‘A bump in the road’: Cruise CEOs confident cruises will resume in U.S. in 2020
Cruise CEOs say they are confident their companies will rebound after the worst seven months in the industry’s history.
At the annual SeaTrade Cruise conference, held virtually this year, the leaders of Carnival Corporation, Royal Caribbean Group, Norwegian Cruise Line Holdings and MSC Cruises expressed optimism about the state of the industry. The executives said they anticipate a cruising comeback in the U.S. soon and again urged U.S. health authorities to give them an opportunity to prove cruising can be done safely during the COVID-19 pandemic.
“This is a bump in the road,” said Frank del Rio, CEO of Norwegian Cruise Line Holdings. “We will not cruise until we believe it’s 100% safe to cruise. It’s coming soon. Whether it’s Dec. 22 or Jan. 3, I think we’re in the ballpark. If a couple of things go our way, we could be sailing again soon.”
SeaTrade originally planned to hold the conference at the Miami Beach Convention Center in April, but had to reschedule for a virtual conference this week.
The CEOs said they are optimistic cruises will resume in the U.S., the industry’s most lucrative market, this year thanks to a solid base of unwavering cruise fans and a commitment from the companies to test all passengers before boarding. They did not say what kind of tests will be used or when passengers will be tested. A panel of health experts hired by Royal Caribbean Group and Norwegian Cruise Line Holdings previously recommended companies test passengers between five days and 24 hours before boarding.
Cruise companies hope testing will create a controlled environment, limiting the risk of the virus getting on board. Even so, as the virus continues to spread on land, it will likely spread at sea, said Carnival Corp. CEO Arnold Donald. Companies are working to beef up medical centers and procedures to isolate people so that those who fall ill can be treated.
“There’s no perfect system to prevent it,” said Donald. “We’ve spent an enormous amount of time on what happens if there’s a case on board.”
Royal Caribbean Group CEO Richard Fain said the company would likely start with what he called “test cruises” and then build up slowly to short cruises.
“I do think that’s going to start this year,” he said.
Carnival Corp. and MSC Cruises resumed cruises in Italy in September, available only to Italians. Donald and MSC Cruises CEO Pierfrancesco Vago said they are receiving high satisfaction feedback from customers so far.
“We have a huge base of previous cruise goers,” Donald said. “I don’t think the industry is going to be faced with a long-term challenge here.”
The display of confidence comes less than a week after the White House blocked the CDC from banning cruises until February 2021, as it had planned to do. Instead, the agency’s no-sail order extended just until Oct. 31, paving the way for cruises to resume as soon as November without another extension.
Carnival Cruise Line has canceled all U.S. cruises through December, except for cruises leaving from PortMiami and Port Canaveral, which are on track to start on Nov. 1. Royal Caribbean Group and Norwegian Cruise Line Holdings canceled U.S. cruises until December. Virgin Voyages and Disney Cruise Line are selling December cruises.
Del Rio said it will take his company at least 60 days to bring a ship from laid-up status to ready to operate passenger cruises. Donald has previously said it will take Carnival Corp. 30 days.
The industry first shut down on March 13 amid COVID-19 outbreaks on several ships. Since then, the CDC has repeatedly extended its ban on cruising in U.S. waters as companies have struggled to prevent outbreaks among crew after repatriating all passengers. At least 111 passengers and crew have died from COVID-19, and the virus has affected at least 87 ships — 34% of the global fleet — according to an investigation by the Miami Herald.
Since March, cruise companies have endured record financial losses and layoffs. People in the U.S. whose work supports the industry, like longshoremen and travel agents, have had their hours cut or their jobs eliminated entirely. Initially, those workers received unemployment assistance from the state and federal government. Now, those who are unemployed in Florida are getting a maximum of $275 per week after the state cut federal assistance and another relief bill remains stalled in Congress. Cruise companies, which are incorporated abroad and flag their ships abroad, were not eligible for direct federal aid, but they have been able to borrow at reduced rates with aid to the federal reserve.
Throughout the fall and summer, border restrictions and expensive travel mandates caused a months-long delay in repatriating thousands of crew members, whom companies stopped paying after halting passenger cruises. Some crew members are still at sea without pay waiting to be sent home. Workers continue to contract COVID-19 on laid-up ships.
Industry executives had planned to meet with Vice President Pence on Oct. 2 to discuss plans to resume cruises, but the White House canceled the meeting after President Donald Trump and several others in the administration tested positive for COVID-19.
Donald did not say when the meeting will be rescheduled.
“We’re collaborating with everyone, there’s constant dialogue with various parties,” he said. “We’re cautiously optimistic.”
This story has been updated to include new information about Royal Caribbean Group cruise cancellations.
This story was originally published October 6, 2020 at 1:35 PM.
