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Royal Caribbean Cruises Ltd today noted the U.S. government's policy change on travel to Cuba and provided a range for its financial impact.
On June 4, 2019, the U.S. government announced that effective June 5th, 2019 authorized travel to Cuba under the People-to-People program is rescinded and travel to Cuba via cruise ships is prohibited. Therefore, effective June 5th, cruise ships will no longer be allowed to travel between the U.S. and Cuba.
The company has changed the itineraries for its June 5th and June 6th departures and is determining alternate destinations for future sailings. The company's primary concern is for its guests, and the company is working closely with them to offer alternative destinations and compensation for any inconvenience.
The company estimates that the financial impact of this regulatory change is a reduction to the Adjusted EPS for 2019 in the range of $0.25 to $0.35 per share.
"While the affected sailings impact only 3 percent of our 2019 capacity, the extremely short notice period for this high yielding destination amplifies the earnings impact," said Jason T. Liberty, executive vice president and CFO. "The result of this policy change has created a short-term impact to our guests, operations and earnings; fortunately, we have many alternative and attractive destinations for our guests to choose from."
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