Following the news that top bosses at Royal Caribbean Cruises are taking six-month pay cuts amid the coronavirus (COVID-19) crisis;
Ben Cordwell, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers his view on the situation:
“The current COVID-19 outbreak is putting enormous financial strain on all companies operating within the cruise sector. A complete halt to on-board revenues, combined with a vast reduction in bookings, has led to businesses trying to cut overheads and raise finances at any opportunity.
“Chairman and Chief Executive of Royal Caribbean, Richard Fain, has agreed to not take his base salary, estimated to be worth more than $1m, while other top bosses within the company have seen their salaries reduced by 25% until 30th September.
“Strong leadership is critical in the current predicament and by taking significant salary reductions Royal Caribbean is leading by example. It would not come as a surprise to see more businesses follow suit in the weeks to come as finances become further stretched.
“Royal Caribbean has agreed a $2.2bn loan facility, whilst Carnival Corporation is rumored to be raising up to $7bn. However, it appears that obtaining funds alone will not be enough as companies are now trying to cut costs within the business.”