Richard Fain kicks off CruiseWorld, talks stepping down, FCCs, sustainability

MIAMI BEACH — Just a day after announcing that he will step down as Royal Caribbean Group’s CEO, Richard Fain is reveling in his new situation. “My hands have been sore all this time from working, and now I’m looking forward to a time when my hands will be sore from clapping,” he told a packed room of travel advisors at CruiseWorld.

But his warm comments during his CEO Conversation with Travel Weekly editor-in-chief Arnie Weissmann hinted that his working days in the industry are not over yet. After all, he retains his role as company chairman.

After “33 amazing years with a simply extraordinary team,” Fain said he was feeling very good about relinquishing his seat to CFO Jason Liberty, with whom he’s worked for half his career.

Fain received a standing ovation from the CruiseWorld audience. The show is fully live this year after being remote in 2020 due to the pandemic.

Why now?

“The stars all came together” to make this feel like the right time to exit: the pandemic is waning, Royal Caribbean is “looking forward to the next growth spurt, and we had a leader who is ready, whom I respect and have respect for his vision,” he said.

“I’ve had a blessed career; I’ve been fortunate to work with so many wonderful people at the company and the destinations we go to and with suppliers and the travel advisor community, and this felt absolutely right.”

Cruising ahead: Booking patterns, FCCs

But still, he acknowledged, there is work to be done. The cruise economy always has depended on sailing 100% full, “but in order to be sailing full today we needed to sell those berths last January, last March,” and clearly that didn’t happen. As the world emerges from the pandemic, though, “this should be one of the most exciting times in our history, because now more than ever people have money, people are eager to get out there. Our bookings keep improving, and we’re already beginning to see historically very normal booking patterns. I see the pandemic as being a bit of a hiatus, but future prospects are excellent.”

On the subject of future cruise credits, Fain said that “when the pandemic came it went from thousands of pieces of paper over a year to millions scattered over a few hours, and we were overwhelmed, like everybody in this room. I wish we had anticipated it and had systems; we’re still reeling from that. But people are redeeming them very quickly, and I think by the end of next year this will no longer be an issue.”

When Weissmann asked about the cruise industry’s focus on sustainability and environmental issues, Fain acknowledged that Royal Caribbean’s efforts may not yet have translated into increased revenues but is moving in that direction. “We’re a long-term industry; you have to think about what’s going to be,” he said. “I won’t say we’re not seeing any demand, but we’re not seeing a huge demand for sustainability” from customers. “But that’s where the puck is going, and we need to be there. And our people internally care, so if we don’t do that we won’t be able to hire and retain the people who motivate our success.”

Bright spots

Two global problems not affecting Royal Caribbean Group too much are global supply chain shortages and staff shortages, Fain said, thanks to their long-term planning of purchasing and its reputation among crew.
When he first set foot onboard the first few sailings, Fain said, “it took me an hour to walk 10 feet because the crew was so happy to be back, and they wanted to tell me their stories.”

Another happy job over the past few months has been producing those videos for travel advisors. “We’ve always supported the travel advisor community simply because we need them to be successful,” he said. “Doing those videos is a little like preparing a presentation for my board — I found them to be a very helpful exercise and I learned a lot.

“And, yes, they were candid. But there’s not much point in doing them otherwise.”

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