P&O Cruises is still planning a celebration for when new ship Iona arrives in Southampton to begin her maiden sailings but said it would “judge the mood of the nation” first. President Paul Ludlow said the new ship was looking “stunning” and would be “unlike anything ever seen before for the British market”. He said: “It’s our intention to keep her in Europe when she comes to Southampton and we will absolutely celebrate her arrival into the UK. It will be such a feel-good moment that it would be remiss of us not to. But we will have to judge the mood of the nation. “It’s difficult to predict the future at the moment, so until things are more certain, we will hold back with details of this event.” Speaking as he launched the line’s summer 2022 programme, Ludlow said Iona’s sister ship was still on track for delivery in December 2022 and that steel-cutting for this vessel was due to take place in Germany before the end of this year. He said bookings for the second half of 2021 were at the “upper end of historic levels”, those for spring 2022 had “surpassed the upper end of historic levels” and that summer 2022 pre-registrations were “akin to previous years”.
Ludlow said some bookings for 2022 were by customers whose 2020 cruises had been cancelled and who were redeeming their Future Cruise Credits. “The majority of people took FCCs over a refund when their cruises were cancelled,” he said. “And of those who took an FCC, 50% have utilised it already. So that leaves 50% who are still waiting to utilise it. There were some who had bookings for 2020 and 2021, so they have been waiting to use the 2020 FCC in 2022.” Ludlow also said that not all bookings were by loyal guests and that the “new to cruise market hasn’t completely gone away”. “In the first, three or four months, new to cruise volumes actually exceeded my expectations,” he said. “That’s slowed down a little bit but even so, it’s exceeded my expectations as to how many new-to-cruise people wanted to book.” Ludlow added: “For people taking their first cruise, the consideration period is lengthy. By the time they had invested all that time, [the pandemic] has not been enough for them to say ‘it’s no longer for me’.”
The two largest US cruise combines will not sail again until the new year at the earliest. The North American brands of Carnival Corporation and those of rival Royal Caribbean Group confirmed an extension of sailings until December 31 – joining Norwegian Cruise Line Holdings, which confirmed an extension of its suspension of cruises across its three brands until the end of 2020. The latest pause affects Carnival Cruise Line, Cunard North America, Holland America Line, Princess Cruises and Seabourn together with RCG lines Royal Caribbean International, Celebrity Cruises, Azamara and Silversea. Global ocean cruising has already been shut down since March due to the Covid-19 pandemic with many lines already cancelling cruises well into 2021. The US last week cleared the way for the cruise ship to resume sailing in American waters from November 1, but have yet to confirm when paying passengers will be allowed on board. The US Centers for Disease Control and Prevention’s ‘Framework for Conditional Sailing Order’ will see cruise lines operate itineraries with no passengers on board to demonstrate the effectiveness of Covid-19 prevention measures and compliance with CDC measures. Carnival Corporation chief executive Arnold Donald, confirming the extension of the pause in operations of its North American brands from December 1 until December 31, said: “Our highest responsibility and top priorities are always compliance, protecting the environment, and the health, safety and well-being of our guests, the people in communities we touch, our crew and shoreside employees. “We continue to work with the U.S. Centers for Disease Control and Prevention, and global government and public health authorities, as well as top medical and scientific experts around the globe, on a comprehensive plan for the eventual restart of cruising in North America. “With their collective guidance, we have developed and continue to update our enhanced health and safety protocols that are in the best interest of our guests, crew and overall public health. “Whenever we restart our cruise operations in the US, we certainly look forward to welcoming our guests onboard.” The date for restarting cruise operations will be communicated by each respective brand and available on their websites, Carnival Corporation said. “The company and its brands are also notifying crew members, travel professionals and other stakeholders,” the group added. RCG said: “Our primary goal continues to be a healthy return to service for our guests, crew and the communities we visit. “As we work with the CDC and others toward this shared goal, Royal Caribbean Group will be extending the suspension of sailings to include those departing on or before December 31, 2020, excluding sailings from Singapore. “Celebrity Cruises has already suspended their full 2020-21 winter programme in Australia and Asia. “Additionally, Azamara has suspended their 2020-21 winter sailings throughout Australia and New Zealand, South Africa and South America. “We will be reaching out to our guests and travel partners to share further details and address any questions or concerns they may have.” Welcoming the CDC’s pathway for return to service announced on Friday, RCG said: “While we are eager to welcome our guests back on board, we have a lot to do between now and then, and we’re committed to taking the time to do things right. “This includes training our crew in new health and safety protocols and conducting a number of trial sailings to stress-test those protocols in real-world conditions.”
Booking trends for 2021 indicate long-term potential demand for cruising despite sailings having been cancelled since the start of the coronavirus pandemic in mid-March. The glimmer of hope for the struggling sector came from Carnival Corporation despite reporting an average monthly cash burn of between $550 million and $770 million as dozens of ships remain idle, including some off the south coast of Britain. The world’s largest cruise group has started a phased return to operations with Italian brand Costa and German line Aida. Other brands and ships are expected to return to service “overtime”. The initial cruises will continue to operate with adjusted passenger capacity and enhanced health protocols developed with government and health authorities, and guidance from medical and scientific experts. “Many of the company’s brands source the majority of their guests from the geographical region in which they operate. In the current environment, the company believes this will benefit it in resuming guest cruise operations,” the company said. But in a business update on Thursday, the corporation said: “Currently, the company is unable to predict when the entire fleet will return to normal operations, and as a result, unable to provide an earnings forecast. “The pause in guest operations continues to have a material negative impact on all aspects of the company’s business, including the company’s liquidity, financial position and results of operations.” The company expects to report an unspecified loss for the financial year ending November 30 but has a total of $8.2 billion of cash and “cash equivalents”. Bookings in the first half of 2021 reflect expectations of phased resumption operations and anticipated itinerary changes. However, cumulative advance bookings for the second half of 2021 capacity currently available for sale are at the “higher-end” of the historical range. “The company believes this demonstrates the long-term potential demand for cruising,” the parent of UK brands P&O Cruises and Cunard said. Pricing on these bookings are lower by “mid-single digits” versus the second half of 2019, reflecting the effect of future cruise credits (FCCs) from previously cancelled cruises being applied. The company continues to take bookings for both 2021 and 2022. About 45% of passengers affected by schedule changes have received enhanced FCCs while 55% have requested refunds. The total customer deposits balance at the end of August was $2.4 billion, the majority of which were FCCs, compared to $2.9 billion at May 31. “The decline in customer deposits is consistent with previous expectations,” Carnival added. Cruise capacity More than half (60%) of bookings taken during the three weeks ended September 20 were new bookings as opposed to FCC re-bookings, despite minimal advertising or marketing. Future capacity is expected to be “moderated” by the phased re-entry of ships, the removal of older capacity and delays in new ship deliveries. The company has accelerated the trimming of capacity since the pause in operations with the disposal of 18 ships, ten of which have already left the fleet. The 18 less efficient ships represent 12% of pre-pause capacity and only 3% of last year’s operating income. The corporation expects to receive only two of the four ships originally due for delivery this year, including Enchanted Princess which was handed over last week. The company expects only five of the nine ships originally set for delivery by the end of 2021 to be received by then. Nine cruise ships and two smaller expedition vessels of the 13 originally scheduled for delivery before the end of the 2022 financial year are expected to be delivered by then. “Based on the actions taken to date and the scheduled new-build deliveries through 2022, the company’s fleet will be more efficient with a roughly 13% larger average berth size per ship and an average age of 12 years in 2022 versus 13 years, in each case as compared to 2019,” Carnival said. President and chief executive Arnold Donald said: “We have come full circle from initiating a suspension in the early days of the pandemic, to transitioning the fleet into a pause status, right-sizing our organisation and, now, embarking on the phased resumption of guest operations, underway in two of our world-leading cruise brands, Costa in Italy and Aida in Germany. “We have accelerated the sale of less efficient ships, enabling us to capitalise on pent up demand on reduced capacity and structurally lower our cost base, while retaining our most cash-generating assets. “We are taking aggressive actions managing the balance sheet and reducing capacity to position us to weather this disruption and also emerge a leaner, more efficient company, reinforcing our industry-leading position.”
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