COVID-19 shakes cruise companies

COVID-19 shakes cruise companies

March 14, 2020 - The cruise industry is in a serious crisis. Cruise companies are forced to temporarily cease operations, port operators, dealers and service providers at the ships' destinations suffer a drop in sales, Fincantieri closes the Italian shipyards for two weeks and ... and ...

The President of the United States considers it appropriate to declare a national emergency with regard to COVID-19. The US administration is imposing an entry ban for Germans, Austrians and Swiss until April 12, 2020. Passport holders from all other Schengen countries are also affected by the entry ban. Countless ports in the Mediterranean, the Persian Gulf, the Caribbean, India etc. prohibit ships from entering.

Well-known international shipping companies respond to this unmanageable situation with interruptions in their cruise programs. AIDA Cruises, for example, will cease operations on its 14 cruise ships until the beginning of April. Princess Cruises, which is also part of the Carnival Group, is interrupting ship operations for their 18 ships for two months. The resumption of business is scheduled for May 11, 2020. Norwegian Cruise Line and its subsidiaries Oceania and Regent will cease operations between March 13th and April 11th. TUI Cruises cancels individual trips, but wants to continue business operations. Viking is suspending all river and ocean voyages through May 1, 2020. The list is not complete!

Holland America Line - MS Nieuw Statendam - meeting on the high seas

Holland America Line - MS Nieuw Statendam - meeting on the high seas


All cruises planned by US ports between March 14 and April 11 were "voluntarily" canceled by the cruise companies. In general, it can be stated that the industry officially shows understanding for the measures announced by the authorities. Different types of compensation are offered to guests affected by business interruptions. The compensations range from "money back" to rebooking in connection with Future Cruise Credits. In general, these “credits” correspond to 125 percent of the original travel price. Travelers affected by the cancellations will be informed as soon as possible.

The loss of sales is a significant burden for companies. This becomes clear with the example of Princess Cruises. The company says it carries 50.000 passengers a day. Assuming that the company generates an average of 200 US dollars per day for each passenger, the shortfall in sales for 60 days of business interruption is 600 million US dollars. No wonder cruise company stocks have plunged into the stock exchanges.

In view of the financial impact and the decline in visitors to the ports of destination, only tough environmental activists are likely to be satisfied.

 

 

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