ARE CRUISE LINES GETTING READY TO SAIL AGAIN?
Are cruise lines getting ready to sail again? Certainly, they want to get the revenue started again. Royal Caribbean for instance recently disclosed to its shareholders that the company was losing $250m-$290m per month. Earlier in the year, after the CDC shut down all cruises from the United States, there was speculation as to whether Norwegian Cruise Lines would be able to survive. Fortunately for them, they were able to secure financing to get them through this difficult time frame. We have seen various projections from the cruise lines which operate from U.S. ports that they could begin cruising as early as August 1, then it was maybe September 1, then October 1. Each time the cruise lines appeared to try to generate buzz about sailings, then only to retract and say those were prospective dates when the CDC and Corona virus reality would not have permitted early resumption of cruises.
The CDC is still prohibiting cruises from the United States through September 30, 2020. https://www.cdc.gov/quarantine/cruise/index.html That is not likely to change in the near future—the “no sail” order will remain in place until 1. the Secretary of HHS declares that Covid-19 no longer constitutes a public health emergency, or 2. the CDC Director modifies the no sail order.
What is notable is that several cruise lines in Europe have begun to sail again. Two of those cruise lines, MSC (short for “Mediterranean Shipping Company”) and Costa Cruise Lines have begun to sail again in Europe, though in limited scope so far. One thing to note here is that MSC also sailed from ports in the United States before the CDC lockdown. MSC had planned to increase its presence in the Florida market in 2020, including sailing from Tampa. Costa has also sailed from Florida pre-Covid, including from Ft. Lauderdale. It is not a leap to surmise that these cruise lines will want to resume operation in Florida at the earliest opportunity.
Equally, NCL, RCCL, and Carnival have been very vocal about their efforts to upgrade Corona-virus-fighting capabilities while their fleets have been idled by the CDC orders. All three lines have been aggressive in seeking bookings on future cruises, and in trying to convert prior cancellations into future cruises. (Note: Careful to make sure if you have a cancellation that you check your cruise line’s website to know of any deadlines for re-booking a cancelled cruise, or the cruise line could consider the fare forfeited.)
It is clear the cruise lines are ready to begin sailing again shortly after given the go ahead by the CDC. Our best estimate is that it will be after the first of the year before the cruise lines will be allowed to proceed to and from U.S. ports—and we are predicting a Spring Break time frame. There are a couple of variables to consider. One is of course how the virus is being controlled or not at the national level. And right behind that is whether the CDC will lift the no-sail order. Also, the ports of call have something to say about whether they will allow cruise ships of Americans to dock in their ports. But follow the money. There is too much revenue to be lost by having the cruise ships idled for another year. This is one reason we predict Spring 2021 as resumption of cruising as long as the other elements described above fall into place.
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