The downturn in the Cruise industry due to Covid-19

The Cruise Industry operates using a business model reliant on a constant high volume of guests booking holidays in advance to fill as many cabins as possible. Once on board the vessel there is a second revenue stream for the Cruise Industry known as on board spend. This is payments made by the guests for additional services not covered by the cruise fare. Retail outlets, the Spa, high end restaurants, bars and shore excursions are examples of these additional revenue streams.

The new norm for cruising, once it resumes post Covid-19 will surely be governed by social distancing and a requirement to have spare cabins available for sick guests. Therefore it goes without saying that there will be a cap on the number of guests per voyage which will reduce the revenue earning capacity of he vessel.

We have yet to see what this will do to the on board prices, but I suspect that prices will increase as a consequence.

Itineraries will reflect the countries that have low infection rates and have political agreements to allow free tourism. This could result in a very different looking itinerary than what we have been used to in the past.

Fly-Cruising will almost certainly be the last sector to start up again due to the difficulties in securing landing rights in the post Covid-19 world and the reluctance of guests to fly to join a vessel. Saying this, the Winter 20/21 Caribbean season for European Cruise Brands must be in doubt.

Only time will tell but in my experience within the Cruise Industry, which is very cautious, at the best of times, I am expecting a very slow return to business.