As the world begins to move into its new state of routine, the cruise industry has already started to question how to rebuild and consider its impact on the tourism industry.
In February 2020, the British-registered Diamond Princess was the first cruise ship to have a COVID-19 outbreak. The ship was quarantined off Japan’s coast, resulting in over 700 infections and 9 deaths. Not long after, every cruise ship would find themselves docked off the shores of every major cruise port worldwide, where they would sit for over a year. What once was an industry that was the pinnacle of fun and luxury that was the dream of many has now been seen as a virus-filled death trap that left many potential travelers worried.
Unlike many other forms of travel, cruises are bought and paid for months in advance. Contracts are made with their vendors for almost years and follow a projection cycle. Due to the immediate cancelation and slow opening, many of the world’s top cruise lines have found themselves in massive debt, and many of the ports that the cruises relied on needed help to bounce back. Local vendors and suppliers began to worry because their economies strictly relied on the revolving cruise industry and the business that was brought in from it. Since most cruises are registered in countries such as the Bahamas or Panama, they would constantly work with local suppliers for certain foods or experiences. With the world shutting down, many of these local suppliers were afraid of business not returning soon.
As the world began to open, many seasoned travelers finally had the chance to go out and explore. The cruise industry finally had the chance to restart their voyages and compensate for their losses. The cruise lines took it upon themselves to have measures in place to ease travelers’ stress and worries. This would include a limited number of cabins and mask/vaccine requirements. After a year, cruises were slowly but surely sailing again, and those reliant on it could finally catch a break.
This past summer was the first time many cruise lines could relax restrictions since the pandemic began. While the numbers were overall great for the summer season, many lines still need to be projected to struggle, with many people traveling using tour credit. This, combined with the rise of fuel and food costs, has left many cruise lines being impacted and bearing the weight of increased costs. With the stock price of every major line cruise line having reached pre-pandemic levels and not reaching a higher rate, many fear that the cruise industry may have a recession of its own. This could result in many setbacks, such as fewer departure dates, fewer orders in supplies, and a shift in destinations visited.
Sources:
https://www.wsj.com/articles/norwegian-cruise-line-issues-soft-2023-earnings-guidance-amid-rising-costs-612943f4?page=1
https://www.wsj.com/articles/cruise-lines-cant-duck-their-debt-11656252181?mod=article_inline
https://www.cnbc.com/2023/02/28/norwegian-cruise-line-shares-fall-earnings.html