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Royal Caribbean Extends Shutdown and Its Much-Expanded Cancellation Policy

By Daniel B. Kline - Updated Mar 31, 2020 at 8:50AM

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The cruise line has all of its ships docked.

Royal Caribbean (RCL 1.41%) has been shut down since mid-March. The cruise line has been forced to keep all of its ships docked as the coronavirus pandemic has spread around the world.

While any future reopening dates are essentially a guess, Royal Caribbean has voluntarily suspended its operations until May 11. The company is, however, taking reservations for future trips, and it's trying to encourage customers to make those bookings.

A Royal Caribbean cruise ship.

Royal Caribbean plans at least a roughly two-month shutdown. Image source: Royal Caribbean.

What is Royal Caribbean doing?

The cruise line wants to make sure that its customers feel confident booking a trip. That includes extending a guarantee it began when the coronavirus first became a global issue. The company explained its updated policy in a recent statement:

While there is so much to consider and think about during this unforeseen situation, we want to make sure we do everything possible to ease any concerns, especially when it comes to your upcoming vacation plans. So, to provide you with greater flexibility and comfort, we're extending our Cruise with Confidence program. All guests currently booked on sailings departing on or before September 1, 2020 may choose to cancel their reservation up to 48 hours prior to departure.

Prior to the Cruise with Confidence offer, cruises were only cancellable for customers who had purchased travel insurance. Under this deal, customers who cancel can receive future cruise credit and, in some cases, a refund.

Why is Royal Caribbean doing this?

People are somewhat wary about being on a cruise ship given that a few ships have been quarantined due to the coronavirus. Allowing customers to cancel a trip and push it off to a future date may encourage people to book cruises. That will keep at least some money coming in for the cruise line which most certainly needs it.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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