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Hlitner

CoronaVirus Impact on the Cruise Industry

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We think its time to start a macro topic on what impact the CoronoVirus will have on the industry.  From what we are reading here on multiple CC blogs and seeing on other social media we now think the impact will be huge.  In fact, we now think it will be unprecedented!  Initially it looked like the virus would mainly impact a handful of Asian cruises.  But now, the near panic in Italy will likely scare away many cruisers and other travelers.  In the past when we had "cruise panic" such as during the Gulf Wars, the impact was relatively short lived and was quickly countered by the cruise and travel agency offering lots of incentives to lure folks to book.  But this situation seems to be different.  Some experts are predicting that the virus could continue to be a major issue into next year!   We see posters talking about cancelling Caribbean cruises, which at this time, are not even in an area with Coronovirus issues.  Folks are scared and/or being very cautious.   

 

We think the fast spreading virus in Italy is a huge cruise related issue.  Those with Spring/Summer cruises in Europe are generally outside of the final payment period and one can speculate that many will cancel.  That probably bodes well for the Alaskan cruise season since many will likely assume that it is one of the safer places to travel.

 

What do you think?

 

Hank

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I understand that cruise line stocks are taking a beat. And when I got up a couple of hours ago the DOW was down 900 due to fears of a pandemic.

 

Someone here last night was even concerned about South America which AFAIK has had no cases. Yet.

 

There's talk that like 'regular' influenza it may quiet down in warm weather and then return in the fall. And that, yes, likely next year before there's a vaccine.

Edited by clo

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I think it will still spread, but it won’t be as prevalent in the hot summer months, meaning it will go away, but will probably come back. Hoping a vaccine is discovered quickly! I have read several articles that basically state that the virus can’t live or survive in hot/humid climates.  I think the vast majority of people don’t realize that we could classify the flu as a pandemic, also. Not to take away the serious nature of this virus, because they are still trying to understand all of the in’s& outs of it, but if the vast majority of ppl are healthy, without any underlying issues, surviving and fully recovering from it isn’t a problem. I’ve read that some liken it to a bad cold.  We’ve all had those. 

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4 minutes ago, Markanddonna said:

According to this article, we are in the early stages of a pandemic. Is that how you interpret this since it has now spread worldwide? 

Maybe. I know there are some things that don't get 'labels' until almost after the fact. When the data has been sorted and reviewed. Certainly the specific mention of travel gets one's attention.

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I'm neither long or short any cruise industry stocks in my portfolio and I have no cruises booked at the moment so I haven't given the subject much thought other than wondering if cruisers would want to spent quarantine time of a ship or at an air force base.  I'll start pondering the future of the cruise industry if the stocks get pummeled some more or if cruise prices drop significantly. 

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We were booked on an Asian cruise in April that the cruise line canceled last week.  We rebooked another cruise to Spain, also in April.  If the cruise line with all its lawsuit-averse legal advisors decide they will sail as scheduled, we'll be on it.  I'm not dismissing the risk; I'm just saying someone with far more information than I can make the decision about passenger safety.

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I was at a Medical facility earlier today and overheard a discussion between 2 employees who are going on trips next week,one to Italy and the other to Denmark.

They both believe that there is no danger and everything is overblown.I could not believe what I heard.

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2 hours ago, clo said:

 

 

There's talk that like 'regular' influenza it may quiet down in warm weather and then return in the fall. 

You think so? Some hot climate countries like Australia & NZ (summer right now), Singapore Malaysia, Thailand, Mid East etc are all getting hit by coronavirus. So much for this theory.

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sold 500 shares of Carnival and purchased 600 of Gilead 

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People seem to be shocked that Italy has been hit hard. My eyes were open in November when one third of  our ship's passengers were from China. The cruise began and ended in Rome. 

I later learned Italy is the top destination for the Chinese. It is so unfortunate that many panic just seeing an Asian person, but that is human nature when the world is close to a world wide pandemic. Chinese make up one third of high end buyers and travel so understanding the importance of the Chinese is essential as we make travel and financial decisions.

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5 hours ago, Hlitner said:

We think its time to start a macro topic on what impact the CoronoVirus will have on the industry.  From what we are reading here on multiple CC blogs and seeing on other social media we now think the impact will be huge. 

 

Hank

 

 

Hi Hank

 

I'm relatively new here so don't understand who you are referring to when you say "We think it's time to start a macro topic"

Could you elucidate please.

 

Aside from that yes I totally agree that the COVID-19 situation is going to devastate the cruising industry and likely a number other industries and businesses related to both travel and holiday provision.  I personally think at this time that the cruise industry is staying pretty quiet and has been hoping to play the entire thing down when it knows patently that lots of cruises are going to be compromised either by having COVID-19 on-board or by having people with cold/flu on-board and thus having to see ports refuse entry until people can be tested and cleared.

 

I've outlined in another thread the true heart of the problem.

 

The problem is NOT with the virus.  The problem is NOT with people overly worrying about contracting the virus (as they will surely get it on land soon enough anyway as it spreads).

 

The problem is solely and 100% the imposed medical protocols and quarantining powers of the authorities that are currently associated with this specific virus.

 

We know already that compared to Flu, this virus is utter child's play.  Flu kills 100s of 1000s of people every year.

 

The CRUCIAL difference is that when we get Flu, whether on land or at sea, the authorities are not required to suddenly go to Def Con 4 and march in with hazmat suits and lock everyone in their cabins for 2 weeks or alternatively march people off the ship to some foreign containment or FEMA style camp.

 

THAT is the problem with COVID-19.  It is how it is being treated by the CDC and WHO and thus the desperate nightmare scenarios that are FORCED on travelling passengers as a result.

 

I personally feel I know exactly why they are doing this and making such a big deal of it but that's another story (let's just say vaccine sales and leave it there !)

 

Meanwhile this authoritative 1984 style dystopian approach to the virus WILL absolutely cripple and devastate the industry and will continue to do so pretty much indefinitely unless and until they change their approach.

 

It's crazy that whilst Flu kills 100s of 1000s of people a year that they don't take the same quarantine measures when someone on a ship gets Flu.  Thereby imho can we tell the true reason they are making such a huge issue of COVID-19 (did I mention vaccine sales?!).   If Flu kills vastly more people than COVID-19 then surely when someone gets Flu on a ship they should equally be quarantining the victim and quarantining the rest of the passengers in their cabin for the duration just as they are for COVID-19.

 

But they aren't.

 

So the cruise industry has an enormous problem and could feasibly be held totally to ransom by the CDC and WHO.

 

The ONLY WAY that the industry will be able to effectively operate going forward is if the CDC and WHO relax this astonishing response protocol to someone coming down with the virus.   They are going to have to allow cruise lines to simply quarantine and/or remove an infected passenger whilst allowing everyone else to get on with their holiday.   Just as with cases of Flu, cruise passengers are going to have to be allowed to take their chances on the ship and exercise their own personal hygiene standards and avoid sneezing and coughing passengers.

 

The situation is even more demanding than this though.  In order to quarantine a victim of COVID-19 you are going to need to determine if they have it, rather than just having basic cold/Flu/ILI symptoms.   As there is up to a 14 days incubation period with COVIS-19 you have a dilemma.   If the cruise staff see a person sneezing and coughing with those basic cold/Flu symptoms should they take them away immediately and quarantine them and begin testing for COVID-19 or should they let them simply carry on and see if they become so badly infected that they need real medical support down below?

 

We know that with Norovirus we immediately quarantine the victim in cabin for 48-72 hrs no question.

 

It seems likely then then that cruise lines will have to immediately quarantine anyone with cold/Flu symptoms in a similar way as a precaution in case they actually have COVID-19.   Given the plethora of people with colds/Flu/ILIs on ships such a protocol would see countless people confined to cabins and that's not going to go down well.

 

And even that is not the end of the dilemma, no the hits just keep a-coming.

 

Once you have people with cold/Flu/ILI symptoms confined in cabins you are then duty bound to inform any port you are due to visit about that and then you are at the mercy of that port authority as to whether ANYONE on the ship is going to be allowed to disembark.  If there is even the potential that one or more passengers might have COVID-19 then they may well refuse permissions simply to protect the local area and rest of the country.

 

What that equates to is that cruise lines can no longer realistically offer or guarantee any specific cruise experience.

 

I realise that even now an element of that exists.  There is always the possibility that a port might be missed for a variety of reasons but those are usually either freak weather conditions or some technical problem or if the ship has an inordinate amount of sick passengers on-board with something like Norovirus.  Everyone who cruises accepts that risk because the practical reality is that it is a small risk.  It happens but not that often.

 

Now if you are going to start quarantining people any and every time they get the sniffles then it tends to follow for me that lots of ports are going to be missed unless and until you can convince every country, every port on your itinerary that they shoulder the risks of letting passengers off when there is the possibility of someone having COVID-19 but who has not yet completed testing.   So this will require international co-operation.  It's mutually beneficial for ports and cruise lines to be co-operative because that's how they jointly make lots of money.  But there are political elements involved, the idea that a port puts everyone else in a local town or city at risk is unpalatable to many people so it might be difficult to achieve.

 

So where are we ?

 

To all practical intents and purposes the cruise industry is currently, imho, Daffy Ducked.

 

The threat of a Diamond Princess episode will keep customers away even if they don't think that they themselves will get the virus.   It's the chance that someone else will that is the issue and that will result in another Diamond Princess nightmare.

And if that IS going to happen I strongly submit it's going to happen via one of the crew because those people are on the ship for up to 9 months and getting on and off the ship all over the globe.   As the virus spreads the chances that a crew member will pick up COVID-19 ashore and bring it back aboard rises exponentially.  There is nothing a paying passenger can do about that problem.

 

So in summary:

 

1. For the cruise industry to survive this situation at all it 100% MUST NOT react to an on-board virus case in the way that the Diamond Princess did.  If CDC/WHO protocols demand that kind of response, then it is game over for cruising.

 

2.  Cruise lines are going to have to let passengers take their chances just as they do now with Flu or Norovirus on-board

 

3.  Ports across the globe likewise are going to have to allow passengers to disembark and all the locals likewise will have to just take their chances as they also do now with Flu.

 

4.  In addition, thus far unmentioned, the travel insurance companies are also going to have to play ball

 

 

I hope some of that makes sense.  Sorry for the long post but it's a complex situation.

 

KTS

Edited by KnowTheScore

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5 hours ago, Hlitner said:

We see posters talking about cancelling Caribbean cruises, which at this time, are not even in an area with Coronovirus issues.  Folks are scared and/or being very cautious.   

 

 

Forgot to raise this point with you.   FYI 2 ports in the Caribbean have already turned cruise ships away.

 

https://www.ship-technology.com/news/coronavirus-caribbean-deny-entry-cruise-ship/

 

"Caribbean island nations Saint Lucia and Dominica have denied entry of the cruise ship AIDAperla into their shores as they were carrying a large number of sick passengers on board.

The Department of Health and Wellness of Saint Lucia said that the decision to deny permission on 1 February was taken to protect the health and safety of the citizens."

 

There was no COVID-19 on-board but the ships were turned away regardless.

 

So there IS impact in the Caribbean and I predict we will see more and more of this as the virus spreads globally.

 

 

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Know the score,

I believe your summation is accurate. We have always accepted the risk of getting sick but this new problem is putting the reality of complications into the light. I just got off a two week cruise and started to look at my fellow passengers in a different way. Many are quite gross and inconsiderate. Maybe their mothers neglected to teach hygiene, manners, and common sense.

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I bought puts on CCL a few weeks ago, made some money. (It’s basically pure gambling now that you can do zero fee trades everywhere.)
 

RCL closed well under $100 today.

 

If you really want those “stockholder” benefits, time to buy while there’s a sale going.

 

I’m being slightly glib, but I’m also not looking at my retirement accounts anytime soon.

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23 minutes ago, AlyssaJames said:

I’m also not looking at my retirement accounts anytime soon.

I look but Bob doesn't 🙂 We have a 'magic #' that we love when we go above it and recently pulled some out for a special purchase. Glad we did it then.

 

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12 hours ago, c-boy said:

sold 500 shares of Carnival and purchased 600 of Gilead 

 

Was Carnival price is up and Gilead low?  

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11 hours ago, KnowTheScore said:

 

Flu kills 100s of 1000s of people every year.

 

 

I am curious where you come up with a figure like this?  You realize this means at least 200,000 , yes?  The official numbers I see are too high, but no where near that high.   

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14 hours ago, sfaaa said:

You think so? Some hot climate countries like Australia & NZ (summer right now), Singapore Malaysia, Thailand, Mid East etc are all getting hit by coronavirus. So much for this theory.

Australia is not getting hit by the virus, we have only had 22 cases so far. 15 of those were diagnosed early on, all linked to people who had travelled from China before travel bans were put in place. Many of those people have recovered. The remainder of the cases are people who were on Diamond Princess.

 

New Zealand does not have any cases of the virus. 

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16 hours ago, lenquixote66 said:

I was at a Medical facility earlier today and overheard a discussion

between 2 employees who are going on trips next week,

one to Italy and the other to Denmark.

They both believe that there is no danger and everything is overblown.

I could not believe what I heard.

 

That's known as Brave Talk!

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