Post-COVID Cruise Industry Views: 'strong demand' vs. 'adrift'

Cruises set for strong demand post-Covid
GlobalData 09 Jul 2021 https://www.ship-technology.com/comment/cruises-demand-post-covid-19/

Cruising constitutes an attractive holiday option, with new cruise experiences further boosting bookings for travellers post-Covid.

Countless lockdowns and travel restrictions have left travellers itching to get back onto the waters and with such a long downtime, cruises look set for a strong rebound post-Covid, driven by high-spending markets.

Demand for cruises pre-Covid was strong. A GlobalData survey (Q3 2019) revealed that, globally, 15%* of consumers typically went on a cruise holiday. With high-end experiences and the ability to travel to stunning locations, cruising is likely to soar in popularity post-Covid. With the inability to cruise for so long, many will be desperate to regain freedom and cruises are attractive. Despite pandemic-cautious travellers staying away from crowded areas, elevated health and safety measures onboard vessels will go some way to quashing concerns and have not put many travellers off booking.
Future bookings are strong

Pent-up demand for cruises is high, numerous companies have announced record sellouts and releasing future schedules early has become commonplace. P&O cruises sold out within six hours of its 40-day 2022 Caribbean cruise going on sale while Virgin Voyages and Crystal have released 2023 itineraries early to capture future demand.

Demand for cruising is high as travellers continue to dream. Cruisers are some of the most loyal travellers and spending an extended period away from the sea has been heartbreaking for some. Demand is considerably high for cruises in 2022/23 and many lines have responded to capture it. With travel restrictions constantly changing, cruisers are happy to wait longer so their experience is less restricted by Covid protocols. With a strong response for future bookings, cruises look set for high occupancy and should focus on opportunities to up-sell luxury experiences to those making up for lost time. Moreover, new ships, including Virgin’s Scarlet Lady, offer a reinvigorated cruise experience set to attract new cruisers looking for a high-end, nontraditional offering, which will further boost future demand.
Luxury cruises attractive for pandemic savers

A live GlobalData poll has demonstrated that some travellers will have higher budgets for travel post-Covid. 30%** of global respondents said they have a ‘slightly higher’ or ‘significantly increased’ budget for travel compared to pre-Covid times.

Luxury cruises could be an attractive proposition for pandemic savers. With limited means to spend, some have built up substantial savings and travel is a great way to spend. The pandemic has led some travellers to treat themselves by opting for luxury options or a once-in-a-lifetime trip. Cruise companies are well-positioned to respond by focusing on luxury offerings and longer itineraries, taking in untouched areas of the world. Offering an elevated experience is likely to encourage an increased level of spend, providing a much-needed cash boost for cruise companies. With many options, cruises are set for an increase in high-budget travellers seeking luxury in a post-pandemic world.

With loyal cruise travellers desperate to get back on the waters and travel budgets increasing for some, cruise companies look set for a strong revival as they begin to recover from Covid-19. New ships and new experiences will be vital to attracting new cruisers, and the industry is set for a strong rebound.

* GlobalData Q3 2019 consumer survey

Cruise industry adrift in a post-COVID-19 world
Kathryn Robinson 9 July 2021 https://www.eastasiaforum.org/2021/07/09/cruise-industry-adrift-in-a-pos...

The early focus during the COVID-19 outbreak on cruise ships as ‘petri dishes’ of infection has been eclipsed by the enomous economic and health impacts of the pandemic. But early outbreaks on mega cruise ships presaged the global dimensions of the outbreak. The Diamond Princess was quarantined in Yokahama in February 2020 as over 700 of its 3700 passengers were infected and over a dozen died. Subsequently, its sister ship, the Ruby Princess controversially disembarked 2700 passengers in Sydney on 19 March 2020, seemingly the result of failures in Australia’s quarantine procedures. It infamously resulted in 660 cases and 21 deaths in Australia, including seeding an outbreak in northern Tasmania.

The mass pleasure cruising industry is a relatively recent global economic phenomenon. Based on mega ships that carry thousands of passengers and staff, it was made possible by the globally interconnected economy that developed in the late 20th century.

Mass cruising is dominated by three large companies: Carnival, Royal Caribbean and Star Cruises. Carnival is the largest, with 100 vessels operating under 10 brands, one of which operates the Diamond Princess and Ruby Princess. These mass corporations benefit from the ‘leased sovereignty’ of registering their ships in so-called ‘flag of convenience’ (FoC) states. The most often used are Panama and the Bahamas where they face minimal regulations on taxes, wages and labour conditions.

Cruise ship crew and hospitality staff are, like merchant seamen, international labour migrants driven by hopes of bettering their futures for their families. The COVID-19 pandemic revealed the precarity of their employment.

COVID-19 exposed weaknesses in the FoC business model. The large ships were caught at sea, unable to sail to safe-haven ports even after they obtained permission to disembark passengers. The FoC countries do not have ports able to accommodate these huge ships. The ships have been effectively ‘orphaned’, sharing limited anchorages and occasional visits to ports at non-FoC locations across the world.

Passengers on the Ruby Princess disembarked in Sydney and returned to their homes in Australia and overseas — but what about the multinational crew? The Australian government did not permit them to disembark, and the cruise company required at least some to remain on board to maintain the ship. Even without passengers, these floating hotels need 100 or more crew to keep them functioning.

There were problems in repatriating crews to their homelands as borders closed and air travel dried up. The Ruby Princess crew were also stigmatised by their association with the virus and many of those remaining on board were infected.

The Ruby Princess was eventually relocated from Circular Quay in Sydney to the Grain Terminal at industrial Port Kembla in Wollongong. The union consciousness of the region resulted in an assitance project led by Reverend John Kewa of the Mission to Seafarers, joined by the trade unions and local government. Volunteers packed 1200 care packages comprising food, gifts and phone cards for the workers left on board ‘to protect the dignity and welfare of the seafarers’.

The ship eventually sailed from Port Kembla on 23 April 2020, accompanied by tugs displaying water cannon salutes, the symbol of recognition of heroic seafarers. It went to an offshore mooring in the Philippines, joining a number of other ships stranded in this part of the world. Singapore and Johor also became hosts for ships that were moored offshore with minimum crews needed to maintain them.

So what is the future of this industry that has been a valued source of employment for many migrant workers? In September 2020, 300,000 crew were reportedly still stuck in ‘COVID-19 limbo’ on ships, unable to return home. These numbers included cruise ship crew and merchant seaman. Many faced long waits and long journeys home without pay. The problem remains unresolved.

Cruise companies appear hopeful about that they will be able to resume sailing and some smaller ships already began sailing with ‘hyperlocal’ itineraries within national borders towards the end of 2020. Some of the older, larger ships have been scrapped.

Carnival and Renaissance submitted a set of operating proposals to the US Centers for Disease Control (CDC) for approval to sail again. The CDC has been reluctant to give approval for the large ships to sail again in US waters, but some sailing in US and Caribbean waters resumed in June 2021.

While cruise companies report that they have plenty of advance bookings from prospective passengers in the United States, Australia and Europe, infection rates remain high in many of the source countries for maritime and hospitality workers, and vaccine rollouts are slow. Prospective workers face border closures and diminished transport links in reaching ports of embarkation.

The question remains whether the cruise industry can be a source of work for migrant workers from the global south under new proposed conditions of employment, such as requirements for vaccination. Great effort will be needed to ensure that conditions are improved through compliance with new health and safety requirements and fair wages.

Kathryn Robinson is Emeritus Professor at the School of Culture, History and Language, The Australian National University.