A LETTER FROM STEVE
As the first quarter comes to an end we are finally seeing progress regarding getting a handle on the Pandemic. The vaccines seem to be working better than anticipated, a new miracle pill being developed in the US seems to be in the works, and on Friday March 6th a record 2.9 million people will have received the shot in the US. Airline bookings are trending up at a greater rate and Caribbean Resort bookings are on their way to record numbers. It also seems the EU is getting their act together and getting shots in arms at a faster rate.
So what about the cruise industry? Of course as an organization only selling cruises we follow this night and day 24/7. For those that don’t follow this sector closely; in the USA we are waiting for the guidelines to allow the cruise lines to restart cruising which should be coming shortly, the EU already has guidelines in place and limited cruising began in Nov of 2020, and limited cruising is taking place in various regions in Asia. The CDC is making it very difficult for the cruise lines to restart by not offering any direction. To get a cruise ship that has been laid up for a year, back into service, at this stage takes 60 to 90 days. We are hoping for limited cruising for more ships to start in June 2021.
One of the biggest blows to the industry actually came from Canada closing all of their cruise ports on both the East and West coast which is disastrous to Alaska in particular as well typical New England and Great Lake cruising areas. At this writing Congress, CLIA and ASTA are pleading with Canada to allow technical stops (stamping paper work without passengers getting off the ship) to allow cruises in Alaska in particular. An easier solution is to suspend the Jones Act (which requires foreign ships to visit a foreign port during a cruise) however as it is a union issue it’s doubtful, under the current administration, if this will happen.
In the meantime the cruise industry has taken many steps to improve safety and hygiene on board their vessels. New cleaning procedures, which already exceeded hotel and resorts. New air filtration systems similar to and exceeding airlines. Expanded medical, quarantine facilities, staff and on board testing capabilities. While passengers in most cases will require Negative testing to enter most countries and board flights, you will also need one to embark on any ship. Making vaccinations mandatory is currently being required by several smaller cruise lines, but is not the case with any major cruise line at the moment. This is primarily due to many legal, religious and moral issues, and the same applies to having a health passport.
Needless to say the vaccine is a game changer and the situation today for many aspects of the cruise, hotel, airline and hospitality industries is fluid and changing in the right direction. Actual onboard procedures before and during a cruise are changing daily and it is far too early to be predicting the end results at this stage.
March 14, 2020 saw the suspension of all cruising globally after the declaration on March 12 that we do in fact have a worldwide pandemic on our hands. Today many of us can’t wait to travel again and to almost anywhere. This seems to be more so in the cruise industry than with hotel and resorts, with millions of very loyal cruisers ready and waiting to go anywhere it seems. The current prediction for the number of cruise passengers for 2022 is 31.7 million, compared to 27.8 million guests who sailed in 2019.
What do these numbers mean to us? Let’s start by pointing out about 55% of the passengers booked for 2020 and thus far booked for 2021 have decided to take a future cruise credit versus a refund. In Worldwide’s case we had only 1 small group cancel all others have moved to 2021 or 2022, and as 2021 keeps moving along many of those 2021 cruises are now moving to 2022. The HONEST reality is 2022 is filling up at an unprecedented rate. Charter space is very limited today particularly on the small vessels and the 5 Star fleet.
With the space filling up at these rates and demand now really pushing supply, the prices logically will have to go up. Prior to the incredible booking surge the cruise lines had already determined not to lower pricing (they found over the years it takes too long to get them back up) but to give the consumers more value added like free drinks, dinners, tours etc. But now the cruise lines all have new partners from having to borrow billions of dollars to stay afloat. Guess what, these new partners see the supply and demand numbers and they will start asking for a higher return/higher prices. “Wall Street is not happy,” said one source familiar with the situation. “If cruises are flying off the shelves, the message from big investors has been to raise prices if inventory is selling too quickly … the companies are leaving too much money on the table.” This quote came from Cruise Industry news today.
One last very interesting point is cruises that are selling the most today are;
Age group 55+, smaller under 1000 passenger luxury ships and longer itineraries. One around the world cruise sold out in 1 day.
At this time I would suggest you keep all of this in mind when you are talking with your clients or internally about future plans. If you are looking for options in 2022 you need to get serious in the very near future.
Below is some very interesting news that has taken place recently with in the industry.
We look forward to hearing from you and providing the same great advice and service as we have done for the last 31 years.