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Will COVID-19 sink the cruise industry?


commodoredave
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There are two big issues to overcome:

 

First, financial viability of cruise lines.  Some will survive, but I am speculating some will cease operations due to lack of cash flow. This will shake out over the next couple years.

 

Second, regaining trust of potential cruise passengers. Given all the stories about illnesses contracted on cruise ships, I see a lot of online comments from people who are not interested in cruises for this reason.  Some of these people would never be cruisers.  However, many like myself, having never contracted any illness on a cruise ship, would like to cruise again.

 

I will wait until well after the current crisis is over to book any future cruises, since I've heard so many stories about people who booked, but when their cruise was cancelled, they had trouble getting refunds.  Credit towards future cruises is fine if you are confident enough that you will be able to take that future cruise.  And the cruise line can always cease operations due to lack of liquidity and you may be stuck with a loss.  Travel insurance is something I always buy, but many have noted their policies don't cover the current situation.  

Edited by winegirl
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The success or failure of the cruise lines will also be influenced by how they treat those over 70, and those who live with some lifelong ailments that the lines are now saying are unacceptable. Relying on overworked doctors to review and sign documents is not working as the doctors fear liability, as we are told, do their insurers.. Those if us over 70 fill their TAs, TPs, World Cruises, off season sailings, and any cruise over 14 days.  They also need to resolve the issue of not refunding money to those over 70 or with unacceptable medical conditions who have paid for upcoming cruises and are only given Future Cruise Credits that carry expiration dates. These credits are worthless because under their new policy they will not allow you to board .

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I'm reasonably sure that the cruise industry will rebound  well. My take is that many cruisers are not cancelling because they want to, for fear of catching this thing but more because they have to. We are not frequent cruisers although we wish we could but work and finances dictate our ability to cruise.

We have a cruise sceduled for New Zealand which ends in Melbourne, we then have a 2 week land portion in Oz. We have all accomodation booked and the long haul air sections booked. This is for late January thru mid February 2021, we will keep all that in place but perhaps hold on for a while with the one flight and car rental. This will pass, hopefully sooner rather than later. Perhaps it's wishful thinking but maybe those cruise line that have had problems with their propulsion systems could use this enforced down time to sort those issues (assuming they can get the time in drydock).

So back to the question on the thread...will this thing sink the cruise industry I say NO.  

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In addition to the personal health issues and fiscal issues of the cruise lines
 

There is also the fact that our own personal financial picture has completely changed in a few months.  Husband, a musician had all gigs cancelled till end of year.  Pension was declared insolvent a few months ago.  Small savings in the market even smaller.

 

We got FCC for Cancelled June sailing with granddaughters on RCCL.  Unfortunately will lose $500 NRD if we cancel January 2021 Celebrity sailing (hope we can still sail- yes, I’m a cockeyed optimist sometimes)

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I hadn't thought about the job loss impact on people's ability to afford travel, but it will definitely add to cancellations and slower rate of new bookings. Another concern is putting a deposit with or getting a FCC from a smaller cruise line that may not have the financial wherewithall to weather the storm. 

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I think there are two issues the cruise industry will need to address in order to regain the confidence of potential customers.  

 

  1. There is a growing list of ships that are proving to be highly efficient virus incubators.  Owners and builders need to take action to address this by getting the best advice they can on how the virus spreads inside a cruise liner and finding ways to address the problem.  The time to act is now as many ships are about to undergo a forced layoff as ports close and travel restrictions are imposed.  Retrofitting air-conditioning filtration systems with filters effective against moisture borne viruses should be considered.  A review of surface cleaning procedures and other steps should also occur. You can be assured that virus outbreaks on ships will draw significant media attention for many years to come.
  2. The industry needs to review its cruise amendment and cancellation policies.  There is going to be frustrating period with the current approach of providing credits for future cruises as a tranch of between 6 to 9 months (maybe longer) of cruisers trying to rebook.  For some this will not be an option and for others with underlying health conditions the risks discussed at point 1 may also make cruising in the future undesirable.  If the industry does not proactively address this you can be assured there will be enormous pressure on Governments to legislate to address the problem. 
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I've been seeing a number of comments about how the cruise lines will get help from the USA government but they're flagged anywhere but the US.  (Except the Hawaii, and I assume US river cruises.)
I expect some kickback about that, and wonder what the impact might be.

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This recent article from Forbes "Why Cruise Lines Should be at the End of the Bailout Line" addresses the issue you have raised. The article notes that CLIA members have not yet asked for any bailout money.  https://www.forbes.com/sites/irenelevine/2020/03/24/why-cruise-lines-should-be-at-the-end-of-the-bailout-line/#680787831f65

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You cannot sink the ocean. This industry is so huge and popular, it will stay forever. I will put it this way - as long as there are seas and ocean (and even rivers), the industry will live. Yes, it might have its ups and downs but in general it will never go away. My friend, it will be blasting right when everything will come to normal. I would even buy their shares. I am sure many people will become rich as soon as everything will come to normal 

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It’s all individual with regards to how people were treated. Our cruise was cancelled and we thought the easy way out was to rebook for the same cruise, ship, cabins and sail date in 2021. After 2 1/2 hours on the phone we were told it was no problem except the price was 33% higher. This at a time when oil prices have crashed and so their costs have plummeted. If this is designed to attract customers they failed miserably. We cancelled, got our money back and have vowed never to us that company again.

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CannyScotToo,,,I have a feeling this is going to be a common scenerio. Bean counters don't get it, indeed the industry is hemorrhaging money, but jacking up cruise prices is not the answer. I think they would find that rebooking customers into the next year cruise in the same cabin for the same price is a no brainer. It shows your company has integrity and that customers who may have been ambivalent about staying with the company is now a loyal patron. Sure charge more for new customers but people who stuck by them and took the Future Cruise Credit? throw them a bone. Way easier than pissing in peoples boots and then trying to dry them out.

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Confidence will come back but not in the short term. Social media was already bashing the industry comparing cruise ships to floating tubs harbouring all sorts of communicable ailments before Covid-19. Norovirus was a industry wide minor inconvenience but when cruise ships are refused port entry because it is 'assumed' they have a virus to transmit, that is a red flag. Cruises catering to the elderly will be most impacted in particular the longer duration ones.

 

Personal hygiene on the ships is one area that needs to change. Cruise lines can put out all sorts of messaging and hand sanitizing stations but it amazes me how many people feel those measures are not meant for them, particularly in washrooms and food areas. Cruise staff need to ramp up enforcement and if a cruiser objects, then they should be reported and denied booking a future cruise. This is a huge wake-up call for the industry.         

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In the past 20 or so years cruising has definitely been our preferred choice of vacation and we have taken over 50 cruises to all parts of the globe.  We have been lucky and never been ill on a ship or needed to pay a visit to a medical centre.  
For us the game changer has definitely been the lack of control over your own destiny once embarking on a voyage.  Ships come under the control of which ever port you visit.  They have the power to say no as well.  Unlike any other vacation where you could just pack and go home, once onboard that’s it.  Like it or not you are stuck with the decisions that are made for all passengers and crew.  
The Diamond Princess was just the beginning .. despite temporarily closing down the industry there is still a ship struggling to get its passengers ashore and home.  HAL Zaandem has had 4 deaths and possibly over 150 cases of Covid19 passengers and crew.  Help from the Rotterdam has arrived but still no plans for getting passengers ashore.  
We can’t say for sure but feel we have finished with cruise vacations.  The bigger ships with 1000’s of passengers don’t appeal to us.  We are getting older and that horrible word .. vulnerable .. so perhaps it’s time to rethink.   

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9 hours ago, seapals2 said:

In the past 20 or so years cruising has definitely been our preferred choice of vacation and we have taken over 50 cruises to all parts of the globe.  We have been lucky and never been ill on a ship or needed to pay a visit to a medical centre.  
For us the game changer has definitely been the lack of control over your own destiny once embarking on a voyage.  Ships come under the control of which ever port you visit.  They have the power to say no as well.  Unlike any other vacation where you could just pack and go home, once onboard that’s it.  Like it or not you are stuck with the decisions that are made for all passengers and crew.  
The Diamond Princess was just the beginning .. despite temporarily closing down the industry there is still a ship struggling to get its passengers ashore and home.  HAL Zaandem has had 4 deaths and possibly over 150 cases of Covid19 passengers and crew.  Help from the Rotterdam has arrived but still no plans for getting passengers ashore.  
We can’t say for sure but feel we have finished with cruise vacations.  The bigger ships with 1000’s of passengers don’t appeal to us.  We are getting older and that horrible word .. vulnerable .. so perhaps it’s time to rethink.   

I think you are right, people have lost faith in the cruise lines and will no longer be willing to give control of their lives to these companies.. When virus broke out in Asia, they canceled all cruises there but kept rest of world going. Why did’t they shut down all and stop the spread? Hearing many stories of infected people either being left off to spread disease or stuck on ships with no ports accepting them. Now people are getting sick and not able to get to hospitals and some are even dying. The cruise lines had no clue on how to deal with the pandemic and people will not go back until they do. This is not over by a long shot.

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10 hours ago, seapals2 said:

In the past 20 or so years cruising has definitely been our preferred choice of vacation and we have taken over 50 cruises to all parts of the globe.  We have been lucky and never been ill on a ship or needed to pay a visit to a medical centre.  
For us the game changer has definitely been the lack of control over your own destiny once embarking on a voyage.  Ships come under the control of which ever port you visit.  They have the power to say no as well.  Unlike any other vacation where you could just pack and go home, once onboard that’s it.  Like it or not you are stuck with the decisions that are made for all passengers and crew.  
The Diamond Princess was just the beginning .. despite temporarily closing down the industry there is still a ship struggling to get its passengers ashore and home.  HAL Zaandem has had 4 deaths and possibly over 150 cases of Covid19 passengers and crew.  Help from the Rotterdam has arrived but still no plans for getting passengers ashore.  
We can’t say for sure but feel we have finished with cruise vacations.  The bigger ships with 1000’s of passengers don’t appeal to us.  We are getting older and that horrible word .. vulnerable .. so perhaps it’s time to rethink.   

I am thinking the same, and certainly with respect to the mega-ships that cram so many pax and crew into such small spaces. We had 5 cruises booked over the next 18 months, and have already cancelled 3 of them. The 2 remaining are on very small ships and are at least 7 months away. The cruise industry had an opportunity to close down cruises everywhere in early March, but continued to sail despite warnings that the virus was spreading worldwide. The outcome has caused a deterioration in public confidence in the industry, and it will be a long time before it is restored.

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And the cruise lines will not be getting any financial help from the US government as noted in this story:

https://edition.cnn.com/world/live-news/coronavirus-outbreak-03-27-20-intl-hnk/h_969a7748c5ba4b8ad17a20dcb38614cd?utm_medium=social&utm_term=image&utm_content=2020-03-27T22%3A07%3A25&utm_source=twCNNi&fbclid=IwAR3zXcsQV_AsGkwP08o5NXB-Ghy92pU2fqYZDGlBjAF-G_LKCeYwIxVPiHw

...And with good reason. These cruise lines are incorporated in countries with low tax rates to avoid paying US taxes and obeying US rules. 

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How 

39 minutes ago, commodoredave said:

And the cruise lines will not be getting any financial help from the US government as noted in this story:

https://edition.cnn.com/world/live-news/coronavirus-outbreak-03-27-20-intl-hnk/h_969a7748c5ba4b8ad17a20dcb38614cd?utm_medium=social&utm_term=image&utm_content=2020-03-27T22%3A07%3A25&utm_source=twCNNi&fbclid=IwAR3zXcsQV_AsGkwP08o5NXB-Ghy92pU2fqYZDGlBjAF-G_LKCeYwIxVPiHw

...And with good reason. These cruise lines are incorporated in countries with low tax rates to avoid paying US taxes and obeying US rules. 

I was actually thinking of investing in their stock but without a bailout it is basically like Vegas now. Cruise lines who have 1000s of employees in US will need to rethink flagging off shore if they want protection from the US government.

Edited by Christine13020
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On 3/23/2020 at 10:06 PM, winegirl said:

There are two big issues to overcome:

 

First, financial viability of cruise lines.  Some will survive, but I am speculating some will cease operations due to lack of cash flow. This will shake out over the next couple years.

 

Second, regaining trust of potential cruise passengers. Given all the stories about illnesses contracted on cruise ships, I see a lot of online comments from people who are not interested in cruises for this reason.  Some of these people would never be cruisers.  However, many like myself, having never contracted any illness on a cruise ship, would like to cruise again.

 

I will wait until well after the current crisis is over to book any future cruises, since I've heard so many stories about people who booked, but when their cruise was cancelled, they had trouble getting refunds.  Credit towards future cruises is fine if you are confident enough that you will be able to take that future cruise.  And the cruise line can always cease operations due to lack of liquidity and you may be stuck with a loss.  Travel insurance is something I always buy, but many have noted their policies don't cover the current situation.  

I think so too. I would just like to add that in order to restore the trust of potential customers, cruise lines must offer something new in the field of transportation security. Now people are scared, and this is a necessary measure to restore trust. Accordingly, this requires money, which, as you said, some will not have. Plus, I think there may be stricter requirements for cruises on the part of the state, which also entails costs. After all, now many seemingly completely private companies are affected (and this is logical) to the influence of state and measures it takes to stop the epidemic

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