Norwegian Cruise Line Holdings Ltd. (NCLH) Earnings Call Transcript & Summary

[Audio Gap] Chief Sales and Marketing Officer for Regent Seven Seas Cruises, and I'll be moderating our conversation today. Thank you for joining us for what I'm sure will be a fruitful and informative discussion with Dr. Scott Gottlieb, former Commissioner of the U.S. Food and Drug Administration and Chairman of the Norwegian Cruise Line Holdings, SailSAFE Global Health and Wellness Counsel. Dr. Gottlieb will provide an update on the state of the pandemic as well as answer some of the questions the audience have submitted. But before beginning our conversation, I'd like to hand the call over to Frank Del Rio, President and CEO of Norwegian Cruise Line Holdings for a few opening words. Frank?

Thank you, Andrea, and hello, everyone. It's a pleasure to be with you again today. For those of you who attended our first fireside chat with Dr. Gottlieb, you know as much as I that the world today is in a much different and, dare I say, a better place as far as the pandemic is concerned than we were back during the mid-January peak. The prevalence of COVID and the Omicron variant has significantly decreased across the globe, and there has been a discernible shift in the psyche of how we are living our daily lives amidst the virus. That's not to say that the pandemic is over or that our brands have stepped back on our strong commitment to health and safety. Far from it. We were the first operator to have all its brands opt into the CDC's voluntary program for ships operating in U.S. waters, even when the protocols were still in flux, and we reaffirmed our commitment in mid-February when the program was finalized. Our protocols exceed those set by the CDC in several areas, with 100% vaccination of crew and for each and every guest sailing on our Oceania and Regent brands. We continue to consult with Dr. Gottlieb in our SailSAFE Wellness Counsel. And with the rapidly improving public health environment, Norwegian, effective March 1, is allowing guests under 12 years of age to sail regardless of vaccination stats, in an environment which we expect to have at least 95% of all guests vaccinated. In addition, we will continue with 100% vaccination of our crew. And by mid-May, we expect every crew member to be boosted as well. This level of protection is much more rigorous and comprehensive than you'd find anywhere on land. As Omicron's prevalence continues to fade and the public health environment continues to improve, society is inching its way back to normal, which is why I'm so glad to have Dr. Gottlieb here today to discuss his thoughts on how he sees the pandemic evolving over the next weeks and months. Before we bring Dr. Gottlieb back on, I'd like to thank the travel agency community once again for their unyielding partnership during these challenging times. It's been an incredibly long and bumpy road, but brighter days are indeed on the horizon. And I want you to know that I am humbled to work alongside a group that is so passionate about what they do and so determined to bring back both the agency community and the cruise industry to its former glory, and I look forward to continuing our strong partnership. And to our loyal guests, I want to express my sincere thanks and appreciation for your continued patronage and loyalty to our 3 incredible brands. I don't want to take any more time for the main events, so I'll hand the call back to Andrea and Dr. Gottlieb. Andrea?

Thank you, Frank. And Dr. Gottlieb, it's so great to be here with you today. We really appreciate you making time to join us for this exclusive conversation with our loyal guests and valued travel adviser partners across our portfolio of 3 cruise lines, Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. As we approach the high-demand summer season this year, really understanding the global public health backdrop will be key for people as they plan their travels, so thank you for your expert insights. But before we begin our discussion, as a reminder, this conversation will address expectations about future events, which are difficult to predict with certainty, and the views presented today are Dr. Gottlieb's. In addition, we will provide a replay of today's event for 14 days following the event.

So let's kick things off. Dr. Gottlieb, last time we spoke in January, the Omicron surge had yet to peak, and your commentary regarding when you thought it would peak and if the public health environment would be in a better place for the all-important summer season was very, very encouraging and, in fact, is coming to fruition, so I'm glad to see that. But can you provide us an update in terms of trends? And how do you feel about if we've reached the inflection point of this pandemic?

Hello, and thanks for having me today. Look, when we spoke last, we talked about prevalence would decline very sharply as we got towards the end of the winter into the spring. And I think we're seeing that right now. Prevalence is coming down all across the country. You're seeing a rapid change in policy with respect to governors and others lifting things like mass requirements in schools and public settings. I think that's going to continue. You're going to see a rapid acceleration in withdrawing a lot of measures that we had in place to try to deal with the epidemic peaks. And I think prevalence is going to continue to decline. Right now, we're at about 19 cases per 100,000 people per day. Typically, the metric that you use in terms of assessing prevalences, how many cases, per 100,000 people per day. Anything below 10, historically, was perceived as very low levels of prevalence. We're not quite there yet, but we're also in a different environment right now where we have a variant that's far more contagious, Omicron. We have a population that has far more immunity against COVID, and we're doing a lot more testing. And so we're probably going to pick up more infections, and those infections are probably going to be less consequential on the whole than what it was last year or certainly 2 years ago. So being at 19 cases per 100,000 people per day is pretty low prevalence. I would expect that to continue to decline. I think by the end of this month, we'll probably be closer to 10 cases per 100,000 people per day. And I think that's going to feel pretty normal around most parts of the country. You're going to see people going back into restaurants, people back -- going back into congregate settings. Kids going to school without masks, which they are doing now in most parts of the country, almost every part of the country. And it's going to feel pretty normal again, which is good because I don't think we felt normal again for a long time now. I mean there was a brief period last summer where prevalence got low, and then Delta started to emerge. In terms of the -- just the trajectory and the outlook and whether or not something is going to come along that's going to sort of wreck this outlook. I think it's becoming less and less likely that we're going to see these sort of successive waves of infection from new variants. And that's because we've seen a pretty large degree of the genetic diversity of this virus and the sort of repertoire of this virus and how it can mutate in ways to become more contagious and evade the immunity that we've acquired. And it doesn't mean that you can't get a variant that comes along, that creates another wave of infection. But I think that really is the tail risk. That is the sort of unlikely scenario. And the more likely scenario and a far more likely scenario, I believe, is that Omicron becomes the dominant lineage, that Omicron will continue to evolve, and we'll probably have to update our vaccines over time like we do for flu and be vigilant when we get into sort of peak respiratory seasons. But that this will evolve into a more seasonal virus, and its overall impact on society is going to start to diminish as a result of higher degrees of immunity that we've all acquired, more therapeutics. And just more awareness, generally. I think we're going to be more careful around the risk of respiratory diseases, particularly in the wintertime when these things are going to be most likely to spread. But sort of to sum up, I think that we're likely to have a quiescent spring and summer. It's likely to be pretty low prevalence. I think people are going to be looking to get back to doing things that they enjoy and feel relatively comfortable doing it. Most people are vaccinated. A lot of people have been infected. A lot of people have been infected and vaccinated. And so people have a high degree of immunity at this point and are pretty well protected from bad outcomes. Certainly, people who want to be protected from bad outcomes now have the opportunity to do that.

Yes. It has been a very interesting couple of years. This virus has really surprised us over and over again. So I want to talk just for a moment about sub-variant. So with Omicron there was BA.1 and then there's BA.2. What do you feel the chances are around us seeing a second wave?

Yes, certainly not from BA.2. I don't believe that's going to be the case. And so BA.2 is -- some people think it's a new strain of COVID, some people think it's a sub-variant of Omicron. I think the conventional way is that it's a sub-variant of Omicron. What we've seen is that BA.1 is the virus that became epidemic here in the U.S., but BA.2 is slowly increasing in prevalence. When you look at other parts of the world, where they had big waves of BA.1 and BA.2 started to spread after BA.1, BA.2 eventually became the dominant strain. So in South Africa, for example, where Omicron first emerged, they had that huge wave with BA.1. BA.2 emerged a little later. And now if you look at their infections, 100% of their infections are BA.2. So it's completely taken over. But it didn't create another surge of infection. It's 100% of a very low level of infections. It just sort of supplanted BA.1 because it's more contagious. It doesn't appear to be any more virulent, meaning it's no more dangerous, but it does appear to be more contagious. I would expect a similar thing to happen here in the U.S., that slowly over time BA.2 is going to take over and become the more dominant strain of Omicron, and that's what we should be sort of preparing against if we're thinking about new vaccines and things like that. But it's not going to create another wave of infection. You're going to see infection levels to continue to come down and slowly, over time, BA.2 is going to become a higher proportion of whatever the low level of infection that we have is until it more fully takes over. There was one study that came out of Japan that created a round of headlines about 2 weeks ago. It was a study done in rodents, which suggested that maybe BA.2 is a more dangerous pathogen than BA.1. It was a well-done study, and that's why it got a lot of pickup in the media. But the reality is we now have a lot of real-world evidence. We have evidence in humans about how BA.2's behaved coming out of South Africa and also the U.K. and Denmark, where there's been very good studies. And there's really nothing that suggests that BA.2 is a more dangerous strain of Omicron. It's just slightly more contagious. And the other piece of data that's important, and there was a study that came out of [ gutter ] just this week shows that the immunity that we get from BA.1 protects against BA.2. And that's why I think you're not likely to see a big wave of infection with BA.2 in the U.S. We've had such a high level of infection with Omicron here in the U.S. So many people have immunity against Omicron and that immunity is going to be durable and is going to be protective against BA.2. That it's just hard to envision BA.2 really getting a foothold here in the U.S. And that's in fact what happened in South Africa. They had the big surge of BA.1, and BA.2 really couldn't get a big foothold and create another wave. It's what happened in the U.K., where they had a big wave of infection, BA.1. By the time BA2 got in, it was sort of too little too late. I think the same thing is going to happen here that we're probably about 50% of the population has been infected with Omicron, maybe more than that at this point, if you look at some of the estimates. And it's just too many people with immunity against Omicron generally for BA.2 really to create a sort of infection. So I don't think this is going to be it. The risk to the future is the unknown. That there's something out there somewhere that's going to emerge within time and it's going to be highly contagious to be able to pierce the immunity that we've acquired and create another wave of infection. Why I think that -- that is the tail risk, anything is possible. But why I think that becomes less likely is because we have so much immunity at this point. We've been vaccinated. We've been infected with Delta. We've been infected with Omicron. And so we've seen a very broad range of what this virus can do. And eventually, this virus is going to slow down its ability to mutate. It's going to slow down its ability to sort of find ways to evade our immune system. It's shown us already a lot of its genetic diversity and the repertoire what it can do. So it becomes less and less likely that something could come along that can just sort of raise through the population and pierce all that big tall wall of immunity that we have and create another big wave of infection. Not impossible. And -- but I don't think it's the base case anymore. I think the base case is that we will see sort of low prevalence through the spring and the summer. This will start to reemerge in the fall and the winter because it's a respiratory pathogen, but we're going to be in a much better position to deal with it. Not only have vaccines widely distributed, not only have much more immunity against it, so hopefully reduced its overall impact to society, but also have widely accessible therapeutics. I mean the therapeutics is going to be a big part of the story. They haven't been to date because you've always had limited supply. We're not going to be in a situation where there's going to be limited supply in the future. These will be readily accessible, both the oral drugs as well as the antibody drugs.

Yes. I want to touch on that in a moment and talk about the therapeutics, but I want to go back to something that you mentioned earlier on. So when you think about the past couple of years and everyone is just really waiting for that day to go back to more of a normal time frame, I want to switch our focus on the COVID-19 restrictions. So I know in February, you actually called for the CDC to adjust COVID masking mandates. I also saw a piece that you wrote in Time about how Americans are still living with the 2020 attitude toward COVID-19 risks and how you feel that really needs to change. It was great news on Friday that the CDC loosened mask guidelines around this Omicron surge as it subsides. But how do you think the evolution of COVID-19 restrictions will impact, really, the sentiment towards travel and getting back to normalcy?

Well, look, I think that these restrictions are going to be lifted as we get into the sort of spring and certainly, in the summertime, I think you're going to see them lifted more broadly. I think you're going to see requirements to get tested for traveling into the U.S. from Europe get lifted. I think you're going to see requirements for masking in public transportation get lifted. That doesn't mean that some people aren't going to still make decisions to wear masks. One way masking, if you're wearing a high-quality mask can afford you a degree of protection, but I think that these things are going to be voluntary as we get into the spring and the summer. And you're seeing that around the country. You're seeing a lot of governors lift these mandates even in advance of the CDC making the change. And the CDC's change was consequential, not only because of the recommendation around masking change, but they came up with a new measure of risk and prevalence. They went away from just looking purely at cases, and they're moving towards measurements of impact and specifically hospitalizations. And so as they look at impact, if you sort of believe my thesis that COVID is going to have less impact on society over time because we're just going to be better able to deal with it, you're going to see less hospitalizations. And if that's what CDC is looking at to make decisions around implementing public health guidance, things like mask requirements, you're not going to get to the levels of hospitalization as easily in the future because fewer people are going to be hospitalized because more people are going to be protected against the infection. So I think that you're less likely to see these kinds of mandates get put back in place. Could you have a period of time next winter when you have peak Omicron season and peak flu season at some point in December, where there's mask ordinances put in place, in certain cities where there's particularly high prevalence for a 3- or 4-week period. I think that, that's kind of the regime we're moving to, where these will be used as temporary tools if they're used at all to deal with the peaks of epidemics and not become things that are put in place sort of in perpetuity and kept in place too long. And that really was my lament in the Time Magazine article that was that we turned things on, but we were very slow to turn them off. And there was a lot of sort of policy and political reasons why there was a reluctance to turn things off. One of which was that once you take something away, it's hard to re-implement it again. So public health authorities always had a reluctance to peel back these things too early. But I think you're going to see a more flexible doctrine in the future if, in fact, these tools need to be used again to deal with epidemic peaks. And as far as sort of the near-term trajectory, I think that you're going to see a continued evolution of the restrictions being lifted. And eventually, I think that they're going to be lifted on public transportation, too.

Yes, that was my next question for you. We've seen that kind of extend a couple of times right now, that mask requirement is through March 18. Do you think that will evolve? And do you think that should happen sooner than later as you see everywhere around the world starting to evolve?

Yes, I would expect that come March 18 or sometime before then, there's going to be an announcement from the administration about that. I mean, obviously, we're going to have to put out some kind of announcement. My expectation would be, and this is just sort of my gut, that they're going to extend that, but it's going to be a time definite. They'll say something like we are extending the mass requirement, public transportation for another 2 weeks or another 3 weeks, but it will be a clear off-period. And the reason I think they're going to do that is I think that they're going to want to wait until the whole country is green. Right now, about 70% of the country is in that low prevalence range. But I think that is probably going to be the end of April before you see the whole country in that low prevalence range and you get to somewhere around 10 cases per 100,000 people per day. I think they're going to want to wait until the whole country is in that range before they lift that requirement. But all the modeling suggests that we'll be there by the end of March. And there's nothing at this point that's going to disrupt that. I mean, you'll see probably a little bump-up of infection in cities that have lifted all the requirements, but it won't change the overall trajectory. I mean the overall trajectory is down, you'll see sort of a flattening out, maybe a little bump-up in some places because people are going out again, people are going to restaurants again, people are taking their masks off again. So you'll get some spread from that. But I think by the end of April, the whole country is going to be in that low range. And so I would expect them to say sometime like March 15, we're extending the mass requirement in public transportation for another 2 weeks or another 3 weeks, something like that. But we'll know when it's getting turned off and it will get turned off by the spring.

Yes, I think that will definitely be welcome. And having a definitive time line, I think, puts people at ease to make their travel plans. So...

The other thing I would say, also, is that one way masking works. The sort of virtue of having everyone in masks is that people are less likely to spread the virus if they have a mask on and they're less likely to catch the virus if they have their mask on, particularly if they have a high-quality mask on. Cloth mask, as we've talked about, isn't affording as much protection. But if you're someone who is on a train or on a plane and you have a heightened level of vigilance or concern, if you wear a higher-quality mask, having a mask on is going to afford you a high degree of protection as long as it's a high-quality mask. So one way masking can work as long as it's a good quality mask. So even as -- some people, a lot of people want these mandates to be lifted. Some people don't. Some people feel more -- feel safer in these environments wearing a mask, but you can still afford yourself a high degree of safety through masking as an individual is if you're wearing a high-quality mask. And I think the final thing I'll say is I think we've gotten to the point in our society now that -- if you're the sole person wearing the mask on the plane, no one looks at you strangely anymore. I mean masks have become normalized. I think you're still going to see a lot of people, even in environments where masks aren't required, still wearing masks when they're in a [ public ] setting because people feel more comfortable wearing a mask now, particularly as we get into the colder months.

No, I absolutely agree. Okay. So I wanted to switch topics again and go back to the therapeutics. So there's this game changer in the pandemic, right? And it's really about the advanced therapeutics and how that will kind of change the evolution of how we do get back to more of a normalized environment. So I know Pfizer's Paxlovid is -- it's been out of reach, really, throughout the Omicron wave. As cases are plummeting, and you kind of alluded to this earlier, are you seeing supply starting to really meet the demand? And how does that change the outlook for the pandemic?

Yes. And as you know, I'm on the Board of Pfizer, I'm not speaking on behalf of Pfizer here. Supply is going to -- supply is increasing sharply. Pfizer has talked about the supply estimates in terms of how much they're going to be produced and produced over the course of this year. Supply grows significantly as each month goes by over the course of the year. And right now, demand is declining because there's just less COVID overall. I think that as we get into -- certainly, as we get into late March, but by the time we're in April, I would expect this to be readily accessible. That if you are diagnosed with COVID and you want to get access to this therapeutic or the monoclonal antibodies for that matter, you will get access to it. That -- this isn't going to be a function of having to call around to 6 pharmacies and not be able to find the drug, which is what happened during the Omicron peak. I mean what happened was the drug was new. Supply was just coming online, and we were at sort of peak demand because we were in the middle of the biggest wave of infection probably in modern history. I mean, we have never seen an infection that infected 50% of the population in 2 months, which is basically what happened with Omicron. So you have the excessive demand and you have limited supply. That's not going to be the case. And as we get into this into the year, as we get into next fall and winter, I think these are going to be readily accessible. The announcement that the Biden administration recently made trying to maintain a long-term supply of these therapeutics is going to be part of that. I think they're investing to make sure there's excess manufacturing capacity and excess supply. So I don't think we're going to be caught in a situation where we don't have tests available, we don't have drugs available. Again, the only thing that could change that is if you have a strain come along that suddenly the existing tests don't work, they can't detect it and the existing drugs don't work. I think that's very unlikely. Again, every time I say something is not going to happen, things happen. But I think it's very unlikely because the tests are testing for preserved regions of the virus that are less likely to mutate. And the drugs target parts of the virus that are less likely to mutate. In the case of Paxlovid, it targets the protease, which is an enzyme that the virus uses to replicate. It's a very core part of the virus' machinery. And if the virus were to change its protease, which it could do, but it probably becomes a less effective virus. And final point here is there's other therapeutics in development. These drugs that we have now will not be the final word on drugging this virus. This is a virus that should be relatively easy to drug, will have better therapeutics, including -- Pfizer is working on a second-generation molecule, but there's other companies also working on drugs. I think that we'll see continued evolution in this COVID space and continued new and better therapeutics coming onto the market over time.

No, it's really great to continue to see the evolution. I think consumers will be a lot more at ease knowing that they can treat it -- the vaccine and the therapeutics combined really puts us in a much better situation. I know Frank does have a couple of questions. But before I turn it back to him, I have one last question for you. Are you ready for your cruise this summer? So are you still feeling in a good place? I mean it sounds like the stars are aligning, and we're in a really good place in terms of the direction of the pandemic, especially the time frame of where the summertime is falling. How do you feel?

Yes, I'm looking forward to it. Thanks for asking. Yes, so I'm going to be taking a cruise with my kids and my family and another family that we're friends with. I'm trying to convince my parents to come as well. I feel very confident. I think that we're going to be in an environment where prevalence will be low, looking forward to getting back to a semblance of normalcy. This summer, looking forward to cruising again. As you know, I used to take cruises. I haven't in a while, but I'm looking forward to doing that this summer. So thanks for asking.

Awesome. So let's bring Frank back. I think he has a couple of questions that he'd like to ask as well.

Morning, Scott. Thanks for all those insights. I know you and I talk often, and you reiterated many of the things that you and I talk about. But I do have a couple of questions that I think the audience would be interested in hearing. The first one has to do with vaccines. We've talked about that today's vaccine behaves more like a reducer of severity in the event that you get it as opposed to preventing you from getting it. Is there work underway by the major pharmaceutical companies to come up with a real -- what I would call, a real vaccine that prevents you from getting the -- that preventing you from getting COVID to begin with?

Yes. I mean the flu vaccine performs not as well as even this vaccine. I mean the flu vaccine reduces your chance to getting the flu this season, but what it's really doing is reducing a chance of getting sick from that flu. The COVID vaccine, particularly someone who's had a booster, is still affording a pretty high degree of protection. I think kind of a rule of thumb, the data is -- I don't want to say all over the place, but there's different studies that kind of suggest different things. I think the rule of thumb is that the vaccine affords protection that's 40, 60, 80, and maybe a little bit better than the 80. What I mean by that is if you've had the booster and you're within 6 months of the booster, you have probably 40% protection against infection, 60% protection against symptomatic disease and probably 85%, 90% protection against severe disease and hospitalization, maybe even a little better than that. So to your point, the real measurable protection of the vaccines affording right now is that protection against severe disease and hospitalization. But it's still affording a degree of protection against any infection or symptomatic infection. I think what we've come to learn is that the amount of protection that's affording us infection, symptomatic infection is a lot less than what it was doing at the outset. I mean, in the beginning when we were dealing with the Alpha variant, the vaccine was like 90% protective against infection. So it became a tool not just to prevent people from getting sick and getting really sick, but to actually prevent spread. It's no longer as effective, to your point, of a tool for preventing any spread, but it's still a very effective tool for preventing severe disease. Yes, the companies are working on new vaccines, including Pfizer. Pfizer is going to have data on Omicron-specific vaccine in March. So we'll see how a vaccine that's formulated specifically against Omicron behaves. The company is overall also working on vaccines that will provide a more durable response. And so one of the things that we've seen is that the immune protection from these vaccines wane over time. The protection against severe disease and hospitalization seems to be persistent because you're eliciting different components of the immune system. You're eliciting B cells and T cells that have memory. But the protection against infection, which is dependent upon how many circulating antibodies you have in your blood, that diminishes because those antibodies eventually go away. So you lose the protection against the infection, but you retain the protection against the severe disease. So the companies are working on formulations that the hope is will give you a more sustained antibody response, so you'll have more protection against infection for a longer period of time. So we're going to see continued innovation in this space. There's no question about it. The decision about when we ultimately switch over to a new vaccine, what the threshold for making that decision is hasn't really been worked out. But I think, over time, you're going to see these vaccines get reformulated. And I think at least for the foreseeable future, for most people, not for everyone, but for most people, this could very well be an annual vaccination, like the flu. Until we get out of -- until we're sort of fully in an endemic phase with this virus and we see how it behaves over time, and hopefully, it has less impact on society because we have more immunity to it and it evolves in ways where it becomes less virulent, then we may get into a situation where we don't get vaccinated every year for it. But I think at least for the next 12 months, I think a lot of people are likely to get a booster going into the fall, take them through this fall and winter, and then we'll see where we are in the back end of that.

Scott, you're one of the few people I listen to. So what -- based on what you know today about our business, our industry, how ships are built, the congregate setting on cruise ships, the prevalence, the therapeutics that are going to be available, when do you think you would recommend to us that we no longer have to mandate vaccines to board a vessel, to board our ships?

Yes. Look, I think that it's likely to be a requirement like that is in place through this sort of fall and winter. And I'm talking more about like CDC and the policy environment. I think that the public health official, CDC, is going to want to see what the epidemiology is of this disease when it gets to a "normal state." We have not been in a normal state. We've been in the pandemic, we've had successive waves of infection. The best way to describe what an endemic phase is going to look like is when this becomes more of a seasonal virus, where you don't see spread of a respiratory pathogen in the spring/summer becomes a fall/winter pathogen. And I think CDC is going to want to see what does that look like. And we'll hopefully get our first glimpse of that this year. And this will be -- this is like a transition year. And then they'll make decisions about whether or not they continue to require vaccines in certain settings where they very require it, like cruising. I think they'll make decisions about whether or not this becomes part of the childhood immunization schedule. A lot of people are worried that this will become a mandated vaccines for kids. I think they're going to want to see what the virus prevalence looks like in a kind of normalized steady state before they make those kinds of decisions. So the short answer to the question is, I think this is kind of a springtime thing. I think from a CDC policy standpoint, you're going to want -- they're going to want to make a decision around this after we get through another fall and winter with COVID and see if we're truly in an endemic phase with this. From a kind of like, operational standpoint and how do you protect the environment, I've long said, when we first started working together, I felt that the cruise environment has a lot of virtue in the setting of trying to grab with an infectious disease because it was an environment that you could tightly control. You knew who got in, you knew who got out. You can impose certain measures on the ships to try to control the risk of spread. You can require a testing in a high prevalence environment, which we did. You can require a vaccination in a high prevalence environment where we did. You can pull those things away as prevalence declines, but you can really exert tight control over the setting. I think the part of the answer to your question is going to depend on what is the vaccine, and this gets back to your first question to me. Is the vaccine a tool that prevents people from getting very sick? Or does the vaccine once again become a tool that can actually prevent spread in a congregate setting? If the vaccines get reformulated and all of a sudden they're 90% protective against any infection and against transmission, that becomes something -- that becomes a very valuable tool for protecting a congregate setting. If the vaccine, ultimately, is a tool that prevents you from getting very sick, that becomes something that is less effective at preventing spread, but more of a personal choice people are making to try to protect themselves rather than using it to prevent themselves from spreading the virus. So it's partly going to also depend on the evolution of the vaccine and whether we can reclaim what it was delivering at the outset, which was a very high degree of protection against any infection and any spread.

Yes. Last question I have for you has to do with quarantine and isolation. What the cruise industry has always wanted during this pandemic from public health officials, primarily the CDC, is for us to be treated like every other hospitality sector, right? And we haven't been. I think there's no secret to that. We've been treated very differently, some might say in a discriminatory manner. But they are loosening the reins, so to speak. We saw that now in the new opt-in program that we opted into. But as I talk to consumers, I talk to travel counselors, people aren't so much worried about getting COVID because our customer base is vaccinated. What they're worried about is having to quarantine or isolate because of close contact with someone or if they do get COVID and it's a mild case, so they really have to quarantine, isolate for 5 days or whatever the period of time is. How do you see that evolving over time given the therapeutics, given the high rate of immunity around the world, around our country? Do you think that, that -- those very stringent quarantine isolation requirements that are in existence today? And I agree with you that they're being dropped by, by many places. I just saw a bulletin that the state of Hawaii just dropped all protocols for folks to come into Hawaii, no vaccine requirement, no testing requirement, which is great for our Pride of America vessel there based in Honolulu. But how do you see the quarantine isolation protocols evolving over time?

Look, you've seen authorities dial back the sort of manage requirements for isolation and quarantine in a lot of things. I think that's going to be the continued trajectory. If you look at what the U.K. did, and I think that they're a good sort of indicator of where we're going to be, they've been a little bit ahead of us on some of policymaking, but they've basically said effectively and I'm going to probably misquote the statement they made. But if you have COVID, use your judgment. You should be staying home and trying to avoid getting people sick, but there's no longer sort of a mandatory requirement for isolation. I think this is going to become something like with the flu, where there is going to be an expectation that if you're diagnosed, you stay home until you feel better and you avoid infecting other people. But it's not going to be something that's imposed by public health ordinances. And that's where the policy is evolving. And the other piece of this is, I think there's going to be less mandatory testing. So we're just going to be turning over less mild and asymptomatic infection. So less people are going to find themselves caught in a quarantine or in an isolation situation because they had a mild case or an asymptomatic case if they didn't know they had but they were subject to some testing and turned over that case. And so I think that this is going to become more like the flu, and we're going to deal with it in that way, where there's going to be certain societal expectations. There's going to be a lot of measures. I mean prudent businesses should take measures to make it easy for people to "do the right thing," but a lot of this is going to be expectations put on individuals rather than rules imposed by governments.

Good. Well, thank you very much, Dr. Gottlieb. This was a very timely and very informative conversation like it always is with you. Hopefully, everyone on the call today found Dr. Gottlieb's expert insights helpful and also encouraging and inspiring that we are going to get back to normal. Our businesses are going to come back strong, and our valued guests are going to get to enjoy cruising again. Thank you again for your continued support, everyone, on the call today and for your time. Stay safe and be well. Thanks again.