While analysts believe international tourism will need another two years or so to fully rebound, the cruise industry could arrive at that point sooner.
Boyden's perspectives on the news and trends that are transforming industries
The cruise industry, perhaps the hardest-hit of all by the pandemic, comprises a small part of the global travel and tourism sector. In 2019, only about 30 million of the world’s 800 million or so foreign travellers opted for a cruise. But up until the pandemic struck, it was growing rapidly, logging over 10 million more passengers in the past decade. It was also quite lucrative. The top three companies, Carnival, Royal Caribbean and Norwegian Cruise Line, brought in combined revenues of $38 billion in 2019, with operating profits of $6.6 billion.
Over the past year, as most ships remained docked indefinitely, cruise operators have been spending their cash reserves to stay afloat. Yet there is optimism amongst executives and investors. The world’s biggest cruise operator, Carnival, has managed to raise $24 billion of debt and equity in the past 12 months. Others have succeeded in tapping the market as well, The Economist reports.
The tide could be turning, and Carnival’s bookings for 2022 are trending upwards, according to CEO Arnold W. Donald. The industry overall is expanding its capacity. There are more than 100 new ships on order, none of which were cancelled during the pandemic. But apart from lingering trepidation on the part of tourists, changing rules for international travel and new laws in the U.S. pose real obstacles.
In Florida, home to the biggest cruise operators, battles are being waged over safety measures. As companies work to restore public confidence, the industry is arguing that passengers who have been vaccinated and test negative for COVID-19 should be allowed to embark. They are meeting with resistance from Governor Ron DeSantis, who according to the Miami Herald “refuses to budge from a state law he sought that bars the cruise industry from requiring passengers [to] be vaccinated.”
While Florida was one of the first, and certainly the most important to the cruise industry, many other states have banned or placed limitations on so-called “vaccine passports” as well. The industry is far from backing down, however, and cruise operators are coming up with ways to work around the bans. The outcome could have an impact on travel and tourism worldwide as companies in all segments try to navigate a safe return.