The cruise industry has made the news a lot in recent weeks both during and in the wake of the COVID-19 crisis. With cruise ships having to sit in harbours, thousands of passengers still onboard some having contracted the virus, others still at sea as lockdowns came into force, and bailout requests being denied, the impact is set to reverberate for years. Despite this, as of the end of March 2020, bookings for the year ahead showed an increase of nine percent compared with a year ago.
So, what is the actual impact on the industry, where do we stand now – and what happens next?
What the numbers say
Throughout the current crisis, the cruise industry, like many others that rely on tourism, travel and simply getting people through the door, the main aim at this time is survival. There is no doubt the impact has been felt financially, with Carnival, the biggest global cruise group, having over 80% wiped off its share price within a matter of weeks.
This not only represents billions of dollars in lost investment, but also in potential income for the ports of call, towns and cities that have benefited from the accompanying tourism. With some 314 cruise vessels registered around the world, each with an average of 2,750 passengers and crew on board, the spend on daily calls in ports and cities alone comes to almost US$9 billion a year; and that is excluding onboard spending.
A closer look at the demographics suggests that while the average age of cruise passengers lies around 47 years with 15% of all passengers in the 40-49 age group, the median age is significantly higher with 60-69 year-olds comprising 19% of all passengers. It is this age group that gives the most cause for concern since it corresponds with the high-risk age group of those most vulnerable to Coronavirus.
Adapting to change
With the industry’s core demographic facing a longer lockdown than most, the challenges are far from over. What follows the shock and survival will be adaptation and change.
This has already begun with the delayed resumption of many cruises. The “downtime” is now being used to revisit vessel cleaning between passenger change-overs, hygiene and food-handling processes, and to investigate the air-exchange in terminals as well as onboard.
In parallel, cruise operators including Royal Caribbean and Disney Cruise Line are reportedly implementing pre-departure “no touch” temperature checks for passengers and crew as part of a potential two-stage screening process (the second stage reserved for certain passengers reporting temperatures above 38°C), to address potential passenger health concerns.
For an industry that prides itself on its speed of boarding – curb-side to ship-side in 40 minutes – these changes and inevitable delays look set to challenge and re-shape the industry norms as we know them. That is before we even get into the structural adaptations for the vessels or into the terminal building designs to be better prepared for similar situations in the future.
The silver lining
This difficult period will pass. And when it does, people will still want to go on cruises – just as they will want to fly, go to restaurants and see live music and theatre. As I noted earlier in this piece, booking data suggests a modest uptake in cruises to Europe and the Caribbean for 2021. That shows that the appetite has not quite disappeared amongst the cruise-going public.
The silver lining in the current situation will lie in both industry adaptation and in passenger confidence. And with that will come the opportunities to improve, strengthen and build resilience in the industry – perhaps even more sustainably – so that improved passenger and operational experiences may become part of the new standards in cruising.
I will be exploring what these changes might be in future articles. Until then, if you would like more information or would like to discuss your current needs, please contact us today.