Photo courtesy Norwegian Cruise Lines/Facebook
Hope that cruising will begin again any time soon has now been all but crushed as it becomes clear the pandemic will be here for months to come.
As the first vaccines started being approved in November and December, there was an expectation that cruising would restart in some capacity within the first quarter of this year. Norwegian Cruise Line began restaffing their ships, bringing back more than 2,000 employees.
But after the CDC laid out its strict requirements for sailings out of the U.S. to relaunch cruising and the outgoing Trump administration failed
to meet its own vaccination goals, the cruise industry quickly sobered up to the reality that cruising in any major capacity is still months away.
Norwegian is now sending the crew they brought on board late last year back home
. The repatriation points to Norwegian recognizing that these crew members won’t be needed anytime soon. To board the ships, the crew had to go through weeks of preparation, testing and quarantining. Now all of that has been in vain, and Norwegian will likely have spent thousands of dollars as crew members go home with no return date in place.
Carnival, Royal Caribbean, Norwegian and Disney have all canceled all U.S.-based cruises through the end of April, but even a May return seems ambitious.
Patrick Scholes is the managing director of Lodging and Leisure Equity Research at Truist Securities; he’s also known for his accurate forecasts within the cruise industry. Speaking with Barron’s
in late January, Scholes expressed doubt that North America’s cruise industry will resume before the second half of this year, going so far as to call July “the best-case scenario for a restart, though the fourth quarter is more likely.” He went on to say it’s possible cruising may not return until 2022.
That’s bad news for cruise lines. Carnival Corporation, the largest cruise operator in the world, is currently burning through more than $500 million per month. Speaking with investors in November, Carnival leadership reassured them
that even if no cruises return this year, the company has “liquidity in place to sustain ourselves throughout 2021.”
Image via Port Canaveral
Carnival new $163 million Terminal 3 at Port Canaveral
Port Canaveral’s CEO, John W. Murray, points to the vaccine
as key to the cruise industry's recovery. The Central Florida port, one of the busiest ports globally, has pushed for diversity in its operations in recent years, including an increase in cargo. This is one reason the port is now able to weather the current pause, though if it continues into 2022, there could be budget concerns.
At the current rate, that’s unlikely to happen thanks to increasing confidence
in the vaccine rollout. The first three months of the year are typically the busiest for cruise bookings. So far, that has remained true this year, but the bookings are occurring later in the year than normal, with bookings at least 12 months out compared to past years. And 2022 bookings already outpace
those of 2019.
To help ease fear of infection on board, some cruise lines have indicated they will require all passengers
to receive a COVID vaccine prior to boarding. Others, including Norwegian, have already begun requiring the crew to be vaccinated
, a move that other industries will likely follow. Some restaurant groups are reportedly looking at the requirement
for servers. In December, the U.S. Equal Employment Opportunity Commission (EEOC) clarified that employers can require staff to be vaccinated, though this has little impact on cruise lines, which typically have foreign workers on board.
Others in the travel industry also seem to believe in the late summer recovery. Many of Cedar Fair’s theme parks won’t open until the end of May
; for most of them, that’s 30 to 60 days later than normal. California’s theme parks are also not expected to open
until this summer, with safety protocols in place well into the fall.
The lack of spring break cruises will be a major blow for the cruise industry, but bookings for fall, typically a slower season for travel, are higher than average
. The busy winter season is also seeing increased bookings. This is hopefully a sign of things to come. The tourism industry needs a big push of pent-up demand in order to bounce back faster.
For now, without a large bump, the recovery to 2019 numbers may take until the middle of the decade
. All major cruise lines are currently accepting reservations for future bookings.
Image via Bermello Ajamil & Partners
The new PortMiami Norwegian Cruise Line Terminal
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