Cruise industry holds a bleak outlook for 2021

GlobalData 23 February 2021 (Last Updated February 24th, 2021 09:49)

Cruise industry holds a bleak outlook for 2021
Credit: Fotos593 / Shutterstock.

As international air travel looks set to start its recovery in 2021, cruise operations remain banned across most of the world, posing a bleak outlook for the industry this year.

Leading cruise player Royal Caribbean recorded an adjusted net loss of $3.9bn in 2020, reflecting the catastrophic effect Covid-19 has had on the cruise industry. The concept of staying on one vessel for weeks, or sometimes months, at a time with a variety of people from different destinations is risky in the current Covid climate. The nature of cruising means that the industry could be one of the last to meaningfully start its recovery process.

Another suspension for relaunch dates

Most cruise operations were suspended in March 2020 as Covid-19 was recognised as a global pandemic. Operations across major companies such as Royal Caribbean, Norwegian Cruise Line and Princess Cruises are currently suspended until at least 1 June 2021 and other cruise companies have similar dates.

The prolonged suspension of operations is costing a fortune for cruise operators. For example, the suspension of cruising is costing Royal Caribbean between $250m and– $290m per month. Countries worldwide are still limiting international travel and are only opening borders up to certain destinations through air travel. Canada’s Minister of Transport for example, announced that cruise vessels were to be banned from Canadian waters till 28 Feb 2022. This is unlikely to be the last nation that will make a sweeping declaration such as this, as many will remain skeptical to opening up maritime borders across 2021, due to risk of a mass infection.

Positive PR is critical for future recovery

Flexible booking policies are imperative, where passengers can either gain cruise credit, amend their booking or just have the power to cancel a trip if the Covid-19 pandemic continues to wreak havoc on future travel plans. Any negative press has the ability to tarnish cruise company reputation’s further, all at a time when consumers will need to feel confident about their future bookings. Future, highly publicised stories about Covid-19 breakouts on vessels will only prolong recovery and could send some companies over the edge.

The ‘end game’ of when cruise operations will be fully functional remains uncertain. Cruise companies should be publicising how they plan to safely resume operations to help heal any negative sentiment towards containment on vessels. Whether this is through sharing new cleaning protocols alongside health and safety measures or even explaining what potential future excursions may look like, companies should remain visual in the consumer eye whilst in a bleak situation.