Cleveland Research -- Analyst

Great. Thanks for taking my question. Curious on your thoughts longer term about occupancy. Do you think you'll get back to pre-COVID levels? You've seen anything in the bookings data about consumers' appetite for interior cabins? Anything related to maybe spacing of crew that you have to consider going forward? And -- and with all those considerations, have that may be changed or informed the way that you're building your new ships and -- and layout there?

Michael Bayley -- President and Chief Executive Officer

It's a -- it's a great question. One thing we saw on Quantum was that outside rooms sold very quickly. And of course, we -- we put premiums on those rooms. Be -- and so, you can see that people were -- were considering that or thoughtful of that.

We know that in the beginning, when we do a start-up, depending upon the environment that there will be, you know, protocols in place with regards potentially with the berthing of crew, etc. So, that -- that may, you know, present some challenges. But we don't see it as permanent, we see it as transitional. And so, I think -- I think in the beginning, we may see more focus on outside inventory than inside.

But there's no really significant dynamic that's -- that's in front of us right now. And -- and we do definitely see it as transitional. And -- and in terms of the question of returning to our pre-COVID load factors, you know, we -- we obviously don't know but I think our expectation is -- is once we go through the transitional phase that we will be returning to our pre-COVID load factors.

Vince Ciepiel -- Cleveland Research -- Analyst

That -- that's helpful. And then an unrelated follow-up for Jason related to debt. Did you mention the debt -- debt capacity remaining? Maybe -- maybe I missed that. I think as of August, you said $3 billion and I think you've utilized $1.3 billion since then.

And then I believe that the old debt maturity schedule called for about $1.3 billion of pay down in '21. And I think the most recent number is $0.4 billion. So, if you could -- is that correct and could you talk about kind of what changed?

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Yes, sir. So, as it relates to our debt basket. our -- our current availability is -- is $2 billion under -- under -- under those indentures. And -- and Vince, you are right, we did talk about that our -- our liquidity -- our -- our -- our maturities for 2021 is $400 million.

As we -- as we noted late last week, we did secure debt holidays from our export credit agencies for the vast majority of -- of what was available and we should have the balance of that closed out here hopefully in the next couple of weeks. And -- and based on those two things, we will have -- have our -- our maturities for 2021 will be about $400 million.

Vince Ciepiel -- Cleveland Research -- Analyst

Thank you.

Operator

Your final question is a follow-up from Robin Farley of UBS.

Robin Farley -- UBS -- Analyst

Oh, great. Thank you for letting me help you with the last question. Just two things, one is you -- you mentioned that the next Royal ship to be back in service would likely be outside the U.S. and I'm just wondering if that sort of more likely to be maybe Australia.

I'm just thinking about kind of where your sourcing comes from the market. You know, where you can sort of fully source a ship as opposed to -- to Europe that -- just kind of thinking if -- if that's more likely to be Australia. And then the other question -- and this is very minor but I was just curious with the sale of the Empress and Majesty. Those were ships that my understanding -- I -- I thought those were the only Royal Caribbean ships that fit into the port in -- in Havana and Cuba.

I know that's like way out on your radar screen but are -- are there other ships that could potentially return to that market if -- if that were to reopen? Thanks.

Michael Bayley -- President and Chief Executive Officer

So, Robin, great question on -- on Cuba deployment. And of course, you -- you know, when -- when Jason called us and said, I think -- I think we've got a buyer for these two ships, it -- it was the very first question we all went and double-checked and -- and we're OK. So, we do have a ship that -- ships that will fit into -- into Cuba if that should come back. So, we -- we're OK there.

With regards to ships that is starting in Australia or China or Europe or elsewhere, for example, we literally are in discussions globally around the world with different governments and looking at where -- where they are with COVID and vaccines, etc, etc. So, I think the point is -- is that it -- it -- there's a lot of opportunities that's starting to open up globally in terms of what's occurring with COVID. And so, we -- we -- we are in discussions around the world. One of the products that we opened -- this is not a product that's -- that, you know, would be the next product for Royal Caribbean to open up, but we -- we opened the Grandeur of the Seas homeporting in Barbados, sailing on Barbados in November of '21 on a mix of seven and 14-night cruises into the Southern Caribbean.

And really focused into the North American, American-Canadian, and the U.K. market. And it -- it is ex -- exceeded our expectations quite significantly. I mean, we literally sold 25% of our load factor within -- within a couple of weeks.

So, back to Jason's point, there's a lot of demand we think is building up globally for -- for vacations and -- and cruise, and for Royal Caribbean. So, you know, we're quite kind of optimistic about where this is heading.

Robin Farley -- UBS -- Analyst

Great. Thank you very much for the -- for the color.

Richard Fain -- Chairman and Chief Executive Officer

Thanks, Robin.

Jason Liberty -- Executive Vice President and. Chief Financial Officer

OK.

Michael Bayley -- President and Chief Executive Officer

Thank you, Robin.

Richard Fain -- Chairman and Chief Executive Officer

OK. Thank you, everybody, and Shelby for your assistance with the call today. And -- and we thank all of you for your participation and interest in the company. Our crew will be available for any follow-ups you might have including the share count which -- which we'll pass along.

And I -- and I wish you all a very great day.

Operator

[Operator signoff]

Duration: 61 minutes

Call participants:

Jason Liberty -- Executive Vice President and. Chief Financial Officer

Richard Fain -- Chairman and Chief Executive Officer

Robin Farley -- UBS -- Analyst

Steve Wieczynski -- Stifel Financial Corp -- Analyst

James Hardiman -- Wedbush Securities -- Analyst

Brandt Montour -- J.P. Morgan -- Analyst

Michael Bayley -- President and Chief Executive Officer

Jaime Katz -- Morningstar -- Analyst

Stephen Grambling -- Goldman Sachs -- Analyst

Ben Chaiken -- Credit Suisse -- Analyst

Assia Georgieva -- Infinity Research -- Analyst

Patrick Scholes -- Truist Securities -- Analyst

Paul Golding -- Macquarie Capital -- Analyst

Vince Ciepiel -- Cleveland Research -- Analyst

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