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commodoredave

Will COVID-19 sink the cruise industry?

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From The Economist:

The coronavirus may sink the cruise-ship business

“Once sold as the safe and easy way to see the world, cruise ships have come to be seen as diseased-infested prison hulks that trap holidaymakers at sea. Even more than airlines, which have almost completely shut down across the world as demand for air travel collapses, the cruise business may have most to lose from the pandemic.

https://www.economist.com/business/2020/03/31/the-coronavirus-may-sink-the-cruise-ship-business

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The 'Traveling with Bruce' blog just made a great case for using cruise ships as hospitals. When compared to NY's temporary hospitals set up in parks and convention centers, ships make a lot of sense.

 Now that Trump says 100,000 dead will be the best case scenario, the  number of beds needed could top 1 million. How will you feed all these people? Cruise ships feed thousands every day, and could be converted very quickly. 500 cruise ships world wide are sitting empty.

 

They would love to make some money and charter their ships to the government , not just in the US , but world wide. This could generate some much needed good will for the cruise industry.

 

Another point he made was about the Navy ship Comfort. Its over 40 years old , started life as an oil tanker and needed tugs to dock. Maybe its time for a purpose built , LNG clean burning, modern hospital ship.

 

I feel that we were wholly unprepared for this virus. We were warned! We have to learn to listen to experts. Every Disaster Movie starts with everyone ignoring the scientist . 

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Jimdalva, you are right about ignoring the experts and not being prepared! 

Cruise ship as hospitals could work, especially if they were used for non-coronavirus patients which is safer, and would open up more room in traditional hospitals for coronavirus patients. Remember, during wars (including the Falklands) cruise ships were used by the military for transport. So why not for basic hospital rooms now.

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20 hours ago, AmericanGoldfinch said:

An article triggered, in part, by Carnival's Form 10-K filing late last week.  It remains to be seen whether Carnival's historical resilience will continue through the current, unprecedented events. 

 

Carnival’s struggle to survive the coronavirus as outbreak wipes out the cruise industry

A very interesting story that raises a number of issues for anyone with a current booking, or contemplating making one for the post-COVID-19 period. If holding a future booking, should we wait it out in the hopes that the cruise will take place or the cruise line holding our reservation will be financially strong enough to refund our money? And, if thinking about making a future booking, how long should we wait before making it to avoid losing our money should some or most cruise lines go insolvent?

A related question is which cruise lines are the most likely to survive, and which ones are in the weakest financial position to survive going forward. Any views out there?

 

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This story in yesterday's Guardian newspaper is pretty brutal about cruising. It actually recommends that people not return to cruising. However, I think the author is using a very broad brush and condemning all cruise lines for the sins of some. I especially resent the fact that the author does not differentiate the impact of mega-ships from that of smaller, more environmentally conscious cruise lines. Any thoughts out there??

 

https://www.theguardian.com/commentisfree/2020/apr/14/cruise-ships-coronavirus-passengers-future?CMP=Share_iOSApp_Other

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1 hour ago, commodoredave said:

This story in yesterday's Guardian newspaper is pretty brutal about cruising. It actually recommends that people not return to cruising. However, I think the author is using a very broad brush and condemning all cruise lines for the sins of some. I especially resent the fact that the author does not differentiate the impact of mega-ships from that of smaller, more environmentally conscious cruise lines. Any thoughts out there??

 

https://www.theguardian.com/commentisfree/2020/apr/14/cruise-ships-coronavirus-passengers-future?CMP=Share_iOSApp_Other

 

That is an extremely biased article, obviously the writer has an agenda. I would suggest that there are many things that need improving, definitely crew wages and working conditions. The carbon footprint tripling I'm not so sure about, in many ways it is shifted. While the cruise ship burns vast amounts of fuel and consumes huge quantities of water, the passengers aboard are not driving their cars or heating or cooling their houses or pools or hot tubs to the same extent. And part of that vast fuel consumption is to desalinate the water. As you bring up the, flights, trains and buses used to get to the ship; they would use those for any land based vacation. I could go on for paragraphs but that is tedious. To infer that cruise ships are pure evil just suits the author"s narrative. Every point made can be said for any vacation. Land based vacations at any "all inclusive" have the same points, poorly paid workers, environmentally questionable business practices and the list goes on. Even with US labor law in place vacation spots hire undocumented labor and pay poorly. Including some very vocal people who don't miss a chance to bash "Illegals" but have them working in their resorts.

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7 hours ago, Blackduck59 said:

 

That is an extremely biased article, obviously the writer has an agenda. 

Its an opinion piece ... Thats what opinion pieces are. 

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7 hours ago, commodoredave said:

Wow! This Bloomberg Businessweek feature tears a huge strip off of Carnival and its executives. Is it accurate and fair? I wonder what the Carnival cheerleaders might say about it!

https://www.bloomberg.com/features/2020-carnival-cruise-coronavirus/

Hit the nail on the head.There is gonna be a lot of hurt around.

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On 4/17/2020 at 9:53 PM, marconi said:

Hit the nail on the head.There is gonna be a lot of hurt around.

Yes, and likely worse for the Carnival brands. 

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Posted (edited)

The cruise industry is not sunk.  The cruise industry as we know it is sunk.

The entire world is shut down.  Every country that can, is printing money like crazy.  Interest rates are at zero.  Combine those  economic realities and that means that a period of 70's stagflation followed by massive hyperinflation, is down the road.  You can't print trillion dollars (increase the money supply by 3X and NOT get inflation) It also means economic depression and destruction of every pension ponzi scheme out there ( none of them can meet their financial goals under zero interest rates).  Add in hundreds of millions out of work, coupled with massive new costs that will be added to cruise lines by governments, and you have an industry that will be a shell of what it was three short months ago.

People will not travel like they once did.  They will not have the discretionary income nor will they have access to credit card loans to pay for vacations.  You think passport Visas have been a problem, and expensive, in the past?  Try new requirements (possibly) on shot records,  temperature scans,  Bio markers, vaccines, and new floating medical centers to manage the health of every ship (mandated by governments), and new medical requirements for older people, as counties use this emergency for an excuse to overreach with new regs for those over 70.  Each country will approach this differently, meaning many more regulations and requirements that will make international cruising a huge hassle.  Can you say HOURS TO CLEAR CUSTOMS and immigration now? Maybe the entire ship inspected face to face?

 

We'll have Alaskan cruises and Caribbean cruises (because those poor countries die without cruise tourism), some intracountry cruising, and that's about it.  Say goodby to most med cruises, world cruises, Asian cruises, Australian cruises, Baltic cruises as a start...anywhere there is a multi-country itinerary there is now risk of operating.

Throw in bankruptcies of the lines themselves as they spend millions to put ships in hot dock and then cold dock and then restart (all with zero revenue), and continue to pay interest on borrowed money to pay for their billion dollar ships. it's not a pretty picture financially for them.  Frankly I don't see the cruise lines recovering and restarting except in bankruptcy. (and you wonder why they have been so stingy with refunding cash?)

Now add in all the new workers that generate no increased revenue,  who will be responsible for constant cleaning, hand washing police, more servers,  medical people, the list goes on and on. Costs will be much higher, even with depressed oil prices.  I don't know where this ends up but it's not pretty.

What I do know is that with over 900 total days cruising I personally will not get on a ship again unless I have a balcony cabin. I would not expose myself again to ever possibly being quarantined for 14 days in an inside cabin.  That alone puts the cost of long cruises out of my price range (even with no other cost changes)...so I'll be cutting back my cruising...a lot.

 

Edited by T Tail

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The cruise industry is not sunk.  The cruise industry as we know it is sunk.
The entire world is shut down.  Every country that can, is printing money like crazy.  Interest rates are at zero.  Combine those  economic realities and that means that a period of 70's stagflation followed by massive hyperinflation, is down the road.  You can't print trillion dollars (increase the money supply by 3X and NOT get inflation) It also means economic depression and destruction of every pension ponzi scheme out there ( none of them can meet their financial goals under zero interest rates).  Add in hundreds of millions out of work, coupled with massive new costs that will be added to cruise lines by governments, and you have an industry that will be a shell of what it was three short months ago.
People will not travel like they once did.  They will not have the discretionary income nor will they have access to credit card loans to pay for vacations.  You think passport Visas have been a problem, and expensive, in the past?  Try new requirements (possibly) on shot records,  temperature scans,  Bio markers, vaccines, and new floating medical centers to manage the health of every ship (mandated by governments), and new medical requirements for older people, as counties use this emergency for an excuse to overreach with new regs for those over 70.  Each country will approach this differently, meaning many more regulations and requirements that will make international cruising a huge hassle.  Can you say HOURS TO CLEAR CUSTOMS and immigration now? Maybe the entire ship inspected face to face?
 
We'll have Alaskan cruises and Caribbean cruises (because those poor countries die without cruise tourism), some intracountry cruising, and that's about it.  Say goodby to most med cruises, world cruises, Asian cruises, Australian cruises, Baltic cruises as a start...anywhere there is a multi-country itinerary there is now risk of operating.
Throw in bankruptcies of the lines themselves as they spend millions to put ships in hot dock and then cold dock and then restart (all with zero revenue), and continue to pay interest on borrowed money to pay for their billion dollar ships. it's not a pretty picture financially for them.  Frankly I don't see the cruise lines recovering and restarting except in bankruptcy. (and you wonder why they have been so stingy with refunding cash?)
Now add in all the new workers that generate no increased revenue,  who will be responsible for constant cleaning, hand washing police, more servers,  medical people, the list goes on and on. Costs will be much higher, even with depressed oil prices.  I don't know where this ends up but it's not pretty.
What I do know is that with over 900 total days cruising I personally will not get on a ship again unless I have a balcony cabin. I would not expose myself again to ever possibly being quarantined for 14 days in an inside cabin.  That alone puts the cost of long cruises out of my price range (even with no other cost changes)...so I'll be cutting back my cruising...a lot.
 


But other than that, you remain fairly positive ?



Sent from my iPad using Forums

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I am reaching a difficult point.  I have a cruise booked for March 2021 in the Mediterranean/Middle East.  I have paid a deposit and next months I need to commit the airfare component to the booking.  I do not know if travel restrictions will be lifted or a vaccine developed in time for my trip.  My concern is that with the industry's really poor approach to refunds do I risk throwing good money after bad?  I cannot even be sure if any airline my travel agent books with will still be flying by March 2021 and I do not know which countries will have the virus under control by then and which ones will not.  So I guess I am erring on cancelling unless the industry can reassure me I can get my money back if it cannot deliver on my travel package.

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17 hours ago, Bron62 said:

I am reaching a difficult point.  I have a cruise booked for March 2021 in the Mediterranean/Middle East.  I have paid a deposit and next months I need to commit the airfare component to the booking.  I do not know if travel restrictions will be lifted or a vaccine developed in time for my trip.  My concern is that with the industry's really poor approach to refunds do I risk throwing good money after bad?  I cannot even be sure if any airline my travel agent books with will still be flying by March 2021 and I do not know which countries will have the virus under control by then and which ones will not.  So I guess I am erring on cancelling unless the industry can reassure me I can get my money back if it cannot deliver on my travel package.

My advice is don’t get yourself locked in on anything. I got locked in on a cruise leaving 2/29 and am thanking my lucky stars I got home safe by 3/13. I have 2 cruises booked for 2021, not going unless they have a vaccine or some other mitigation’s measures  in place. Hard to believe the industry will still be running cruises if there is a pandemic still ongoing.

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On 4/19/2020 at 12:25 PM, T Tail said:

The cruise industry is not sunk.  The cruise industry as we know it is sunk.

The entire world is shut down.  Every country that can, is printing money like crazy.  Interest rates are at zero.  Combine those  economic realities and that means that a period of 70's stagflation followed by massive hyperinflation, is down the road.  You can't print trillion dollars (increase the money supply by 3X and NOT get inflation) It also means economic depression and destruction of every pension ponzi scheme out there ( none of them can meet their financial goals under zero interest rates).  Add in hundreds of millions out of work, coupled with massive new costs that will be added to cruise lines by governments, and you have an industry that will be a shell of what it was three short months ago.

People will not travel like they once did.  They will not have the discretionary income nor will they have access to credit card loans to pay for vacations.  You think passport Visas have been a problem, and expensive, in the past?  Try new requirements (possibly) on shot records,  temperature scans,  Bio markers, vaccines, and new floating medical centers to manage the health of every ship (mandated by governments), and new medical requirements for older people, as counties use this emergency for an excuse to overreach with new regs for those over 70.  Each country will approach this differently, meaning many more regulations and requirements that will make international cruising a huge hassle.  Can you say HOURS TO CLEAR CUSTOMS and immigration now? Maybe the entire ship inspected face to face?

 

We'll have Alaskan cruises and Caribbean cruises (because those poor countries die without cruise tourism), some intracountry cruising, and that's about it.  Say goodby to most med cruises, world cruises, Asian cruises, Australian cruises, Baltic cruises as a start...anywhere there is a multi-country itinerary there is now risk of operating.

Throw in bankruptcies of the lines themselves as they spend millions to put ships in hot dock and then cold dock and then restart (all with zero revenue), and continue to pay interest on borrowed money to pay for their billion dollar ships. it's not a pretty picture financially for them.  Frankly I don't see the cruise lines recovering and restarting except in bankruptcy. (and you wonder why they have been so stingy with refunding cash?)

Now add in all the new workers that generate no increased revenue,  who will be responsible for constant cleaning, hand washing police, more servers,  medical people, the list goes on and on. Costs will be much higher, even with depressed oil prices.  I don't know where this ends up but it's not pretty.

What I do know is that with over 900 total days cruising I personally will not get on a ship again unless I have a balcony cabin. I would not expose myself again to ever possibly being quarantined for 14 days in an inside cabin.  That alone puts the cost of long cruises out of my price range (even with no other cost changes)...so I'll be cutting back my cruising...a lot.

 

And yet, it appears that people are ready to return to cruising in droves, and at a higher clip than in 2019. I don't get it, but that is what several media are reporting including in this story in the Los Angeles Times. Can anyone explain this behaviour?!

https://www.latimes.com/business/story/2020-04-09/despite-covid-19-pandemic-cruise-fans-are-booking-trips-for-next-year

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2 hours ago, commodoredave said:

And yet, it appears that people are ready to return to cruising in droves, and at a higher clip than in 2019. I don't get it, but that is what several media are reporting including in this story in the Los Angeles Times. Can anyone explain this behaviour?!

https://www.latimes.com/business/story/2020-04-09/despite-covid-19-pandemic-cruise-fans-are-booking-trips-for-next-year

Yes you can find these people on the streets protesting the lockdown in America. You can’t fix stupid.

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These were clearly orchestrated stories that appeared simultaneously in several market  included one on A Current Affair in Australia.  However, the survey results placed on A Current Affair's Facebook page tells a very different story with 76% voting they would not cruise and 24% voting that they would.  Many of the people interviewed included professional cruise bloggers and others who have a vested interest in promoting the industry. They do not represent the views of the average cruise customer.

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49 minutes ago, Bron62 said:

These were clearly orchestrated stories that appeared simultaneously in several market  included one on A Current Affair in Australia.  However, the survey results placed on A Current Affair's Facebook page tells a very different story with 76% voting they would not cruise and 24% voting that they would.  Many of the people interviewed included professional cruise bloggers and others who have a vested interest in promoting the industry. They do not represent the views of the average cruise customer.

Even with these boards you have to take it with a grain a salt... They were really pushing going on cruises up until pandemic was declared most likely because many posters are associated with the industry.

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1 hour ago, CannyScotToo said:

Yes you can find these people on the streets protesting the lockdown in America. You can’t fix stupid.

Positive side, they will be guinea pigs. Somebody has to go on the ships first. Best it be them. Once they prove it’s safe I will go. The stupid say that they are willing to die anyway.

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On 4/19/2020 at 6:19 PM, Bron62 said:

So I guess I am erring on cancelling unless the industry can reassure me I can get my money back if it cannot deliver on my travel package.

Just execute your thinking.  My take, keep control of your funds, it will remove the stress and worry.  The cruise lines have too many ifs’ right now especially with refunds.  Perhaps move the  booking to 2022.

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On 3/24/2020 at 10:13 AM, TYinPalmSprings said:

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 .

I couldn't agree more.  I have filled out multiple surveys on what would turns people off and what might make people return:

  1. If one pax/demographic needs a doctor's note, we ALL should.  What good is it to bring a note saying you are over 70 and fit to travel if you are to be exposed to even one "supercarrier" who is unaware of symptoms?  Also, anyone ever hear of "age discrimination"?  I find it laughable that an erstwhile progressive industry was so quick to adopt so biased a policy as soon as their bottom line was hit.
  2. Get rid of these non-refundable deposits.  You want us to sail?  Stop forcing us to invest in your bottom line and return to the former flexible policies that allowed us to plan 2 years out without losing money if we were unable to predict some unforeseen circumstance that prevents sailing.
  3. Get rid of the oxymoronic mandatory gratuities.  A source of great debate, these tips and the requisite reductions in staff it has resulted in a noticeable drop in service on ships.  It is insulting to be forced to pay a tip or risk poor service.  We have always been overgenerous tippers, BUT now that they are tacked on automatically, that's it.  The arrogance of expecting more by leaving an envelope just furthers the perception that cruise lines have shifted from a luxury all-inclusive experience to a perennial pocket-picking exercise. What's next? Three tips?  Four? Pay your people what they are worth, bundle it into my price and move on. And let the people who don't tip suffer the consequences, which ought be basic service at worst.
  4. Get rid of the junk sales.  Every cruise now has the main drag lined with junk sales. Cheap scarves, watches, T-shirts, etc.  These overflow into the dining rooms and are all meant to maximize the bottom line. There are no bargains here, but they do create SIGNIFICANT overcrowding, and now, an increased and intolerable health risk.  Get rid of them. Charge me $100/person more, but get rid of them.    

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I think the CEOs are history!

 

So congress is starting  hearings ( yeah I know those kind of witch hunts ) but you can be sure the press from it won't be flattering and will surely make the evening news as they like that kind of "Dirty Laundry"

 

Let's not forget the daily evening news on Princess trapped in Japan.  By early February every Cruise line saw the risk and outcome if ANYONE caught SARS-CoV-2 and came down with COV19, yet they allowed sailings to continue thru early March.

 

Then the unreported illness and transportation of very sick patient that later died without any notification to port authorities, treating doctors or any information to passengers and NO precautions once known that illness was on the ship is simply more then irresponsible, it is unlawful! 

 

Now you got the WSJ article as well as MSN: 

https://www.msn.com/en-us/money/companies/cruise-ships-set-sail-knowing-the-deadly-risk-to-passengers-and-crew/ar-BB13tPcs

https://www.wsj.com/articles/cruise-ships-set-sail-knowing-the-deadly-risk-to-passengers-and-crew-11588346502

 

Pretty egregious timelines and behavior in the WSJ.    Can't wait to see how the CEOs appear but think they will need to take the fall.   Looks like a repeat of 737Max tone death reality distortion view from Boeing CEO. 

 

But my opinions CEOs who put business above the welfare of the customers in good times can escape sometimes being disingenuous, but like boeing CEO Muilenburg a Zebra  can't hide nor change it's stripes with the tide pulls back and with this current situation everyone's is exposed. 

 

Sadly the cruise industry is going to be on ice for a while, likely with big leadership changes, a must to come back and regain the trust of the public.   I for one would probably cruise again, but even more cynical of the experience.

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On 4/21/2020 at 5:31 PM, CannyScotToo said:

Yes you can find these people on the streets protesting the lockdown in America. You can’t fix stupid.

Yes well you can’t fix ignorance either. 

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