The cruise industry in troubled waters

4 min reading time

Published on 02/04/20 - Updated on 17/03/22

Cruise ship

Virtually all cruise ships are currently at a standstill, moored to the dock, suffering the full force of the Covid-19 storm that is raging around the world. The companies, caught off guard, are adapting and organizing themselves in the hope of a resumption of activity for the summer season.

The world followed the tragic fate of the Diamond Princess of Princess Cruise in February. The cruise ship was the focus of attention when the first cases of Coronavirus were diagnosed on board, before it spread and infected about 700 people.

In addition to the rapid spread of the virus, the ship with its 3,700 passengers also had to endure quarantine by the Japanese public health authorities before finally being able to disembark at the port of Yokohama and complete the difficult journey.

This striking episode has heavily impacted the image of the cruise industry. Princess Cruise finally suspended all its cruises on its 18 ships for a period of two months in mid-March. Others will follow suit, temporarily ceasing their activity, waiting for the return to calm after the storm of Covid-19.

This is an entire industry which, like the airline sector, is facing numerous cancellations, refunds or credit notes to be claimed at a later date. The Syndicat des Entreprises du Tour-operating (Seto) and the Entreprises du Voyage (EDV) in France recommend that as of 16 March, all travel should be postponed "for customers who have booked a package tour, and for all departures up to and including 31 March", with the possibility of issuing a "credit note" valid up to and including 31 December 2020, and even beyond.

But most cruise lines will even go beyond these recommendations, going so far as to postpone cruises scheduled for May. MSC Cruises has announced that it will postpone all scheduled cruises until May 29, 2020, based on the French March 25, 2020 order, which allows companies to "give [...] as much time as possible to postpone their booking on a future trip". Similarly, Ponant announced that it would cancel all its cruises from mid-March to 19 April, beginning, like its colleagues, unprecedented repatriation operations with the help of embassy-approved airlines. The company announced the disembarkation of 1,500 customers in the space of only ten days.

In the United States, which has the world's largest cruise ports (Miami, the Everglades and Canaveral) and the largest market (11.9 million passengers in 2017, far ahead of China, which is the second largest market with 2.4 million), it is the private sector that is taking action. The sector, which provides 421,000 jobs and $53 billion to the country across the Atlantic, has announced a temporary and voluntary suspension of all activity in the country's ports from March 14 and for the next 30 days. At the origin of this statement, the International Association of Cruise Companies (CLIA) explains that this decision was taken "voluntarily" while all the actors are trying "to face this public health crisis" (Kelly Craighead, CEO of CLIA).

But the Association is already looking ahead towards the post-crisis period, as Adam Goldstein, President of CLIA Global, explains:

During this time, we will continue to work with the CDC (Centers for Disease Control) and others to prepare for resumption of sailings when it is appropriate. We know the travel industry is a huge economic engine for the United States and when our ships once again sail, our industry will be a significant contributor to fueling the economic recovery.

On the European side, which welcomes 7 million passengers every year, the industry is also at a standstill. The evolution of the industry is nevertheless uncertain for the coming weeks or even months, with travel restrictions in most EU ports. The industry is also likely to suffer a loss of revenue if the ban on travel to the Schengen area countries (and the entry of travellers from the region) is not lifted by US President Donald Trump this summer, since the country is among Europe's top source markets.

The lack of continent-wide coordination, communication and collective action makes it difficult to provide a medium-term vision for the future of the sector in Europe today. The challenge for the sector will therefore be to organise itself quickly in order to ensure the sustainability and continuity of the activity for the summer season, which should normally start next May.

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