Skift Take

While cruise companies grapple with another no sail order extension from the U.S., offering up clear communication about heightened health protocols could steer the industry into a better position with regulators.

The U.S. Centers for Disease Control and Prevention’s extended no-sail order on the cruise industry is currently set to lapse at the end of this month.

Holland America Line pushed back its own return to the seas to mid-December, but the cruise company’s president Gus Antorcha anticipates even further setbacks to that plan.

“I think over the next couple of weeks here, as we get greater clarity working with officials with the U.S. government, we’re likely going to have to tweak some of those plans,” Antorcha said this week during the Seatrade Cruise conference.

Leaders at Carnival Cruise Line, Holland America’s sister company, earlier this week similarly pushed back planned sailings to the end of 2020 and warned even those trips could be cancelled.

The CDC extended the no sail order at the end of September and cited 3,689 coronavirus cases and 41 deaths stemmed from cruise ships between the beginning of March and late September in U.S. waters. More than 82 percent of cruise ships in the U.S. were impacted by coronavirus during this time frame.

Holland America is in daily communication with other cruise lines as well as the industry trade group Cruise Lines International Association about returning to the seas.

“As we learn more, we will adjust the deployment and itineraries,” he added.

Holland America has adjusted to a grim, new reality hovering over the cruise industry. Four ships have left the fleet, 2,000 jobs were permanently cut, and massive furloughs took place earlier this year.

“We’re going to be a smaller company, and that affects people’s lives, and those are difficult decisions to make,” Antorcha said. “Ultimately, they’re ones we have to make. That’s been the hardest part of exiting the four vessels.”

He didn’t give a specific number with respect to the furloughs, only calling it a “fair number of employees.”

“I don’t think there’s a company in travel and tourism that hasn’t had to take those difficult steps,” Antorcha added.

A New Way to Cruise

Holland America is committed to the safety of its passengers and crew, Antorcha repeatedly said during the press meeting. However, limited details were provided on how exactly those safety measures would look, especially around the concept of social distancing.

“There’s nothing specific at the moment,” he said. “We’ve all communicated that we’re likely to start with social distancing.”

Holland America is likely to send ships out at less than 100 percent capacity, but the company has yet to settle on a specific cap on capacity. That figure will likely depend on the size and layout of the ship.

Some may question if there would even be enough demand to necessitate a cap on bookings. Holland America has typically held a reputation for being a cruise line for older travelers, and elderly populations are the most vulnerable to coronavirus.

Hotel company IHG released booking data this week showing it saw reservations from travelers over the age of 65 decline during the pandemic. But Holland America isn’t expecting a similar dwindling of interest.

“Some of our older guests have been booking disproportionately to other demographics,” Antorcha said. “You would think, if this has a disproportionate negative effect on older guests, do those guests stop booking? I haven’t seen data suggest that’s a clear implication.”

Part of that may have to do with the fact that Holland America’s trips tend to be longer and more expensive — requiring time and money that many younger travelers don’t have.

“I also think whatever we see is going to be temporary,” Antorcha said. “I think people are desperate to travel. I’m desperate to travel.”

Rebound Possible?

While all travel companies are reeling from the pandemic, many have been able to tap into various federal economic relief programs like the Paycheck Protection Program small business loan or industry-specific relief like the airlines received under the $2 trillion Cares Act.

Even if another coronavirus relief measure looks increasingly unlikely, U.S. President Donald Trump called on congress Tuesday to pass a $25 billion aid package for the airlines.

The cruise industry was shut out from federal assistance after lawmakers noted operators largely register and flag their ships in foreign countries, even if their corporate headquarters are in the U.S. The practice enables the cruise industry to avoid U.S. labor laws on ships and take advantage of tax loopholes.

But the lack of federal stimulus to the industry is unlikely to prevent a cruise comeback.

“I have not seen us make any tradeoffs or any implications that suggest we’re not able to come back in the right way,” Antorcha said.

He indicated Carnival Corp. CEO Arnold Donald and chief financial officer David Bernstein were focused on capital raising initiatives during the cruise hiatus.

Donald earlier in the pandemic sought a federal loan guarantee for the cruise industry in lieu of a financial bailout.

“Obviously, we’re being very financially prudent and watching every penny,” Antorcha said.


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Tags: carnival corp., coronavirus, coronavirus recovery, cruise industry, holland america line

Photo credit: Holland America's leaders are still deliberating how to revive the stalled cruise industry from the pandemic. pcwiles / Wikimedia

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