When Will Cruise Lines Resume Service?

 

Published: January 4, 2021 - 12:01 AM

Princess Ship at Sunset

The Restart of Cruising is still a way off as cruise lines try and develop an approach to return to service.

Some cruise industry professionals and travel agents got excited in the last 2 months with the announcement by the Center for Disease Control's rules identifying the conditions that MUST be met for cruise lines to resume service. This news was then followed by the return of some cruise ships from Europe to the US (specifically Miami).

The CDC guidelines and repositioning of cruise ships, was followed by a substantial rise in cruise lines stocks and 2 vaccines were announced to combat COVID. All good news, but really any optimism that cruising will return any time soon is based on nothing more than people's emotions and no real facts.

First, the CDC rules for cruise lines to return to service are a MASSIVE undertaking to be compliant. If the rules were easy the cruise lines would have started up again. Based on the rules, there are many financial impacts should there be an outbreak of COVID on a cruise ship. The cruise line is required to have arrangements with local hospitals to tend to the ill. Pay to fly those with a clean bill of health home on a private or chartered transportation. Should there be an outbreak or even a single case the cruise MUST be immediately canceled. The additional bad press is devastating to an already damaged industry. There is extensive work to create a social distancing experience, modify the onboard experience (buffets, entertainment, lower occupancy levels) and staffing / training a new crew. This is not a slam dunk for the cruise lines to return to service from the US.

The ships returning to Florida is a matter of trying to locate the best possible ships closest to the ports where cruising is most likely able to restart. So Carnival bringing 2 of their ships back to the US aligns with their plans to restart from Miami and Cape Canaveral. It should also be noted that Europe is cold during this time of year and ships need to be relocated to ports which help minimize the decay of a ship in layup. The warmer climate is more suitable and I am surprised that more cruise lines have not moved their ship to warmer climates. My only explanation is that European counties (Germany and Italy) had restarted cruising (but in now paused due the latest spike in cases) will most-likely restart before other counties so keeping some ship in Europe will allow the cruise lines to start earlier in Europe for European travelers.

The rise in cruise lines stocks has me perplexed since there are no immediate signs that operations will return to normal. The re-start has been slow with a small number of cruise lines permitted to sail from Germany and Italy (with only German or Italian Citizens) - but those cruises have been put on hold - temporarily with the latest spike in COVID cases. Cruise lines are still losing money on a grand scale and the return to service is uncertain. The extra precautions, sterilization procedures, sanitizing systems, air filtration system and operating at 1/2 capacity are all extra costs / expenses that need to be operationalized. In addition, cruise lines are still accepting new ships that were all on order prior to the COVID outbreak whose construction was too far along to be cancelled or delayed. In addition, some ships are facing a long term lay-up and the cruise lines have been forced to raise cash to stay alive by selling ships, taking out additional mortgages on existing ships, finding investors and/or offering additional stocks/bonds to raise cash.

The vaccines are good news, but since they are voluntary and there is still a portion of the population who are deciding to not take the vaccine - how will cruise lines handle this? Those opting to take the vaccine may find some level of comfort that they are protected and therefore be willing to take a cruise. It is still too early to see. Regardless vaccine / no vaccine - you will still be required to social distance and wear a mask on a cruise ship for the foreseeable future.

Another real issue is what ports are ideal to resume service from. What ports are open and willing to allow cruise passengers to disembark? Miami / Port Canaveral are ideal start up ports since all of the various cruise lines private island are with 100 Miles of Florida. I would not be surprised if the first cruises sail only to private islands and did not sail to locations where resident's health can be compromised. This will be extremely challenging for ports like New York, Boston, Baltimore and others - where private islands not within striking reach overnight.

In my opinion I do not anticipate that cruising will return to the United Stated until October, 2021 (the earliest). When it does return, it will be very limited and restrictive. In addition, secondary cruise ports like, New York, Baltimore, Boston, Seattle and Vancouver will probably be restarted in a subsequent phase and not part of the initial launch. If any cruise lines attempt to sail from New York - I predict that Norwegian Cruise Line and/or Royal Caribbean would be most-likely candidates to restart from the port. The benefit of cruising from New York is the large potential passenger base available to fill the ships - including New York, New Jersey, Connecticut, Pennsylvania, Massachusetts and Washington DC. In addition, the metropolitan area has the infrastructure for the cruise lines to meet the CDC Guidelines. Only time will tell but I am sure Corona still has some curve balls that will be thrown our way.

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