If Royal Caribbean (NYSE:RCL) hopes to return to normal operations, it's going to need its most loyal customers to come back. The cruise line essentially has two loyalty programs: one based on how many days you have sailed and the other based on your gambling activities over a 12-month period.
The sailing program, Crown & Anchor, never expires; once you hit a tier, you get those benefits forever. The gambling rewards program, Club Royale, offers patrons who accrue 2,500 points within a 12-month period, free drinks in the casino and a free annual cruise.
You get those benefits from the point you earn them and for one full year after. But with most sailings halted indefinitely, many loyal customers were concerned that they would lose their tier status or miss out on their rewards.
What has Royal Caribbean done?
In an effort to appease these customers, the cruise line has extended tier status for current Club Royale members.
"All Club Royale members will receive an extension of their 2020 tier status through March 31, 2022," the company wrote in an email to members. "Additionally, members who were in jeopardy of losing their tier status on the recent April 1, 2020 renewal date will receive an extension on their status through March 31, 2022. This means you will enjoy all your benefits and perks for the next 24 months."
That's a generous offer that acknowledges that some people may have lost the ability to qualify for 2021 or even 2022 based on cancellations or being unwilling to cruise.
This is smart business
Regular customers who also gamble are likely very valuable to Royal Caribbean. The company offers heavy discounts and even free sailings based on gameplay and it would not do that if these customers did not make the cruise line money. Keeping these regulars happy will likely help get the company back on track.