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Royal Caribbean Cruises CEO Richard Fain weighs in on the state of business.
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But -- what is your rebutted this right now this shares of Royal Caribbean this stock.
Is down nearly 30%.
From last year the cruising industry as a whole taken -- hit.
From the economic downturn overall here tell us how the company is navigating tough waters.
Let's believe that a first calls -- visit to be richest payrolls Caribbean chairman and CEO -- great to have you.
On the show what do you -- thank you for having me I love I love talk -- you that I interest what do you make of what we're saying in the cruising industry it seems that.
The industry's China come back.
But you keep getting his head was whether it's Europe or the jobless rate of the United States and I channel everything right now.
Well I'm.
It is frustrating because the industry has such a very strong base business model and then we do hit these bad things like.
They the big.
Recession the Great Recession.
The unfortunate tragedy in Italy this year and now.
Of course what's going on the end of the fuel market and an economy in Europe.
So we've run through some -- waters I actually think though we've held our heads up quite well.
We've shown how resilient we are even against bad times.
Well you know again we're showing his stock obviously shareholders are giving you a bit of pressure -- -- you mentioned hedging.
The hedging of fuel -- -- we have -- actually down whether -- the Brent contract WTI.
Does that help you then.
With regards to that did the numbers the current summer numbers -- -- -- crucial time.
-- we've had we've done hedging for twenty years and our objective is -- to eliminate these super high a higher highs and super low lows.
And just have a more stable operation.
And so the lower the oil prices that this recent downturn in the oil price really will help us and long term.
The hedging will smooth out so we won't get as immediate a big up benefit from it.
-- but at the same time when the price went up we didn't suffers much I think -- hedging program has been a very prudent thing for us to do.
Now I hope the price remains low.
And so I think a lot of Americans -- How are you feeling about -- right now what are the numbers that you're saying.
Well.
We we did take -- hit the economy in Europe has has been difficult then of course.
There was the immediate impact from on -- that one situation.
Of course as you know I can't talk about things since our last call -- we did point out.
That overall we're expecting yield improvements this year.
Not as much as I hoped but I think it.
For us in this kind of environment to be looking -- yield improvements.
Getting better against -- bad economy particularly in Europe.
And the tragedy going on shows how strong we are.
Most businesses and a case like this would be talking about how how much worse things are -- saying things are getting is better as fast as we had expected.
Yeah and they even bringing up the -- I know that that's something that -- it's a tough chapter.
For for the company is also asking about the animal buddy over Wells Fargo banishment and -- common wanna ask you about that she was estimating the break up value of 42 dollars a share.
For Royal Caribbean ME DC -- -- your future do you see -- change in the structure.
Of the company.
You know I think the company has such a tremendous none of ways to go -- we don't even look at the break -- value because.
The -- operating value I believe is so much higher than anything I think.
People do tend to look in these days know when things -- bad everybody looks at the worst case -- -- -- is encouraging that some people looked at the worst case and say.
My god even in the worst cases of breakup value there.
But the real value -- a real opportunity for us is to continue to offer these great vacations and to start to get our prices up.
To the point where it's generating -- on the high cash flows.
Well let -- -- -- -- return I got to run but I guess you are expanding in Australia are expanding in China has so it's we're hoping it's a growth story Richard -- thank you good to have you on the show are.
