Skift Take

The cruise industry's operations in Asia are being battered by coronavirus, with Carnival Corp. in a particularly tough spot.

Carnival Corp. issued updated earnings guidance on Wednesday, speculating on the impact of suspending its cruise operations in Asia until the end of April due to the coronavirus, or Covid-19.

It said such measures would affect its 2020 financial performance by $0.55 to $0.65 per share, an estimate which includes what it would have to pay in guest compensation.

The company added: “The impact on global bookings will further affect the company’s financial performance. The company is currently evaluating contingency plans to mitigate the impact and will provide an update with its first quarter 2020 earnings release in late March.”

Meanwhile, the company’s Diamond Princess vessel remains moored off the east coast of Japan, with more than 200 cases on board, and counting. Passengers are being instructed to largely remain in their rooms. However, a Carnival spokesperson told Skift that Princess Cruises has been informed today by Japanese officials that some passengers will be permitted in the coming days to voluntarily disembark and complete their quarantine at a facility on shore. Any individual that screens positive will be taken to a hospital to be isolated and treated. Guests are also permitted to stay on the ship to finish out the 14 day quarantine if they so choose.

The crisis comes at a particularly bad time for the cruise industry, during the so-called “wave season,” a popular booking period during the first three months of the year when cruise lines offer deals and packages to spur bookings. There have been reports that bookings are down as much as 40 percent. Skift reached out to the industry’s trade group, the Cruise Lines International Association, and will update this post if it responds.

At a press conference earlier in the week, World Health Organization officials were asked about the effect of the virus on the industry, specifically the MA Westerdam, a Carnival-owned ship which was denied the right to dock at five ports in violation of International Maritime Organization norms. Cambodia finally agreed to accommodate the vessel on Wednesday; it’s expected to dock today with no suspected cases on board and passengers will be screened.

“There are manageable risks associated with the conveyances and there’s plenty of guidance on how to do this properly,” Mike Ryan, WHO Executive Director for health emergency programmes said. “We need to ensure that there’s neither an overreaction or an underreaction and we need a proper risk management approach to this, as we want to see to all types of gatherings and we’re going to have this more and more in the coming weeks as we see more events and conferences and we see cruise ships.”

Carnival shares are down roughly 14 percent since the beginning of the year. The company told Skift it has now instituted additional health screenings and boarding procedures that will not allow passengers to board if they’ve been to China, Hong-Kong or Macau in the previous 14 days. Previously, this restriction only applied to China.

In addition, Costa Cruises, which is owned by Carnival, has cancelled its itineraries from China through February. A spokesman added that China accounts for 5 percent of the corporation’s global fleet capacity.

UPDATED: This story has been updated with comment from Carnival Corp.



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Tags: carnival corp., coronavirus, cruise, diamond princess, princess cruises, who

Photo credit: The Diamond Princess, a Carnival-owned vessel, in quarantine in Yokohama, Japan, due to the coronavirus outbreak. Jae C. Hong / Associated Press

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