It’s been one year since cruises started cancelling cruises. Can you believe it? It was January 2020 when the cruise industry saw the start of the damaging effects of the pandemic. Sadly, one year later things have gotten even worse and the cruise will not be returning anytime soon.
So, what is next for the cruise industry? Are cruise lines going to go out of business? We look at the events of the past year and try to answer some of these questions.
The story so far…
Let’s quickly take a look at what happened last year. It all began last year on January 25th. The cruise industry saw the start of what will be the toughest time in travel history.
On January 25th, cruise lines started cancelling sailings in and around China due to the outbreak of the coronavirus. One of the first ships to stop sailing was the Royal Caribbean Spectrum of the Seas.
In February restrictions begin to be in place to stop people from certain countries, such as China, from travelling on cruise ships.
On the 4 February, there is a large outbreak on Princess Cruises Diamond Princess in Japan. 10 passengers are diagnosed with COVID-19 and the ship quarantined at Yokohama for nearly a month.
We cruised on Quantum of the Seas in February, as this was all developing. The only differences we noticed was a temperature check at the port and airport. Then countries started to close borders and we began to see itinerary changes. But through all this, cruises around the world still kept going.
On 4 March 2020, a passenger tested positive for coronavirus after returning from a cruise on Grand Princess. After this, more and more former passengers of Grand Princess began testing positive.
March 12 2020, Princess Cruises cancelled all operations for at least 60 days. They were the first cruise line to stop sailing. Other cruise lines started following suit. Canada became the first country to put a stop to cruising in its waters.
Cruise lines then got stuck on ships with ports refusing to accept them. Ship floated in international waters, full of passengers with nowhere to go.
In early March we cruised from Dubai on Royal Caribbean’s Jewel of the Seas. This trip was cut short when there was a COVID scare onboard. This turned out to be a false alarm, but other countries would not accept our ship so our cruise was cancelled after two days.
Then on March 14, 2020, the CDC issued a No Sail Order suspending any further embarkation for cruise ships in US waters. Australia followed on 15 March 2020, banning all cruise ships arriving from foreign ports.
By May 2020, 40 cruise ships have confirmed positive cases of coronavirus on board.
In June 2020, Pullmantur Cruises became the first cruise line to declare bankruptcy due to the pandemic. Less than a month later by the UK based Cruise & Maritime Voyages and Birka Cruises. Later in the year, India based cruise line Jetesh Cruises ceased operations.
In a glimmer of light, several cruise lines returned to cruising in Europe in July 2020. MSC Cruises, Tui Cruises and Costa Cruises began sailings for people who live in a Schengen zone area. Meaning the vast majority of the world could still not cruise.
Many cruise lines began selling off older ships. A record high of 13 ships scrapped in India and Turkey since the start of the Pandemic.
In October 2020, we were very lucky to sail on SeaDream Yacht Club’s SeaDream 1.
Even though there were multiple protocols in place and we had several tests, the virus still managed to get onboard in Barbados. Showing that whatever the protocols were it will still find a way on board!
It’s a sneaky and dangerous virus as it remains hidden in many people, completely unaffecting them. But when it does infect someone with pre-existing conditions or older people, it can be deadly.
At the end of October, the CDC in the USA ended the No Sail Order and introduced a new Conditional Sail Order. The new order requires cruise lines to prove their safety protocols and policies work before resuming cruises. As part of the order, test cruises must be carried out. So far, no line has carried out test cruises and Royal Caribbean are the only company looking for volunteers.
Royal Caribbean and Dream Cruises resumed cruises in Singapore. Quantum of the Seas and the World Dream began round-trip cruises to nowhere for Singaporean residents only.
Where is the cruise industry now?
Well, one year later things are looking pretty bleak. Apart from the small number of ships in Europe and Singapore, the whole industry is at a standstill.
The positive news is that the vaccine is now being rolled out with three vaccines approved for use in the UK and USA. 15 million vaccinations in the UK and 1.5 Million in the USA are due to take place before the middle of February. It’s only a matter of time before cruising resumes.
Cruise lines have spent the time wisely coming up with new protocols to keep passengers and crew safe. Most have retrofitted new airflow and ventilation technology to make them as safe as possible.
Companies such as Royal Caribbean have even changed all their menus and improved many aspects of cruising with them. Like coming up with a new type of virtual muster drill.
We are still waiting to see what the new administration in the USA will do, will the CDC change back to a no sail order? We just don’t know yet.
Just a few days ago Royal Caribbean announced the sale of Azamara cruises, and every week we hear of more cruises being scrapped. Some as young as 24 years old – cruise ships usually sail for at least 40 years.
Will cruise lines survive?
Well, this depends on how long the situation goes on for. The industry has been in free fall since the pandemic hit.
The bad publicity from the media has also left the public believing that cruise ships are deadly incubators of disease. We know this isn’t true but the media have done their best to blame cruise and turn people off! We know and you do that it’s one of the safest and cleanest forms of travel. With the new protocols, it will be the safest place to be, guaranteed!
It will take years, if not decades for the whole industry to recover from this mess
But cruise lines do not have an endless pot of money. The whole industry is throwing away billions of dollars a month maintaining empty fleets of ships.
The ships need to keep running with crew on board. Otherwise the systems and the ships will deteriorate quickly -especially in a saltwater environment. Even the toilets have to be flushed regularly to keep the plumbing working and prevent rusty pipes!
Cruise lines have sold ships, cut capital expenses, cut back on employees and raised additional capital to weather this storm.
Through all these measures, Royal Caribbean has been able to improve the company’s liquidity profile by approximately $12 billion for 2020 and 2021 combined. They estimate their cash burn to be in the range of $250 to $290 million per month during the prolonged suspension of operations.
Norwegian Cruise Line said it was spending about $160 million a month and Carnival Corporation a staggering $650 million per month. Carnival lost a total of $10.2 billion 2020 — but says it can survive 2021 without cruises if needed.
They all currently have enough cash on hand to survive well over a year without a single dollar of revenue.
When will cruise return?
This is the number one question we get asked and we are asking ourselves. Personally, and this is just a guess, we expect to see cruising come back to the USA and Europe in mid-2021. So, around June/July time at the earliest.
This can change though depending on this developing situation and the continued rollout of vaccines. Lines have already pushed cruise start dates back multiple times.
And cruise will come back slowly, we don’t expect it to go back to normal anytime soon. Expect to see a few ships first sailing with reduced capacities and a whole truckload of restrictions. New protocols will be in a place like tests, social distancing, mask-wearing and possibly even vaccination requirements.
But this will change as it becomes safer and more people get vaccinated. The demand is there, people can’t wait to cruise again and we are confident it will be back and better than ever.