While some aspects of travel such as necessary air travel or rail commuting has provided some lifeline for the troubled market, there is no such thing as necessary cruise travel, leading to devastating standstills for the fleets of massive ships without passengers in 2020.
The Cruise Industry as it Stands
The cruise industry, given its high price tag, operating costs, and high risk categorization, did not fare well in a world with stricter borders and economic pullback. In 2018, the cruise industry as a whole was worth an impressive $150 billion with no signs of slowing down. That was put to an abrupt stop in early March after an astounding 41 different people were infected with COVID-19 on a Hurtigruten cruise ship.
A series of other cruise ships including Princess Cruises had similar stories. The Diamond Princess, saw over 700 members on their ship become infected with COVID-19 resulting in the deaths of 14 passengers. Not long after this, the CDC recommended that all plans for cruise be put on hold, eventually leading to a “No Sail Order” which remained in place through September.
That order along with the widespread uneasiness to travel at all from the general population led to record losses for the cruise industry, led by juggernaut Carnival Cruises which took in $4.4 billion of losses in their most recent quarterly report. In fact, in that quarterly report, the company only earned a paltry $0.74 billion, which is a colossal drop in revenue from the same quarter in 2019 adding up to an 84.7% decline. This interrupted a four year period of continuous year over year growth in revenue.
Royal Caribbean Cruises has seen a similar drop off, though perhaps even more catastrophic. In their most recent quarterly report, Royal Caribbean earned almost nothing considering the size of their fleet at $0.176 billion. While Carnival’s decline in revenue was significant, Royal Caribbean did even worse with a steep dropoff of 93.74%.
These losses expand beyond the companies into economic losses for states that depend on cruises as a part of their overall GDP and for employment. For Florida, where 59% of all embarkations in the United States take place, the shut down of cruise lines during the pandemic has resulted in a $3.2 billion loss of economic activity in the state. For the 149,000 workers involved with the cruise industry in Florida, this has cratered their living with $2.3 billion in lost wages. Port Miami alone will lose $55 million in 2020. So, considering the staggering losses of 2020, what can be expected from the cruise industry in the near future?
The Cruise Industry Moving Forward
While the diagnosis for the cruise industry still looks rather dire, there are many positive signs that it will be able to recover. The industry itself has decided not to sail again until after October, but there are already plans to begin set sailing again on November 1st.
While new bookings are down in 2021, there are signs of improvement in that market. Royal Caribbean will also begin embarking on cruises in Singapore starting on December 1st. Similar to the flights to nowhere, the cruise will not have any destinations besides simply going on the ship and sailing off the coast. The trips will be three to four nights long and will be at a reduced capacity of 50%. These all may be small signs, but they provide hope that recovery can be possible for the industry which is struggling to stay afloat.
The cruise industry has been one of the hardest hit of all during the COVID-19 pandemic. With billions of dollars in losses and thousands of jobs furloughed, cruise lines have struggled heavily just to stave off bankruptcy. While the outlook is not by any means on the path to a full recovery, the signs of improvement are there. Especially with executives saying that full deployment will be back by next year, there are clear plans to make sure this is not the end for the industry by any means.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.