Are the dark clouds that have been looming over cruising starting to lift?
I am Gary Bembridge and I look at a series of events that has made cruise lines and passengers
suddenly get more optimistic. I discuss what you need to know, along with some important
watch-outs which could mean all this optimism may be ill-placed and timed.
Cruise Line executives are more upbeat and optimistic, despite on-going massive losses,
having to raise more money to keep them going and with many just cancelling cruising until
June, including Carnival, Disney, Windstar and Norwegian Group, along with cancellations
now starting for the Alaska season departing in Canada by lines like Princess, Holland
America and Seabourn.
This all because the vaccine roll out, and its impact on cases, hospitalisations and
deaths, is leading to a significant shift in the sentiment and stance governments and
authorities have towards cruising. They are starting to commit to specifics around cruising.
In the United States, after waiting for four months, the lines are getting the much delayed
technical specifications for running the test cruises required in the Framework for Conditional
Sailing soon.
Royal Caribbean International CEO Michael Bayley said on a results call a few days before
recording this (and I quote): "We're literally expecting the technical specifications any
day soon. It's an intergovernmental process between several agencies within the government
that are reviewing the technical specifications"
He went on to say that (and I quote) "as they've explained to us on many occasions, this really
is about what's happening with the virus. They've assured us on several occasions that
when these indicators really start move in a very positive way they'll start working
with us to get us back into operations. And that's exactly what we're seeing now"
In another sign of progress, the CDC asked Royal Caribbean to supply details of two technology
changes that helped make sailings in Singapore successful. The eMuster process, removing
need for guests to congregate for the drill, and the contact tracing process. This combines
a wearable device (called Tracelet) which can tell who has been in contact with an infected
person and AI face recognition linked to CCTV to check visually as well.
Across in the UK, the government has announced a pathway with dates for travel to open. By
mid-May they hope to allow domestic UK travel and by mid-June international travel. The
lines sailing out of the UK are now starting a dialogue on what it means and when a return
and in what form is possible
As I have covered before, the UK Maritime Minister has indicated they are comfortable
with the proposed protocols, which reflect what has been submitted in the USA and also
being used in sailings by MSC Cruises, Costa and Mein Schiff in Europe, and Dream and Royal
Caribbean out of Singapore.
The roll-out of vaccines has also driven confidence by travellers to make bookings, and the lines
are reporting a boost in these in the USA and Uk especially.
There are four things worth noting.
(1) bookings have increased by a lot (over 30%) in the first two months of 2021 compared
to the last two months of 2020.
(2) The increase is mostly been driven by people over 65! Again this is something Michael
Bayley, CEO of Royal Caribbean International highlighted, saying (quote) "I believe the
65-plus are getting vaccinated and obviously becoming more comfortable in booking.” As
more age groups also get vaccinated we will surely see the same optimism.
(3) Three-quarters of the bookings being made are new and not using future cruise credit
or the "Lift & shift" type of programs. So, people are now making new plans and trips.
Those three show the importance that vaccines seem to have in getting people motivated to
cruise again.
However, the fourth effect of this increase in booking has meant that prices are rising
too, as lines are finding (I assume) they are having to discount less to attract early
bookings
The lines have told Wall Street that pricing for later in 2021 bookings are now tracking
higher than 2019, while 2022 is around that same level.
However, do not draw too many conclusions from this and fear you need to leap in and
book.
There are still many deals available, and I am seeing what the lines generally are doing
is holding the headline fare but offering all sorts of incentives like cabin upgrades,
or more commonly bundling in drinks, Wi-Fi, gratuities and extra on-board credit into
that. So, as a traveller I still believe in many cases we are still looking at overall
costs being better. But one to watch, and I will keep an eye on that too.
However, despite all of this, all the lines still admit they have no idea when they will
be able to return to service - and also which countries and regions will be first.
Will other places open before the USA? This is possible.
Remember we already have cruises out of Italy, Germany, Taiwan, Japan and Singapore. Royal
Caribbean has arranged for Grandeur of the Seas to homeport out of Barbados.
I have previously reported that Norwegian Group has indicated to their crew that they
are exploring starting up in Europe before the USA.
Royal Caribbean are saying that when cruising does return, it will be in a phased approach,
and also may resume sooner in other parts of the world, such as Australia, China or
Europe as that may be quicker and easier. Bayley from Royal Caribbean International
adding (quote) “We’re literally in discussions globally. The point is there’s a lot of
opportunity starting to open up globally.”
Looking at the USA, even once they have the test cruise technical details, it will still
take time to digest, put in place any requirements, plan, recruit and run them. Then after that
the Framework For Conditional Sailing has a 60 day minimum period between the successful
test cruises and getting a licence to sail with paying passengers.
If you look at the timeline, optimistically we are talking some months away still, maybe
more like June or July, which is also what (as I reported before) many of the main cruise
port operators in the USA are saying .This is also likely at best the timing for the
UK. Though I have seen some cruise insiders saying August may be more likely.
However, on the plus side, lines are saying they are confident that by the end of 2021
or early 2022 they will be able to return most, or all of their fleet, back into service.
Carnival Corporation CEO Arnold Donald in a travel advisor event in the last few days
said (quote) "What I will predict is this: I think that certainly by the end of this
year, most, if not all, of our fleet, I’m optimistic, will be in action. I think there’s
a really high probability that all of them will be back by early next year."
It is really important to note this as you look at your plans, as the lines are saying
clearly that they will not be running all of the advertised cruises you can book today.
Even though they all have all their ships itineraries on sale, they are not going
to have a big bang all ships back at once restart.
There will be new cruises to meet the rules for opening on limited ships, itineraries
will get adjusted based on which ports will accept calls (which as we have seen with decisions
by countries like Canada may not be simple) and ships will be brought out in stages from
cold lay-up into service - the logistics to get them back , crewed and stocked is a massive
job.
So please still be cautious if are thinking of booking a new 2021 cruise, and carefully
assess any you have already.
There are some new indications on what the four main cruise groups (Carnival Corporation,
Norwegian Group, Royal Caribbean Group and MSC Cruises) are thinking on the vaccine requirement
for cruises.
All have said in public that they are seeing vaccine roll out as the key development that
is going to unlock cruising and enable it to resume.
Royal Caribbean Group CEO Richard Fain describes the vaccines as (quote) “the ultimate
weapon” in the industry’s recovery. But when pushed on if they will be required as
part of the protocols he says it’s too soon for answers, with much depending on how effective
the vaccines prove to be. But then went on to highlight recent data suggesting they were.
So that's interesting. He also says they are waiting for recommendations from their Healthy
Sailing Panel that designed the existing return-to-cruise protocols.
Interestingly also, in Royal Caribbean recent financial and media updates, they made much
of the crew support for Royal Caribbean's policy of requiring all crew to be vaccinated.
Saying a survey they sent to 70,000 crew members got a 98 percent response with 98% of them
supporting the vaccine policy for crew.
The Carnival Cruise Line’s Chief Communications Officer Chris Chiames said in an interview
with media the other day that (quote) “The faster we can all get vaccinated, the better
for everything, including cruising.” When asked if he was saying that people would be
required to get a vaccine to cruise, he made clear that he was not saying that… although
he also didn’t rule out the possibility, (quote) “because we don’t know that .”
These lines will, of course, have come off the fence, or will be forced to make a call,
either way in the coming months before cruising reopens.
The protocols the lines are currently proposing around the world are the ones being used successful
by lines in Europe (MSC Cruises, Costa, Mein Schiff, Hapag Lloyd) and Asia (Dream and Royal
Caribbean), which of course do not include vaccines but do have testing, reduced capacity,
masks, social distancing, cruise line only excursions to maintain the bubble and so on.
However, with many travellers hoping that there can be some easing like the ability
to go on independent excursions or self-tour, the requirement for cruise passengers to have
proof of vaccines by the ports themselves to allow that could end up forcing the issue.
All something to watch as this will come to a head in the coming month or two for certain.
Despite all the optimism building, there is one potential threat that both governments
and cruise lines have called out. And it is worth keeping in mind.
And this is the threat of new variants of the Covid virus. As we have seen, the mutations
such as those out of the UK, South Africa and Brazil can throw things into turmoil and
set steps forward into a hasty retreat.
In the opening up plans for the country and international travel, the UK Prime Minister
Boris Johnson called out risk of new variants being more infectious or resistant to existing
vaccines as the main thing that could set back and stall plans to open up travel.
A similar warning was given by Royal Caribbean Chairman, Richard Fain, when talking about
risks as cruising looked to reopen.
So lots to think about in the coming weeks.
I hope you found this all helpful and interesting. I have hundreds more Tips For Travellers episodes
with updates, tips and advice, so why not enjoy another one right now.