A Cruise Lines Comeback as Consumers Return to the Seas
Like other travel and tourism segments, the cruise industry was waylaid last year as pandemic-related mandates forced ships to remain docked for upwards of 18 months. The impact was severe. The Cruise Lines International Association (CLIA), the world’s largest cruise industry trade association, estimates the suspension of cruise operations resulted in a loss of more than 518,000 jobs and $77 billion in global economic activity between mid-March and September 2020 alone.
This year, things are looking considerably brighter, with most cruise lines resuming operations in phases – albeit with a host of new safety protocols. Cruise Industry News expects that 206 vessels will be sailing the seas by October out of the 410 cruise vessels available. These ships in operation represent an 8% jump in capacity over September 2021 and a nearly 760% increase from the 24 vessels operating during the same period of 2020.
With these cruise lines returning to operation, let’s take a look at a few of the publicly traded players.
When the Princess Cruises line resumed sailing from the Port of Los Angeles on September 25th, it was the first cruise vacation departure from San Pedro since the cruise industry’s pause in operations early last year. A Carnival Corporation & plc (Tii:CCL) brand, the departure marked the first of 11 sailings from the Port of Los Angeles this year. It’s also welcome news for Carnival, which had halted operations for over 16 months. The cruise line ended the third quarter of 2021 with $7.8 billion of liquidity, which the company believes is sufficient to return to full cruise operations. Carnival, which expects to restart more than 50% of its fleet capacity by October 2021, anticipates returning to full capacity by the following spring.
Royal Caribbean Cruises Ltd. (Tii:RCL), the owner/operator of three global cruise vacation brands: Royal Caribbean International, Celebrity Cruises, and Silversea, has added to its cruise offerings in a big way – the world’s largest cruise ship. The company recently announced the Wonder of the Seas, which will debut on March 4, 2022, setting sail from its home in Fort Lauderdale to the Caribbean and making its way to Barcelona and Rome to kick off summer vacations in May. In early September, Royal Caribbean’s Celebrity Cruises luxury brand kicked off “Journey Safe, Journey Wonderfull,” a multi-million-dollar global advertising effort to entice cruisers back aboard. Royal Caribbean was operating 29 ships across its five brands, representing 42% of capacity, as of August 2021.
Disney Cruise Line’s five-ship fleet remained docked from March 2020 to July 2021. While this resulted in a significant impact for The Walt Disney Company (Tii:DIS), particularly when combined with lost revenue from its shuttered theme parks, the cruise line is slowly returning to operation. The last Disney ship to return to sailing from the U.S., Disney Magic, will embark on its first North American voyage since the pandemic on October 28, 2021, from Miami. Disney’s fleet is about to get larger, having introduced its newest ship, The Disney Wish. Set to launch on June 9, 2022, the Disney Wish features dining experiences based on Star Wars and Marvel superheroes and live shows featuring characters from the Frozen and Aladdin films and other Disney properties.
With a fleet of 28 ships that sail under three brands – The Regent Experience, its namesake Norwegian Cruise Line, and Oceania Cruises – Norwegian Cruise Line Holdings (Tii:NCLH) is a major player in the industry that carried 2.7 million guests in 2019. Though 2020 was an understandably brutal year from a financial standpoint, with revenue plummeting 80.2%, Regent Experience and Oceania brands have tallied multiple record-breaking single-day bookings in recent weeks. Also on the positive front, Norwegian Cruise Line resumed sailing from New York City on September 26 with Norwegian Breakaway’s first week-long voyage to Bermuda. The Norwegian Breakaway is the sixth of the cruise line’s 17-ship fleet to redeploy since July 25, 2021.
While it’s too early to signal a full recovery for the cruise industry, more ships welcoming passengers, continued consumer demand, and vaccine rollouts are three positive signs for smoother sailing ahead.