Disliked in some quarters for its impact on the environment, the cruise industry suffered a further reputational blow after a number of high-profile cases of people contracting coronavirus on ships and being quarantined in less than desirable conditions. As the operations of cruise companies around the world ground to a halt, lay-up costs were estimated to have reached up to $1bn (€920m) in April alone. So what’s the future for these floating behemoths?
How bad is it right now? Are we talking bankruptcies?
Normally, the more than 400 cruise ships that exist worldwide would be full of happy passengers right now. But the whole industry has been upended and the many companies currently have no revenue. It’s too early to say whether there will be any bankruptcies but remember that these are big firms with lots of resources.
What are the next steps?
It won’t all open up at once and it will depend on the region, as there are lot of different regulations and moving goal posts. On those big ships that normally have thousands of people on board, you’ll see more stringent health screening of passengers and staff, and I would imagine [that the ships] won’t be 100 per cent full to force some physical distancing.
Will this crisis permanently hobble the industry?
In the US, cruise companies are being pushed to submit plans to authorities about what will happen the next time there’s a major incident. The idea is that the industry should be able to take care of itself rather than drain public resources – as we’ve seen with issues around sick people disembarking and so on. But in terms of demand, bookings for 2021 are still being made.
Could this be a time for cruise companies to pause and reconsider their propositions to address other concerns over their impact on the environment and cities?
There’s already a major trend towards [ensuring] environmental sustainability. We’re seeing a surge in small luxury vessels; new ships are moving to liquified natural gas as a fuel; and older ships are retrofitting features such as exhaust gas cleaning, led lights and better onboard waste treatment. Although the impact on cities is a big debate in Europe, there’s been much less pushback elsewhere.
They are a floating economic stimulus; you just can’t deny the positive financial impact of a couple of thousand of people walking off a boat.
Monocle comment: The move towards smaller, greener boats is cheering but passengers should note their effect on cities.
About the interviewee: Mathisen is the longtime managing editor of US-based trade publication Cruise Industry News, which has covered the sector for more than 40 years in print and online.