Here’s a hard fact to accept: the coronavirus is the cruise industry’s worst enemy. With that being said, it’s also the worst enemy of pretty much every industry. Cruises, though, are affected perhaps even more than any other form of travel. The prolonged and confined nature of a cruise trip makes them that much less appealing to travelers right now, and that’s not even to speak of the awful press of quarantine situations aboard ships like Diamond Princess. In short, cruise lines are suffering in a variety of ways. On March 19, Carnival reported on their first quarter of the year, and it looked quite bleak: a net loss of $781 million has already occurred, and the worst of the virus’ effect is yet to be felt.
So, is the situation a complete loss? Well, economically, there’s not a whole lot to do. Of course, there’s a whole lot going on behind the scenes to attempt to salvage the finances of these companies. Carnival, once again, spoke to this fact in their earnings report, saying that they were seeking additional funding and were attempting to improve their liquidity. Despite their best efforts, though, they expect a serious net loss by November, and are refusing to make any estimate as to how much this could be.
And this makes sense. The coronavirus crisis is one that is, at least in the United States, currently characterized by uncertainty. No one really knows how the spread of the virus is going to play out, so cruise lines (and all other companies) are merely left guessing what their best moves should be.
However, there are a few routes that seem to be promising. Carnival’s bookings for 2021 appear to be higher than last year, and other companies are currently running sales until 2021 to encourage people to look past the brunt of the crisis and book cruises for when it dies down. Encouraging bookings in 2021 could be a good move for a couple of reasons. It sidesteps the anxiety that people feel over traveling right now, avoids encouraging travel when the virus needs to be quelled, and gives consumers something to look forward to that doesn’t involve COVID-19. There are also murmurs of a vaccine being developed and possibly being ready in a year or so, meaning that a focus on future travel could be the wisest move for cruise lines right now.
In the meantime, though, what should these companies do? Well, it’s hard to say. To continue offering their services could be the right move in some cases, though it will likely only result in net losses. One potential solution could be to shut down current services and to offer ships to the U.S. government to be used for emergency hospitalizations or housing. This allows the ships to still be used in a relevant way, help those in need, and potentially increase company P.R.
Obviously, this is all speculation, but one thing is clear: people aren’t too excited to be going on cruises right now! And we don’t blame them. This isn’t some type of death knell for the industry, though, but rather a low point that can be used to refocus and rebuild. There’s lots of cool developments to look forward to, as well, so hopefully there will be plenty of room for growth once the virus dissipates.