Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Arnold Donald
Speaker 1: is with us and he joins us on this Wednesday. Arnold,
Speaker 1: first of all, great to have you here with us. Hi, Carol,
Speaker 1: how are you everything going well? I'm doing okay, doing
Speaker 1: doing well, hanging in there. Um, tell me about you
Speaker 1: because and tell me about Carnival, because I have to
Speaker 1: say I was pulling together my notes last night and
Speaker 1: then I kind of woke up this morning. I had
Speaker 1: to certainly tweak them. Uh. Tell me about the CDC
Speaker 1: now possibly offering to or allowing ships to be out
Speaker 1: and running by midsummer. What's changed with the CDC and
Speaker 1: what are the restrictions that are going to have to
Speaker 1: happen in order for that to actually come to come
Speaker 1: to fruition. What you might recall, Carol, the CDC, I
Speaker 1: think last October issued a conditional sale order and they
Speaker 1: came out and phases. The first phase was bringing ships
Speaker 1: back in the US waters and its primarily with minimal
Speaker 1: crew on board. We've finished that phase of it. In
Speaker 1: terms of Heaven and ourselves. Thirty ships that are currently
Speaker 1: in green status. They issued UM on April two, UM
Speaker 1: the next phase UH, and frankly, what has been issued
Speaker 1: UM doesn't give us a specific time and to be
Speaker 1: able to return UM UH and also was really not
Speaker 1: workable in the current form. But again it just came
Speaker 1: out and we have an opportunity to discuss with the
Speaker 1: CDC any administration UM to make certain that we do
Speaker 1: have something that's workable and hopefully that would allow us
Speaker 1: to be able to seal in July. And we're hoping
Speaker 1: it will be something that's more in line with the
Speaker 1: advancements of vaccines that's occurred in the rapid advancement of
Speaker 1: the vaccines that amonistration has been so successful with, as
Speaker 1: well as the advancement and treatments and investments and rapid testing,
Speaker 1: none of which existed when the original conditional Sale Order truth.
Speaker 1: So we're hopeful that we'll be able to meet with
Speaker 1: the administration and CDC and and come up with something
Speaker 1: as practical and will allow people to return to their
Speaker 1: choice of vacation travel and get a whole lot of
Speaker 1: Americans back to work. As you know, Carol, but half
Speaker 1: million people impacted in the US in terms of jobs
Speaker 1: associated with the cruise industry outside of the cruise companies themselves. No,
Speaker 1: it affects a lot of other jobs and other industries
Speaker 1: connected with the cruise U cruise industry. Hey, one thing
Speaker 1: I gotta ask you, Arnold, is how much of Carnival
Speaker 1: threatening to relocate their ships to other markets outside the
Speaker 1: United States? Do you think was the reason for the
Speaker 1: CDC change, Because it was just a few days ago
Speaker 1: that they came out, you know, and we're still kind
Speaker 1: of holding firm what happened. What were the conversations that
Speaker 1: maybe you, you and other members of the cruise line
Speaker 1: industry had with the CDC. There was no threat or anything.
Speaker 1: It's just a practical reality that if we're not able
Speaker 1: to seal from the US um and and some months
Speaker 1: soon we would have to sail from elsewhere. And so
Speaker 1: some of the ships what homeporting, and a number of
Speaker 1: companies have already announced homeboarding ships that normally would have
Speaker 1: been sailing out of the US homeporting from different places
Speaker 1: in the Caribbean. But it's not a threat or anything.
Speaker 1: It's just a natural outcome of not being able to
Speaker 1: sail um you know, from the U S I'm not
Speaker 1: sure anything has changed, perhaps it has. I haven't heard
Speaker 1: directly from the CDC or the administration anything has changed.
Speaker 1: I think that they genuinely believe the uh information they
Speaker 1: put out might allow some limited sailing as early as
Speaker 1: July uh and so we'll have to discuss that with them.
Speaker 1: In our timeline son't quite match up with that, but
Speaker 1: maybe we don't understand everything. So the CDC has a
Speaker 1: job to do. They're trying to do their job. I
Speaker 1: think as long as we work together with the CDC
Speaker 1: and the administration, we can all get crews, you know,
Speaker 1: back soon, and we can get it back and safe
Speaker 1: with the interests of public health, and we can have
Speaker 1: all those half a million workers no longer suffer from
Speaker 1: not being able um to earn a wage and and
Speaker 1: and do their jobs in the ports and the various
Speaker 1: travel agents and all the other things that are connected
Speaker 1: to two crews well, or does it feel like that
Speaker 1: there's a more constructive conversation with the CDC right now?
Speaker 1: And I asked that because I do also wonder is
Speaker 1: there kind of a last straw for you that if
Speaker 1: the CDC in a couple of months isn't clear about
Speaker 1: what it will take to get ships uh U s
Speaker 1: homeported ships, you know, up and running. Is there a
Speaker 1: point where you're gonna say, okay, I'm done and we're
Speaker 1: going to move ships abroad. UM, As you know, we
Speaker 1: have nine brands Carrel, so about fifty nine of our
Speaker 1: nineties ships are not under the conditional sale order. They
Speaker 1: don't you know, sail in the US anyway. And so
Speaker 1: there we are already active and sailing, and we've announced
Speaker 1: sailings and in the UK we've announce sailings. In Greece,
Speaker 1: UM IIDA, our German brands already sailing from the Canary Islands,
Speaker 1: all on a limited basis at this point, but it
Speaker 1: is movement in the direction and UM we're optimistic that
Speaker 1: we'll be able to do the same here and continue
Speaker 1: to dialogue with the CDC. I think when the big
Speaker 1: issues here is UM the relative mentality around risk. So
Speaker 1: today you can, UM, you could border plane, fly to
Speaker 1: a country, get on a cruise ship and sale fly
Speaker 1: back from that country and come back to the United States.
Speaker 1: You have to do certain testing exerta, but you can
Speaker 1: do that. And today, even if vaccinated, you can't get
Speaker 1: on a cruise ship in the US. And that's whether
Speaker 1: you've vaccinated or not in terms of what you could
Speaker 1: do outside you know, from the US going somewhere else
Speaker 1: to get on a cruise ship. So and if you
Speaker 1: look out of the travel and entertainment sectors you talked
Speaker 1: about spring breakdown in Miami, um, or you look at
Speaker 1: arenas where people are starting to be able to attend
Speaker 1: sporting events, restaurants, hotels, resourts, air travel. Uh. You know,
Speaker 1: there's a level of risk management and mitigation, and so
Speaker 1: we would like to just be treated similarly to the
Speaker 1: rest of the travel and tourism sector. Um. And we
Speaker 1: also obviously have enhanced protocols already in place versus many
Speaker 1: of those sectors. Well, does it not make extraining, medical
Speaker 1: sent on board, etcetera. Forgive me for interrupting, but does
Speaker 1: it not make sense to you, Arnold um that on
Speaker 1: for planes, you know, people get on a plane and
Speaker 1: they're sitting right next to each other. Um. There seems
Speaker 1: to be kind of different requirements for people in different
Speaker 1: parts of the tourism industry. And yet you folks are
Speaker 1: still waiting, you know, to be able to get up
Speaker 1: and running. Does it seem is this disparate treatment fair
Speaker 1: in your view? I think again? I think everyone is
Speaker 1: trying to do what they think is best for public health,
Speaker 1: and I think, um, together we can work and find
Speaker 1: a way forward. It's true you get on the plane.
Speaker 1: Some people say, well, you only a plane for a
Speaker 1: few hours, but you are sitting right next to someone.
Speaker 1: Before you got on the plane, you are an airport terminal.
Speaker 1: Before you're on an airport terminal, you're in some kind
Speaker 1: of trying inspitation. Before that, you came from somewhere. When
Speaker 1: you land, you go to another airport terminal, and then
Speaker 1: you get in an automobile or bus or whatever. You
Speaker 1: get onto transport, and then you go places. You might
Speaker 1: go to a restaurant, you might stay in a hotel,
Speaker 1: you may go to a resort, and and all of
Speaker 1: that activity. And a cruise is a city at sea.
Speaker 1: And so to comparis just to an airplane ride is inappropriate.
Speaker 1: And to comparis UM just to a hotel stay is inappropriate. Uh.
Speaker 1: And so I think the reality is look at the evidence.
Speaker 1: There's over four hundred thousand people that have sailed UM
Speaker 1: to date in Europe, a fewer than fifty cases of COVID,
Speaker 1: all handles seamlessly without disruption problem outbreaks nothing because I
Speaker 1: know you've got what sailing in your two of your brands,
Speaker 1: and I think six of you, yeah, less than less
Speaker 1: than fifty cases out of an estimated for a hundred
Speaker 1: thousand folks, and each of us handled seamlessly because arrangements
Speaker 1: you know, were pre and age with reporting people's travel
Speaker 1: weren't disrupted because now there's a lot more understanding that
Speaker 1: all happened before vaccines, and so now we have the vaccines,
Speaker 1: which are another layer and a major layer, and we
Speaker 1: would encourage everyone to get vaccinated. I mean, that's that's
Speaker 1: what we will encourage people to do because it is
Speaker 1: one of the best levels of protection against any serious
Speaker 1: effects from COVID that that you can have. And that's
Speaker 1: what the science says, and will continue to be informed
Speaker 1: by the science by global medical experts. But we will
Speaker 1: respect whatever the rules are wherever we go, as we
Speaker 1: always do, we have to be in compliance. What do
Speaker 1: you think about making it mandatory for vaccines for passengers
Speaker 1: as well as for crew members. You and I have
Speaker 1: talked about this before. So far you guys have said no.
Speaker 1: I know you said you highly recommend them, but what
Speaker 1: about making them undatory? Norwegian is doing it. What's your
Speaker 1: take here, Well, first of all, we encourage the reality
Speaker 1: today is um, vaccines are not accessible to everyone. Um,
Speaker 1: young people show then you know today, Um, it's not
Speaker 1: vaccines are not recommended for children. Uh. And so there's
Speaker 1: gaps in the vaccine protocol today, their tests under way.
Speaker 1: Maybe in a few months, you know, it'll be fine
Speaker 1: to vaccinate children. Maybe in a few months there will
Speaker 1: be plenty of vaccine available for everyone. Everyone is hoping
Speaker 1: for that, everyone's assuming that. And if that comes to past,
Speaker 1: we would encourage everyone to be vaccinated, whether we mandate
Speaker 1: or not. We have to find, you know, in some
Speaker 1: places that illegal demand, date, etcetera. I understand personal choice
Speaker 1: and personal liberty, will respect all of that, and so
Speaker 1: we'll follow what the regulations are wherever it is. And
Speaker 1: but we too want to stand and do the thing
Speaker 1: that's in the best enteress of public health. However, vaccines
Speaker 1: are not mandated for other forms of travel and tourism, etcetera.
Speaker 1: Then we're not sure, um, that it makes sense to
Speaker 1: mandate them, you know, for cruise either. But again we'll comply,
Speaker 1: but we think you know, fair and level treatment, serving
Speaker 1: the best entrance of public health is what we should
Speaker 1: be about today. We just want to continue to discuss
Speaker 1: with CDC and the administration and find a way forward
Speaker 1: where hopefully we can be sailing again this summer here
Speaker 1: in the US. What's going to change on the boat
Speaker 1: if I get on a ship. I've been on one
Speaker 1: of your ships, are Charlie Pellett has been on many
Speaker 1: of your ships? Um? What's it gonna be like when
Speaker 1: it comes to the buffet. Is it going to be
Speaker 1: temperature chips, checks, um a lot? What will you guys do?
Speaker 1: What will be different? Well, it depends so right now
Speaker 1: with the sailing as we've passed so far, we've had
Speaker 1: universal testing, we've had physical distancing, we've had mask wearing,
Speaker 1: we've had additional medical screens. We of course have enhanced
Speaker 1: sanitation and asked hair handling stuff on the ships. So
Speaker 1: all of that is present and it's worked well. Um,
Speaker 1: going forward with vaccines, we'll have to see what makes
Speaker 1: the most sense and protocols, whether all that layering on
Speaker 1: top of vaccines makes sense, whether it could be for example,
Speaker 1: as it was announced by CDC with regards to uh
Speaker 1: ring one vaccine and the group and you may not
Speaker 1: need to wear the mask if everyone's vaccinate vaccinated you
Speaker 1: know it's frequently in so on. So we'll figure all
Speaker 1: that out and and and that will evolve the coming weeks.
Speaker 1: How we'll figure it out, will listen to the medical
Speaker 1: experts and the GOLO and the scientists from around well
Speaker 1: and what the best practices and and the best in
Speaker 1: its public health. And of course we will follow whatever
Speaker 1: the rules are wherever we go. Will it be so
Speaker 1: could it be very different what the rules are in
Speaker 1: the US versus over in Europe or will there be
Speaker 1: consistent rules for all of your ships? I think for
Speaker 1: a short period of time there could be some differences,
Speaker 1: and not just US and Europe, but even within Europe,
Speaker 1: even UM within the Caribbean. Over time everyone will get
Speaker 1: to a more probably homogeneous uh kind of thing. But
Speaker 1: but we are prepared that there could be differences and
Speaker 1: one local versus another. As everyone you know is dealing
Speaker 1: with it, you know, the spread is different, and one
Speaker 1: local versus another, the risk is different, and so be honest,
Speaker 1: and it could be some differences. So talk to us
Speaker 1: about the business update today, Arnold UM, your stock popped
Speaker 1: on the news and did finish off its ties. But
Speaker 1: nonetheless definitely caught the attention of investors along with the
Speaker 1: CDC News Summer of one. I know you gave some
Speaker 1: of an update on that talked us a little bit
Speaker 1: more about what you expect how it plays out here. Well, again,
Speaker 1: we're optimistic that sometime during the summer twenty one, hopefully
Speaker 1: in July, will we will be able to begin sailings
Speaker 1: from the US, but we are already will be sailing
Speaker 1: from multiple places around the world, again a limited basis.
Speaker 1: A few ships that reintroduction is don't to be staggered
Speaker 1: initially will have relatively low occupancy by design, so our
Speaker 1: crew gets used to the protocols that have to be
Speaker 1: in place, as we did in the past few months
Speaker 1: with the sailings that have already started with Aida and Costa. Uh.
Speaker 1: And so that's you know, where where it begins. And
Speaker 1: and I think over time, a few months time, if
Speaker 1: things continue the trajectory they are with regards to the
Speaker 1: global management of this pandemic, then we might be able
Speaker 1: to see more ships, maybe the entire fleet, and higher
Speaker 1: octancy ownerships as our crew you know, gets used to
Speaker 1: managing the new pro new protocols. I am also curious
Speaker 1: about right now. Love the experiences, Carol, People love the
Speaker 1: experiences that we had on um U in the sales
Speaker 1: we've passed so far when yours the highest net promoter scores,
Speaker 1: which is running the cases we use for guest satisfaction
Speaker 1: that we've ever had and so UM so you know,
Speaker 1: we can give people a great cruise experienced, even with
Speaker 1: enhanced protocols and um And keep in mind you we've
Speaker 1: we've had to deal with things in the past. You know,
Speaker 1: there's Zebola, Zeka, murder Stars, you know, all these different viruses.
Speaker 1: We sail global around the world and we've had to
Speaker 1: deal with things. This one is definitely you know, obviously
Speaker 1: it shut the whole world down, so it's it's it's
Speaker 1: a different but we've learned a lot and science has
Speaker 1: come a long way in the vaccines and everything. So
Speaker 1: we're in much better shape today than we were months ago. Well,
Speaker 1: I wanted to ask a little bit more about Europe
Speaker 1: UM and Costa. You guys do a big business over
Speaker 1: there with that brand. Our bookings continuing to tick higher.
Speaker 1: What are you seeing in terms of trends? Well, as
Speaker 1: we said on our earning stall today, our business update
Speaker 1: UM called today in the UK. We announced three brands
Speaker 1: with sailings in July in the UK, Q and R
Speaker 1: Piano and Princess UM. In each case UM they had.
Speaker 1: Princess had its highest single day booking when we announced
Speaker 1: second highest ever UM and and bookings in a in
Speaker 1: a given day. UH Piano you know, had their highest
Speaker 1: and like seven years UM and qin art Um had
Speaker 1: its highest UM in many years, in a decade or so.
Speaker 1: So there's clearly pent up demand UM and people want
Speaker 1: to cruise a lot of repeat cruises. We've missed out
Speaker 1: almost on a full year of getting their cruise, and
Speaker 1: their anxious and crews and and people are anxious just
Speaker 1: to get out period of course after the lockdowns and everything.
Speaker 1: So the demand is strong and robust and we're able
Speaker 1: to make those analysis in the UK knowing we're gonna
Speaker 1: sail UM in a way that serves the interests of
Speaker 1: public health. Similarly, you asked about constant In particularly and
Speaker 1: aida Um and we we see, you know, good demand.
Speaker 1: One of the challenges for Costa and aida is Um,
Speaker 1: particularly Costa is that mainly you're sailing around it's Italians today,
Speaker 1: sailing around Italy, around Italian ports and and so uh,
Speaker 1: you know, that's not the most desirable itineraries for the
Speaker 1: mass of kind of Europeans, but it's still a great
Speaker 1: itinerary and people are enjoying it. And in terms of
Speaker 1: you know, as we've seen, um, the vaccines becoming much
Speaker 1: more widespread here in the United States. I know you
Speaker 1: gave an update in terms of bookings in the US.
Speaker 1: What's been that uptick? Have you seen kind of a
Speaker 1: direct correlation Arnold, as more and more people are getting
Speaker 1: vaccines at who are signing up? In terms of bookings
Speaker 1: for for trips on your ships, you know, you know,
Speaker 1: our bookings have been robust throughout UM we look into
Speaker 1: twenty two, UM, second half of twenty two and into
Speaker 1: twenty three, even the first half of twenty two were
Speaker 1: well ahead and the upbrand of the range of historical
Speaker 1: ranges foot bookings at this point in time, and and
Speaker 1: and with strong pricing still a fantastic value for people
Speaker 1: relativity equivalent land based vacation, but pricing has been good
Speaker 1: and so um we haven't seen any enhancement to that
Speaker 1: because of vaccines or anything. But it was pretty strong
Speaker 1: to begin with and it has continued to be strong
Speaker 1: and vaccine passports. I think you and I've talked about this,
Speaker 1: not something that you do. You think it's a good idea. Look,
Speaker 1: I think, UM, you know the personal liberty issues and
Speaker 1: all that I leave to UM people with a higher
Speaker 1: pay grade than I do I have, but I would
Speaker 1: say that I think, you know, people getting the vaccine
Speaker 1: is important. UM. I would encourage everyone to get a vaccine,
Speaker 1: and that I would absolutely say it's important, UM. In
Speaker 1: terms of the personal rights and disclosure issues. You know,
Speaker 1: we've all travel what we had to show we had
Speaker 1: a particularly amunization and or a country and that sort
Speaker 1: of thing, and so we'll see how all that plays out.
Speaker 1: But the world will come together on that and make
Speaker 1: a decision UM, and we'll take advantage of that. Whatever
Speaker 1: they decide, will comply and and make sure our guests
Speaker 1: are honoring that if we take them anywhere. But I
Speaker 1: think the more important thing, the most important thing is
Speaker 1: that people do get vaccinated. UM. If they have access,
Speaker 1: they should, they should get the vaccination. And I would
Speaker 1: encourage them to do that because it is the one
Speaker 1: too in the two kit that can really mitigate the
Speaker 1: risk for you having a serious effect if you do
Speaker 1: come in contact with COVID. Hey just got about a
Speaker 1: minute or so left. UM, I'd be remiss if I don't.
Speaker 1: And I often do ask you about leadership. Um, there's
Speaker 1: a lot going on across the country in terms of George.
Speaker 1: I think about voting rights and CEO is being asked
Speaker 1: to step up. What's your position on this and what
Speaker 1: do you think CEOs in that state need to be doing. Look,
Speaker 1: as the CEO of Carnival, UM, my priority has to
Speaker 1: be safely returning my fleet to full guest operations in
Speaker 1: a way that serves interests of public health. As a
Speaker 1: black person who grew up in the segregated South during
Speaker 1: the civil rights UM sixties, I am deeply aware and
Speaker 1: and although I can never fully appreciate, I am deeply
Speaker 1: aware of the incredible sacrifice is suffered by so many
Speaker 1: black and white and brown and more to ensure the
Speaker 1: opportunity for me to vote UM, and that I now
Speaker 1: enjoy as an American. I feel a personal responsibility to
Speaker 1: honor those sacrifices and never stand silent if I see
Speaker 1: that the most basic of rights in our democracy, the
Speaker 1: right to vote, is being denied to our suppressed fathers.
Speaker 1: And so you know, I did sign um uh, the
Speaker 1: notice and the and the call for action for as
Speaker 1: an individual. I signed it as a citizen, as an American,
Speaker 1: I signed it um and as a black person. And
Speaker 1: I believe in it because I think, you know, there's
Speaker 1: no more fundamental right in democracy than the right to vote.
Speaker 1: And people have given their lives for the right to
Speaker 1: vote for all of us, and I think it's really
Speaker 1: important we stand up forgive me, I've got to wrap UM,
Speaker 1: but I'm so glad we were able to talk to
Speaker 1: you about that. And thank you for putting up with
Speaker 1: my home setup. It's just kind of the world we're
Speaker 1: living in. UM, Thank you so much, really appreciate it.
Speaker 1: Arnold Donald. He's the CEO of Carnival Corporation.