Major cruise company Royal Caribbean Group (NYSE:RCL) announced today it is creating a $40 million fund to provide loans to travel agents struggling with the COVID-19 pandemic and its economic aftershocks. These allied "travel advisors" will be able to apply for the loans starting in January, Royal Caribbean says, though details about which agencies qualify and how they can ask for money haven't been released yet.
Each advisor or agency meeting the qualifications Royal Caribbean sets will be able to ask for up to $250,000 from the cruise company's fund. The loans need to be repaid over a period of three years and will be interest-free. CEO Robert Fain says "our travel advisor friends are suffering, too, and we will get through this tough period together." Travel agencies continue to provide significant revenue for cruise lines despite the availability of direct bookings on cruise websites.
Back in April, Royal Caribbean provided a program to help these businesses get monetary aid under the Coronavirus Aid, Relief and Economic Security (CARES) Act. As Travel Weekly reported, Royal Caribbean didn't provide any loans itself then, instead assisting with applications. CEO Robert Fain noted any "piece of legislation can be challenging to understand, and we want our travel advisors to receive all the financial assistance available to them."
While all of the major cruise lines have sustained heavy losses from pandemic lockdowns and no-sail orders, at least one analyst, from UBS, thinks Royal Caribbean is best positioned for a strong stock market rebound once sailing starts up again. This is based on the fact it has issued less new stock in response to the crisis than its competitors, and thus has diluted its value less than the other industry "big names."