Tag Archives: Wuhan

One Year Without Cruise Passengers? It Just Happened

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On Jan. 25, 2020, the cruise industry saw the start of the events that left the industry with damages it’s still recovering from. Cruise lines started cancelling their sailings due to the outbreak of the coronavirus in Wuhan and around China.

Citing urgent guidelines from the Chinese government to combat the spread of the coronavirus, Costa Crociere, MSC, Royal Caribbean and Genting Cruise Lines all suspended their cruise operations in mainland China on Jan. 25, 2020.

Ships marking a year without passengers:

  • Astro Ocean’s Piano Land.
  • MSC’s Splendida.
  • Genting’s SuperStar Gemini.
  • Costa’s Serena, Atlantica and Venezia, plus the neoRomantica which has since been sold to Celestyal.
  • Royal Caribbean’s Spectrum of the Seas.

February continued as cruise lines first banned or put in restrictions for passengers from specific countries.

Then countries in Asia started to shut down to tourism and cruise lines issued non-stop itinerary changes for immediate and future sailings, and slowly relaxed booking and refund policies.

Even more, cruises were cancelled in Asia on Feb. 15, 2020, following the outbreak onboard the Diamond Princess in Japan,

Princess Cruises later reacted to the growing spread of the coronavirus in Asia and worldwide by pausing all of its ship operations for 60 days from March 12, 2020. On the same day, Celestyal Cruises also announced it was suspending operations.

AmaWaterways and Avalon Waterways (as well as its sister brands Globus, Cosmos and Monograms) said they were taking a voluntary pause in operations, too.

On March 13, 2020, the Canadian government announced it would be deterring the start of its cruise season (normally in April) to at least July. The ban was then extended twice, the last time until February 2021, which will make Canada cruise less for nearly a whole year.

Also on March 13, 2020, Windstar Cruises stated it would be suspending its sailings through April 30, 2020.

On March 14, 2020, CDC issued a No Sail Order and Suspension of Further Embarkation for cruise ships in waters subject to U.S. jurisdiction; the No Sail Order was extended on April 9, 2020, July 16, 2020, and Sept. 30, 2020, as cruise lines continued announcing more and more cancelled cruises affected by the order.

July 2020 saw the start of the long-awaited cruise resumptions in Europe with TUI Cruises starting on July 24, MSC on Aug. 16 onboard the Grandiosa and on Oct. 20 onboard the Magnifica, Costa Crociere on Sept. 6, and AIDA Cruises on Oct. 17. Mystic Cruises restarted sailing in early September under its Nicko brand. And in Asia, Dream Cruises’ World Dream has been operating short cruises to nowhere since Nov. 6.

Sadly, the pandemic claimed the lives of the following brands: Pullmantur Cruceros, Cruise & Maritime Voyages, FTI, Blount Small Ship Adventures, and Jalesh Cruises, while a record-high 13 ships were reduced to scrapping in 2020.

However, new brands – such as Swan Hellenic and Tradewind Voyages – were born in 2020, too.

And while safe returns demonstrated by TUI, MSC and other cruise lines give hope already, cruise lovers around the world are still patiently waiting for other brands to join. And, with the No Sail Order being replaced with the Conditional Framework in late 2020, it looks like these times may be just around the corner.

Can cruising go from Covid scapegoat to pandemic hero?

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Coronavirus: Foreign Office tells Britons to stay on cruise ship ...
Diamond Princess in Japan

In terms of economic and reputational damage, travel was the first industrial sector to fall victim to the coronavirus and is expected to be the last to recover.

And among travel products, none has taken a harder reputational hit than cruising.

But recently, a path to reputation restoration has opened, and with it the possibility that cruising may even be credited with funding advances related to epidemiology.

Crises of the magnitude of Covid-19 spur a binary result for enterprises: innovation or collapse. And the high degree of risk posed to cruise lines is measurable, reflected in the cost of the loans and investments they arranged to ensure midterm liquidity.

But signs have emerged that cruising will not only survive but even offer a case study of exemplary crisis management. Such a narrative might go like this:

When the initial reports of the virus came out of Wuhan, China, they were frightening but distant, clouded by medical unknowns and shrouded by official silence and secrecy.

A clearer, though far from complete account emerged from the disease’s devastating impact on a cruise ship quarantined dockside in Japan. For more than two weeks, the attention of the world focused on a microcosm of an emerging pandemic. The setting — the Diamond Princess — became a metaphor for contagion and fear. Every new and morbid development was broadcast worldwide.

How does a product that has never been universally embraced — it has devoted followers, but still struggles against outdated stereotypes and a persistent chorus of critics — overcome the stinging characterization of being a “petri dish” of infection?

Even within the travel ecosystem, cruising’s situation seemed particularly dire. Aviation and hospitality had been struck devastating blows; individual brands are still endangered. But because these sectors never stopped operating, enhanced protocols for sanitation were formulated and deployed quickly.

Compared with cruising, these are relatively simple operations. Airline passengers occupy just a few cubic feet of space over a brief period of time. Service is minimal.

Hotels are more complex, but they don’t move around and are typically surrounded by a community of supportive services.

A portion of cruising mirrors hotel operations, and like aircraft, ships move through multiple regulatory jurisdictions. But cruise companies also run shore excursions, manage private islands and maintain myriad public spaces, restaurants and recreational opportunities. They house staffs as well as guests. Maritime engineering and architecture bring additional challenges. And ships must be self-contained, often isolated from support for days.

It’s the sheer number of issues cruising must address that may ultimately give it its halo. Travel Weekly news editor/acting cruise editor Johanna Jainchill and I interviewed former secretary of Health and Human Services (and three-time Utah governor) Mike Leavitt, former Food and Drug Administration commissioner Dr. Scott Gottlieb, Royal Caribbean Cruises Ltd. chairman Richard Fain and Norwegian Cruise Line Holdings CEO Frank Del Rio last week on a Zoom call to discuss a panel they assembled to develop health and sanitation protocols.

The panel comprises working groups. One, for example, will recommend how to operate a safe shore excursion, breaking it down to components in order to minimize the possibility of introducing the virus from a port onto a ship.

Fain and Del Rio expressed willingness to share what they discover with other cruise lines, and Gottlieb noted that, because the challenges of cruising are diverse, the work done by the panel may have applications in other industries.

If so, the petri dish metaphor could be replaced by the image of a ship as a bubble of protection, an environment, as Gottlieb put it, of “exquisite control” that poses less threat than a land vacation.

Should this vision be realized, the extended No Sail Order may ultimately be viewed as an unintended blessing. The lines not only have the time to get it right but to emerge from the crisis as innovators and responsible corporate citizens.

It’s not a far-fetched outcome. There’s a parallel in the oft-cited challenge Tylenol faced in 1982 when cyanide was put, seemingly randomly, into bottles of the pain reliever on shelves of Chicago-area stores. Seven people died, and the brand became associated with fear and death.

At a cost of $100 million, the company recalled and destroyed all existing bottles of the drug and developed the multilayered, tamper-proof seals that have become standard for the industry. But more than that, manufacturer Johnson & Johnson was credited with putting values over profit. Confidence in Tylenol was restored and, as importantly, trust in the entire company was enhanced.

As noted above, cruising is a complex product. There are still hurdles to overcome, and the recruitment of big names for a blue-ribbon panel is not enough to ensure success. But after speaking with Del Rio, Fain, Gottlieb and Leavitt, I’m encouraged that if they follow through on their commitments for passenger safety, the industry will not only recover but may receive due credit in the annals of health and crisis management.

Coronavirus already impacting travel beyond China air routes

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Coronavirus already impacting travel beyond China air routes
Photo Credit: Rangizz/Shutterstock

The travel industry is bracing for a potentially serious downturn of unknown length as the coronavirus continues to spread, forcing cancellations of flights, tours and cruises in China and threatening to create a global tourism slowdown.

While most industry players said it was too early to predict the ultimate impact, investment analysts said the growing number of travel warnings and bans related to the virus, combined with election-year politics in the U.S. and geopolitical tensions, were worrisome in terms of the financial health of the industry in 2020.

“The tourism industry is already facing a number of headwinds, including ongoing uncertainty over the terms of the U.K.’s upcoming Brexit withdrawal and intensifying geopolitical tensions between a number of powerful nations,” said Ben Cordwell, travel and tourism analyst at the U.K. data and analytics company GlobalData. “These factors, combined with the coronavirus outbreak, could mean a tough year lies ahead for the international tourism industry.”

While some outbound tours and China-based cruises were cancelled, U.S. tour operators were mostly taking a wait-and-see approach, noting that this is the off-season for travel to China; group travel and cruises typically pick up in March.

Airlines felt the immediate brunt, with British Airways becoming the first carrier to halt all travel to China and others following suit.

Austin Horowitz, a senior aviation management consultant for ICF, said that even in a best-case scenario, demand for air travel to China would take a severe hit in the near term.

“The duration of how long this goes on until it is contained will have a significant impact on how fast the recovery is,” Horowitz said of travel demand.

A recent IATA analysis showed that pandemic outbreaks can have a major impact on air service demand but that demand also recovers quickly. The World Health Organization has not classified coronavirus as a pandemic, but it is likely to do so.

During the most significant pandemic of this century, the 2003 SARS outbreak in southern China that killed nearly 800 people and afflicted more than 8,000, Asia-Pacific airlines saw the number of monthly miles travelled by passengers bottom out at 35% below pre-pandemic levels.

Over the course of 2003, revenue miles flown were down 8%, causing $6 billion in lost revenue. However, monthly passenger numbers at Asia-Pacific carriers had returned to pre-SARS levels within seven months of the start of the crisis.

Other pandemics, such as the 2015 MERS flu outbreak in South Korea, had a shorter-lived effect. The first month of the outbreak brought a 12% decline in travel to and from South Korea, IATA said. However, volume began to recover after just two months.

“While there are risks that this outbreak could cause a sizeable disruption, history indicates that any effect on air transport would be temporary,” IATA said in a statement.

Cordwell, too, said that while it was hard to predict best- and worst-case scenarios, “I do think the market is quite resilient. People are not going to stop travelling. … I do think the industry will definitely bounce back.”

Travel advisors, meanwhile, were scrambling to deal with the uncertainty.

“It has been a horrible experience with travel plans,” said Craig Hsu, vice president of Travel Design USA, which specializes in travel to Asia. “The mood of our travellers [is] very concerned and worried. We have cancelled multiple trips, including a large group that was supposed to travel to Wuhan in March. Luckily, the airlines and cruise lines worked with us for a full refund to our clients.”

Although acknowledging that his advisors were inundated with calls, he said the impact had been much greater in 2003. But he also pointed out that U.S. consumer demand for travel to China was much higher back then.

“SARS was huge,” he said. “People were more interested in travelling to China during that time versus now,” a shift that he attributed to trade and political tensions between the U.S. and China.

Agents said they also were starting to see apprehension about travel beyond China.

For example, Joan Novack, an independent advisor with a Travel Edge affiliate in New York, said she has two clients, women in their mid-80s, travelling to Southeast Asia with Abercrombie & Kent starting Feb. 24. One of the clients still wants to take the trip, she said, but the other is reluctant after hearing news reports about the spread of coronavirus.

ASTA advised agents against making any recommendations to clients about whether or not to travel to affected areas, instead of encouraging them to direct clients to the Centers for Disease Control and Prevention for the most up-to-date recommendations related to coronavirus.

“Ultimately, it is the traveller who must make that decision, ideally doing so in an informed manner and in light of his or her own individual risk tolerance,” ASTA said in a statement.

Cruise lines with China-based ships last week began cancelling departures through early February. And some lines implemented stricter preboarding health screenings. Likewise, as of last week, more than 20 U.S. airports were screening passengers arriving from China.

As far as the long-term impact of coronavirus on cruise lines, UBS financial analyst Robin Farley said that Royal Caribbean Cruises Ltd. (RCCL) is the most exposed to the China market, where it has about 6% of its deployments in 2020, followed by Carnival Corp. with 5% and Norwegian Cruise Line Holdings with less than 1%. She said that while Chinese passengers are growing rapidly as a source in other parts of the world as well, “Chinese passenger travel to other markets may not be as impacted by these concerns.”

Farley also said that early checks had indicated that the coronavirus had not impacted North American cruise bookings.

“Concerns about viruses tend to be regional to the occurrence, and it is still early to know what regions may ultimately be impacted,” Farley wrote in an investors note.

The outbreak was top of mind at the Americas Lodging Investment Summit in Los Angeles last week, as hoteliers braced for a significant drop in one of their biggest growth markets as well as the potential fallout from a decline in outbound travel from China.

STR president Amanda Hite said, “I do expect there to be a pretty big demand drop [for hotels] in China. When I look at the initial impact on the U.S., there will be some key markets that feel it, especially in gateway cities that depend on Chinese travellers, like New York, Los Angeles. Those are markets where if this is a prolonged issue, that could be very impactful.”

Hite said a look back at the impact from SARS, which began around February of 2003, showed the peak drop in room demand for China came a few months later.

“We saw room demand drop 50% in April, 75% in May and then another 50% drop in room demand in June,” she said. “And then it started to pick back up.”
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Jamie Biesiada, Johanna Jainchill, Christina Jelski and Robert Silk contributed to this report.