Financially-struggling cruise lines are offering up freebies, relaxing cancellation policies.
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Despite a no-sail order effective through July 24 issued by the Centers for Disease Control and Prevention (CDC), the three largest cruise lines — Carnival, Norwegian and Royal Caribbean — have each announced plans to return to the high seas this summer.
Carnival announced plans to set sail on August 1. However, Norwegian said it plans to return July 1, and Royal Caribbean even earlier on June 12 — before the no sail order expires. Even Richard Branson’s new venture, Virgin Voyages, is making its own rules, planning its inaugural cruise on July 15 for Branson’s 70th birthday.
On Tuesday, Carnival posted a cryptic tweet about its reopening date, saying, “Any resumption of cruise operations — whenever that may be — is fully dependent on our continued efforts in cooperation with federal, state, local and international government officials.”
But whether compliant with federal regulations or not, the fact that cruise lines are gearing up with no published policies on how they plan to keep ships sanitized or deal with social distancing protocol is concerning to some.
“I was super surprised to hear them coming out with sailing dates so early, but on the financial side, they have to,” said Peter Ricci, Director of Hospitality & Tourism Management Programs at Florida Atlantic University. “They can do a number of things to get back in operation where people would feel comfortable, but I wouldn’t book until I saw that.”
As businesses begin to reopen from the economically devastating coronavirus economic shutdown, cruise lines face a particularly unstable future. Will the cruising public, fearful of falling ill or losing their deposits, sail again in numbers high enough for the companies to remain solvent?
In an effort to stave off financial ruin, Royal Caribbean in April laid off or furloughed 26% of its workers. Norwegian cut salaries and furloughed workers before reporting on May 5 the company was drowning in $6 billion of corporate debt, according to documents filed with the Securities and Exchange Commission. The following day, Norwegian reported raising $2.2 billion — enough to keep its ships afloat for another year.
Carnival Cruises, a Panamanian line that reported hemorrhaging $1 billion a month during the early days of coronavirus shutdown, recently raised $6 billion in bonds and equity courtesy of a controversial move by the Federal Reserve to free up dollars for banks to reinvest in struggling companies.
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Ricci said cruise lines have spent years “manufacturing their own demand” and have the highest repeat guest satisfaction of any segment of the competitive hospitality industry.
They are big business, contributing $53 billion annual to the U.S. Economy and supporting ancillary industries such as hotels, airlines, restaurants and onboard retailers, Cruise Lines International Association reports. In 2019, 30 million people went on cruises, nearly doubling the 17.8 million that cruised a decade before.
But that success is based on a major factor that just happens to be the primary issue health experts concerned about the spread of coronavirus warn about most, Ricci said.
“Their entire model is based on social activity,” he said. “From the large lobbies to the dining facilities, bars, nightclubs and casinos.”
Many cruise lines have published social media posts or videos reiterating their commitment to maintaining safe, clean environments, particularly since the CDC on March 17 issued a travel advisory stating, in part, that “cruise passengers are at increased risk of person-to-person spread of infectious diseases.” But they have yet to announce policies specifically related to how they plan to deal with the threat of coronavirus.
They were heading in that direction, however. In a roundtable discussion hosted by Vice president Mike Pence on March 7 in Fort Lauderdale, CLIA and cruise line officials vowed to develop a host of protocols to prevent COVID-19 infections.
Those standards were to have included pre-boarding screening of passengers, more onboard monitoring and a plan for removing passengers who became ill while at sea. Days later, after the global pandemic was declared, the cruise lines said they would stop sailing altogether.
Ricci points out that while a person can walk out of a theme park or around someone on the street, they can’t get away from close contact with others on a ship, making sailing of particular concern to those worried about the communicability of coronavirus.
“I’d rather not get anywhere near a cruise ship right now,” said Jacqueline Cobb, a Pembroke Pines attorney who forfeited a $500 deposit for a Feb. 23 Royal Caribbean cruise out of Miami.
The cruise would have been Cobb’s fourth, and she was looking forward to others in the future. But no more.
“It’s Russian roulette,” she said. “It’s a gamble. I don’t want to take the risk of getting COVID-19. There’s so many unknown factors at this point, despite what they say they will do to mitigate the risks.”
Like Cobb, even the most ardent of seafarers cannot erase images of sick and dead passengers being taken off ships that became stranded at sea after the onset of coronavirus.
Well aware of the generalized fear of contracting coronavirus and the bad press surrounding COVID-19-ravaged ships stuck at sea, cruise lines are attempting to lure customers back with promises of free drinks, free food, free shore excursions.
Even unfavorable cancellation policies that often ended with cruisers like Cobb saying “bon voyage” to their deposits have been modified to previously unheard of terms.
“I have sometimes sat through it with a barf bag present, because it is so terribly one sided,” said maritime attorney Gerald McGill of cruise cancellation policies. “It’s a perfect contract — all exclusions and disclaimers.
If you book a cruise on Royal Caribbean before Aug. 1 with a departure date on or before Sept. 1, you will receive a future cruise credit if you cancel as late as 48 hours prior to sailing. For cruises departing after Sept. 1, you will need to cancel 75 to 90 days in advance, depending upon the cruise, to avoid a cancellation charge.
Cancel 48 hours in advance of cruises scheduled before Sept. 30 on Norewegian and you will receive 100% credit toward a future cruise. But if your cruise was scheduled for October 1 or after, expect to forfeit a portion of your deposit if you don’t cancel at least four months in advance.
Carnival announced that cruises canceled after March 6 will offer a refund or credit for a future cruise with additional on-board credit, according to the company’s website. But there’s a catch — if a traveler chooses to forgo a cruise of their own volition, much stricter cancellation policies apply.
Bought tickets to meet the billionaire himself on Branson’s adults-only Virgin Voyages inaugural cruise? You’re stuck — at least according to the company’s website. Cancel less than 121 days before any cruise and you can kiss your deposit goodbye.
The good news is the company offers a 100% credit toward a future cruise, and Virgin, in particular, has been extremely engaged on social media with cruisers worried about their deposits — sometimes offering as much as 200% credit on future trips.