There is no denying that 2020 has been a devastating year for the travel industry, particularly cruise lines. Because of the worldwide coronavirus pandemic, cruise lines have been shut down for months and have lost billions of dollars of revenue. Furthermore, rapidly changing protocols, poor publicity, and ongoing uncertainty around the globe continues to impact cruise lines and their return to operation.
How will cruise lines eventually resume sailing, and which cruise line will recover the best in 2021? The answer will not be a simple one.
How Cruise Lines Are Surviving 2020
Since the initial suspension of sailing in mid-March, cruise lines have taken many steps to keep their businesses viable. One of the earliest steps was offering booked passengers future cruise credits and bonus offers to defer refunds, which kept those already paid fares as capital for the cruise lines.
As the pandemic stretched on, both onshore and ship-based staffs were cut, and many employees who remained took salary cuts to further lower payroll costs. At the same time, cruise lines began to sell stock, bonds, and secured notes to raise capital to ensure the continuation of operations even as no cruises were setting sail.
Because ships aren’t being used, many vessels have been put into different layup stages. This minimizes personnel on the ship and lowers operating costs by as much as 60-65 percent per vessel. While this can cause delays when resuming operations, it is a good measure to further conserve funds until sailing can resume.
As weeks stretched to months of unused vessels and further extensions of cancelled cruises, larger cruise lines began reorganizing their fleets. Older, less updated ships have now been sold or scrapped, and while those fleet changes may already have been planned long before the pandemic, the stop in operations accelerated the timeline for removing ships. Similarly, some cruise lines have deferred debt on newly built ships, or rescheduled new builds to delay the construction and hold off on further expenditures.
As a final measure, some cruise lines have been able to secure loans and credit lines from investors, leveraging the company in order to keep minimal operations going until ships can sail again.
How Cruise Lines Can Recover
Despite all the measures cruise lines have been able to take to stay viable through this crisis, recovering from the extended shutdown will be a challenge. Many factors will play a part in the industry’s restart and recovery, and two types of cruise lines will be best able to handle the evolving situation.
Larger, more diversified cruise lines will be able to restart operations wherever in the world restrictions may be eased, permitting some parts of the company to begin drawing in revenue even if other areas remain locked down.
These lines may be the first to restart operations, but they will also need to continually refine health and safety protocols for passengers and crew members as new strategies are devised to combat coronavirus transmission.
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The first ships to set sail again will be under heavy scrutiny to ensure not only are they proceeding safely, but also that there are no further outbreaks or health dangers onboard.
Smaller regional cruise lines may also be able to recover quickly once their area of operations permits sailings to resume. Because these smaller lines often hire more local employees and serve local communities rather than as many international travelers, their sailings could be easier to restart and get to a sustainable capacity for business revenue.
This also depends, however, on their preferred ports of call welcoming cruise travelers again, and different ports of call may have different health and safety procedures to follow, which can make coordinating itineraries more challenging.
All cruise lines will need to remain vigilant and flexible during the initial weeks and months as cruises resume. Transparency about health and safety protocols will be essential to reassure passengers as well as to encourage new bookings.
Cruise lines will need to be rigorous about their adherence to safety protocols and health measures, ensuring all passengers and crew members are in compliance with established procedures and recommendations.
Furthermore, cruise lines will need to focus on providing a satisfactory and enjoyable onboard experience for passengers. While some changes to how cruises operate and different ship activities are inevitable, even dedicated cruise lovers may be discouraged by too many restrictions or limited options on board. This is a balance that cruise lines will be able to refine as they set sail again and receive feedback from passengers.
In order to attract passengers back as sailings resume around the world, all cruise lines will need to create deals and package offers that can entice more travelers to set sail. More flexible cancellation options are also essential so travelers can feel their vacation investment is protected in case of a sudden outbreak, additional shutdowns, or any signs of illness.
Which Cruise Line Will Recover the Best in 2021?
Ultimately, every cruise line will need to institute whatever policies it feels are best for its passengers and crew members, while complying with the requirements of each port of call they visit. Large, well-known cruise lines such as Carnival and Royal Caribbean are likely to recover quickly with phased-in operations when tensions ease in different areas.
Similarly, Disney Cruise Line will likely recover well thanks to the better financial solvency of its diversified corporation and the devotedness of its most dedicated fans.
Smaller, localized cruise lines such as river cruises, Bahamas Paradise Cruise Line, Windstar Cruises, and similar operators may also be able to restart smoothly and quickly, recovering well once they are able to set sail in their respective regions.
Regardless of size, it will be tricky for cruise lines to set sail again and even a small outbreak could be devastating, not just for the affected cruise line, but for the entire industry.
Undoubtedly cruise lines will be cautious with initial sailings, and they will work closely with port authorities and health departments to ensure the safest possible operation for passengers, crew members, onshore staff, and vendors in ports of call.
While cruise lines will undoubtedly still struggle with changing operational needs in early 2021, as the year progresses and sailings are completed successfully, more and more cruise lines will be able to reinvent their operations in safe, effective ways, and cruise passengers will once again have many travel options to choose from for their next oceangoing getaway.
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