Disaster at Sea – Cruise industry sunk by coronavirus?

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Hardly any other industry has been hit harder by the COVID-19 pandemic. As the coronavirus spread in the winter months – traditionally a most popular time for sun-seeking senior citizens from the Northern Hemisphere – cruise ship passengers were infected in their thousands. Ships were refused entry in port after port and cruises abruptly cancelled to offload passengers fast. All upcoming cruises were cancelled and since March, the cruise industry has been in 100% lockdown. This blog looks at the situation in July 2020 and what the future might hold.

Imprisoned at sea

For many people in the West media reports of corona-infested cruise ships were the first they heard about COVID-19. Or the first time they took the new coronavirus seriously. Winter sun-seekers who had set off on a dream holiday suddenly found themselves imprisoned at sea, stuck in compact cabins that were fine for sleeping and showering in but like a claustrophobic dungeon if you were not allowed to leave them. Cruise ships acted like petri dishes for the new virus. In early February, images of the Diamond Princess quarantined off Yokohama went viral – a cruise ship that had over 700 coronavirus infections, more than any country at that time except China. Dr Anthony Fauci, the top US infectious disease expert, was quite forthright: “People on a large ship all together – you couldn’t ask for a better incubator for infection.”

People on a large ship all together – you couldn’t ask for a better incubator for infection.

Dr Anthony Fauci, US infectious disease expert

The Centers for Disease Control and Prevention (CDC) issued a no-sail order for the USA on March 14 but its impact was initially limited. On March 15, for example, the Australian-owned Greg Mortimer set sail from Argentina for an Antarctic cruise. The first passenger fell ill on March 22 and when the ship anchored in Montevideo on March 27, more than half the passengers and crew tested positive for COVID-19. On April 10, 127 passengers (some infected) were allowed to disembark and fly home to countries around the globe. The infected ship’s physician was taken into intensive care in Montevideo along with a Filipino crew member who later died. For the passengers, the dungeon-like ordeal ended after a fortnight or so. But for the crew of the Greg Mortimer, the martyrium was only just beginning.

Lockdown from hell

Trapped for weeks in tiny windowless cabins, tens of thousands of cruise ship crews suffered a worse fate than even the strictest onshore lockdown. The CDC estimated that in April around 80,000 crew members were stuck on cruise ships off the US coast alone. Governments stopped crews from disembarking to prevent new cases of COVID-19 in their countries – even though the crews had been in quarantine for much longer than 14 days. Although some did catch COVID-19 and died, the vast majority were probably free of infection, but still not allowed to travel home. Thousands had been at sea for many months and their contracts had actually terminated. Many were no longer being paid. Disembarkation conditions were strict in the extreme: cruise companies were required to transport each crew member home via charter plane or private car, without using rental vehicles, public transport or taxis. The CDC even required company executives to accept criminal liability if crew members failed to comply with health authorities’ orders. By now, most of the crews have fortunately been released from their imprisonment and gone home. What they have left behind, apart from supposedly safe jobs, are the empty hulks of the one-time palaces of pleasure. 

Giant cruise liners anchored and idle off the Bahamas

Anchored and idle

What used to be massive moneymakers are now huddled, anchored and idle, off the coastline of Florida, in the Caribbean, off the Bahamas, in the Mediterranean, in Asian waters, off Australia or in the South Pacific. Satellite photos paint a depressing picture for cruise ship owners, operators, and would-be cruisers.

Whereas the initial CDC ban on cruises only applied for a month from mid-March, cruise lines now see the possible return to operations more realistically. In late June, Carnival Cruise Line, the world’s second-biggest in passenger terms, announced it was cancelling every North American sailing for August and September and not planning a return to service until October at earliest. Six months of nil earnings in an industry with huge capital outlays have turned big earners into equally large liabilities. After all, ships lying at anchor have to keep their auxiliary motors running all the time and are thus an ongoing drain on a cruise company’s finances.

Hardly surprisingly, the cruise industry is talking about fleet consolidation. Cruise giant Carnival Corporation, the world leader with around 100 ships, announced it would be disposing of at least six of its vessels. Norwegian Cruise Line Holdings, the world number three, also said ship retirements were likely. Most probably it will be older vessels that get scrapped or possibly sold to smaller cruise lines – if there are any takers. The losers are likely to be the cruisers who prefer the intimacy of smaller ships. Royal Caribbean’s two-year-old Symphony of the Seas is nearly five times bigger than the line’s oldest ship, Empress of the Seas. As economies of scale become more crucial than ever in an industry facing an uncertain future, it is fairly obvious which ship will survive.

Cruise industry: Quo Vadis?

Before the pandemic, the cruise industry was booming. Over 120 vessels were said to have been on order, an investment of around US$69 billion. Now, the cruise industry and specialist shipyards such as Meier Werft with yards in Germany and Finland are confronted by a three-fold threat: Will the travelling public come back? Will environmentalists or engaged politicians sink cruise shipping? Do overburdened destinations such as Venice, Barcelona, or Seychelles even want cruisers back?

First the cruisers: An survey conducted by the British newspaper The Independent in April discovered that three in ten of those who had previously been on cruises would not do so again. According to Tara C. Smith, professor of epidemiology at Kent State University, USA, cruise ships amplify the risk of infection, partly because of the close quarters and partly because passengers have no influence on the cruise company’s hygiene standards6. Environmental activists have long been attacking the cruise industry as major polluters, e.g. through dumping untreated waste, trash, and oily bilge into the world’s oceans or through the ships’ CO2 emissions. Although the industry has been getting its act together in recent years and improving its environmental record, it now faces a new political threat. US Representative Jackie Speier is sponsoring a bill, the Cruise Integrity Act, to reform cruise ship operations and drastically restrict all emissions. Speier does not think cruising should restart soon and agrees with CDC epidemiologist Cindy Friedman: “Nobody should be going on cruise ships during this pandemic, full stop.”

Nobody should be going on cruise ships during this pandemic, full stop.

Cindy Friedman, Epidemiologist of CDC

And what about the cruisers’ favourite destinations? The citizens of Venice and Barcelona, for example, were protesting about too many cruiser tourists well before the pandemic began. Now even the Seychelles, where tourism accounted for 25.5% of GDP in 2019, has passed legislation to ban visits by cruise ships until 2022.

So has cruise shipping any future? At the moment, it is too early to predict the industry’s chances of survival with any degree of certainty. The past history of the cruise industry, however, may leave some room for optimism: In the 1960s passenger shipping numbers fell by as much as 60% after the introduction of mass air travel and affordable package holidays. Cruise shipping seemed to have no future back then. Yet it not only survived but really boomed thanks to innovative ship designs, targeted marketing, and the concept of cruising for everybody. This industry has a legacy of resilient strength, and the new normal of post-corona holiday travel may well see the cruise industry revive – but only with radically revised hygiene concepts and a heightened degree of environmental sensitivity.

In July, Germany announced a strategy to relaunch cruise tourism. With this guiding concept, Germany is among the first countries to slightly pave the way to a realistic comeback of the cruise industry. The shipping company TUI already announced to offer cruise trips on Mein Schiff 2 in late July. Major shipping company AIDA will slowly start their business again in August with short trips on cruise liners AIDAperlaAIDAmar, and AIDAblu.

If you would like to gain more real-time insights on passenger vessel traffic, feel free to use FleetMon Explorer. Find out where the fleets of popular cruise companies worldwide are located at the moment. Have a look at the major maritime passenger traffic lanes. Enjoy smooth real-time vessel tracking with FleetMon Explorer.