Royal has so much money, they are turning into a bank, need a loan? So where is this money coming from?

[Jimbo]

Dear valued travel partners,

As 2020 draws to a close, we realize it has been a year of uncertainty. We are all ready to return to the sea. During this time, we have spoken to so many of you about what you have endured to sustain your business. These past months find so many of our partners looking for options to secure your future.

With you in mind, Royal Caribbean Group is introducing the second phase of our successful RCL CARES program supporting our travel advisors. Richard Fain Chairman & CEO of Royal Caribbean Group reminds us that “There is hope on the horizon, and we will get through this together.” With our ongoing commitment to support our travel advisors, Royal Caribbean Group brings real options with a $40M "Pay It Forward" program.

The RCL CARES "Pay It Forward" program provides these funds to our qualifying travel advisors, who can apply for three-year interest free loans of up to $250,000. The application process for the program will be shared with you in January 2021.

Over the past 50 years, Travel Partners have been our strongest allies, and we consider it an honor now to provide this opportunity — it’s what friends do. We believe, with your continued support, that the future is bright. Your success is our success, and we are humbled to continue our vital alliance with each of you.

Thank you for all you do. Together, we are looking forward to setting our sails for fair winds and following seas in 2021.

— Happy Holidays to all! Stay Safe!

[Jimbo]

This ought to go over big on here................

[voyager70]

Crazy

[John&LaLa]

40 million is a drop in the bucket when you think about it 

[Jimbo]

8 minutes ago, John&LaLa said:

40 million is a drop in the bucket when you think about it 

How much of your money would you like to drop off at the your nearest travel agency,  I bet they sure would like it, nothing stopping you.

[Hoopster95]

24 minutes ago, Jimbo said:

How much of your money would you like to drop off at the your nearest travel agency,  I bet they sure would like it, nothing stopping you.

.

None...

 

However, I feel this is a shrewd business decision in my humble sole proprietorship/self contractor/pound the pavement opinion. Always take care of the hands that feed as best you can. The referrals that may come back in later years can produce 10fold returns

 

edit: btw Jimbo, nice to see you posting. I too have been quite a lurker in recent months. Haven't been on CC for about 5 days now. 

Edited December 21, 2020 by Hoopster95

[John&LaLa]

1 hour ago, Jimbo said:

How much of your money would you like to drop off at the your nearest travel agency,  I bet they sure would like it, nothing stopping you.

 

Don't get the point. I have a lot of money with my favorite Travel Agency

[Tree_skier]

No issues with this at all.  Most refunds are now being processed with 2 weeks so it's not like they are illegitimately holding anyones money.  Like @Hoopster95 said, it just seems like shrewd business.  Those TA's that have received support are more likely to have a favorable opinion of Royal and thus more likely to direct first time clients towards Royal in the future.  $40 million is only 1/6 of a month of their current cash burn.  If I remember my previous reading I think they felt they were monetized all the way through 2021 without a single cruise ship sailing.  1 ship is sailing in Singapore and the 3rd quarter or at the latest 4th quarter 2021 is starting to look more promising with the vaccine rollout.  Good on Royal for helping a segment of the population hit devastatingly by this virus.

[John&LaLa]

2 minutes ago, Tree_skier said:

No issues with this at all.  Most refunds are now being processed with 2 weeks so it's not like they are illegitimately holding anyones money.  Like @Hoopster95 said, it just seems like shrewd business.  Those TA's that have received support are more likely to have a favorable opinion of Royal and thus more likely to direct first time clients towards Royal in the future.  $40 million is only 1/6 of a month of their current cash burn.  If I remember my previous reading I think they felt they were monetized all the way through 2021 without a single cruise ship sailing.  1 ship is sailing in Singapore and the 3rd quarter or at the latest 4th quarter 2021 is starting to look more promising with the vaccine rollout.  Good on Royal for helping a segment of the population hit devastatingly by this virus.

 

Some folks here love shock value thread titles.

 

I like to think that 40 million is a very small percentage of their recent stock offering or additional debt they took on. 

 

Baded on the title, @Jimbo may be implying they are using our deposits to fund some goodwill. I don't buy it.

[deliver42]

This has nothing to do with deposits.

[sfaaa]

Interest free loan? Has RCCL gone nut? Money is never free. 

[ShmuelCharlie]

1 hour ago, sfaaa said:

Interest free loan? Has RCCL gone nut? Money is never free. 

Of course not, especially if RCI has issued bonds or authorized new shares to sell to current or new investors for continuing operations. 

[Milwaukee Eight]

10 hours ago, John&LaLa said:

 

Don't get the point. I have a lot of money with my favorite Travel Agency

I guess the question is, when can your TA redeem the money from your deposits and bookings?  I didn’t think they got paid in the beginning. What is the process?

 

M8

[Ourusualbeach]

1 hour ago, Milwaukee Eight said:

I guess the question is, when can your TA redeem the money from your deposits and bookings?  I didn’t think they got paid in the beginning. What is the process?

 

M8

They either get paid after final payment is made (FIT bookings) or after the ship sails (group bookings)

[not-enough-cruising]

Seems like an excellent business plan for RCG to show good will and foster some loyalty amongst the TA segment to perhaps promote their product a little more over others.  The money pledged is really statistically insignificant in the big picture.

For quite some time now anyone that wanted their money refunded knew the rules, and could easily get it done.

 

KUDOS TO RCG!!

[Baron Barracuda]

Have no problem with this program.  It's loans which can eventually be repaid by docking commissions.  RCG needs TA's to stay in business at least in the short term.  Customer service can't handle the current call volume.  Imagine if a big TA went under.

 

Long term though can see cruise lines re-examining their TA relationships.  Commissions are a huge expense for them.  Millenials are used to booking trips online and airlines have managed to get by without them.  The only reason many of us use a TA is for extra percs.  If Royal offered discounts for booking direct we'd certainly consider it.

[Ourusualbeach]

50 minutes ago, Baron Barracuda said:

Have no problem with this program.  It's loans which can eventually be repaid by docking commissions.  RCG needs TA's to stay in business at least in the short term.  Customer service can't handle the current call volume.  Imagine if a big TA went under.

 

Long term though can see cruise lines re-examining their TA relationships.  Commissions are a huge expense for them.  Millenials are used to booking trips online and airlines have managed to get by without them.  The only reason many of us use a TA is for extra percs.  If Royal offered discounts for booking direct we'd certainly consider it.

The cost of paying the staff and the other associated costs of maintaining the call centers is most likely more than the commission paid to TA's.  Royal seems to be going in the opposite direction by continually making their consumer facing website more difficult to navigate

[Goodtime Cruizin]

I like it. Smart move on their behalf. I have had a few TAs that aren't worthy and I bet about right now they are no longer in the biz these covid filled days. That's good for us cruisers. On the other hand, I've had two TA's that are golden in their profession. I bet these two could use a helpinng hand and I hope they apply and are taken care of. That'd be good for us too. 

Edited December 22, 2020 by Goodtime Cruizin

[Baron Barracuda]

1 hour ago, Ourusualbeach said:

The cost of paying the staff and the other associated costs of maintaining the call centers is most likely more than the commission paid to TA's.  Royal seems to be going in the opposite direction by continually making their consumer facing website more difficult to navigate

No argument on "quality" of Royal's IT or that some TA's provide better service.  Something definitely wrong though if it's cheaper for Royal to pay commission than perform work in-house while on same amount TA can cover their costs give us percs and still earn a profit.

Edited December 22, 2020 by Baron Barracuda

[John&LaLa]

2 hours ago, Baron Barracuda said:

Have no problem with this program.  It's loans which can eventually be repaid by docking commissions.  RCG needs TA's to stay in business at least in the short term.  Customer service can't handle the current call volume.  Imagine if a big TA went under.

 

Long term though can see cruise lines re-examining their TA relationships.  Commissions are a huge expense for them.  Millenials are used to booking trips online and airlines have managed to get by without them.  The only reason many of us use a TA is for extra percs.  If Royal offered discounts for booking direct we'd certainly consider it.

 

Honestly saved more with group bookings and inside information than perks

[Ourusualbeach]

1 hour ago, Baron Barracuda said:

No argument on "quality" of Royal's IT or that some TA's provide better service.  Something definitely wrong though if it's cheaper for Royal to pay commission than perform work in-house while on same amount TA can cover their costs give us percs and still earn a profit.

TA's are not just selling Royal, they are selling everything from cruises to AI’s to insurance......

Edited December 23, 2020 by Ourusualbeach

[Ocean Boy]

On 12/21/2020 at 5:00 PM, John&LaLa said:

40 million is a drop in the bucket when you think about it 

Spoken like a true politician.

[Goodtime Cruizin]

$10 miilion is all it took to flip Detriot.  

[Iplayslots]

It’s Brilliant... In fact Fain will leed the charge for others to do the same.  They are only taking care of the very hand that feeds them.  Its keeps loyalty the the brand. Other industries have helped subsidized, gave loans, bonuses ect. to the sales forces that sell their products.  It will be proven in the long run to be equitable for both sides.  
 

[neverbeenhere]

2 hours ago, Ocean Boy said:

Spoken like a true politician.

$ 40,000,000 out of a current market cap of $ 15,600,000,000 is a pretty small amount.  Subtract 6 zeroes from each number to compare the amounts. 😀