Who hasn’t dreamed of that fantastic cruise to far off seas and wondrous ports? The cruise vacation has always stood for dreamy experiences in paradise, adventure at sea, and everything that humdrum life is just NOT about. But such dreams have now returned to the realm of fantasy since a coronavirus pandemic set the world on its end. And despite what you may have heard, the cruise industry will probably never come back strong.
I am one of those people who sees an image of a giant ship like the Royal Caribbean’s Oasis Class of ships and then set to wondering. These magnificent vessels sport 16 decks and 20 restaurants, 7 distinct neighborhoods, and more experiences than some countries possess. Seeing their sleek lines, and studying like the sailor I am the engineering marvels the ships possess, I get a glimpse of that childhood wonder I felt sitting on the docs at Charleston harbor, back home in South Carolina, USA.
And then it happens.
I visualize a crowded companionway, or bar, or at the pool, and a potentially deadly virus floats in front of my eyes, obscuring colorful carpets, drowning out the tingly sounds, and snuffing out the smells of the sea salt sucked through my facemask. I cannot help but visualize a kind of virally imposed claustrophobia setting in, like those COVID-19 entrapped cruise passengers in Japan must have felt.
Yes, I had to go hear when I read about Royal Caribbean International President & CEO Michael Bayley speaking about his company’s rebooting of cruises in the wake of COVID-19. While I truly hope Mr. Bayley’s positive efforts do bring back cruising, his proposed short sailings to begin the return to service will not begin to pay the interest on the cruise line debt, much less the fuel and crew to power the line’s behemoth cruise vessels. Bayley smiles in his photos and is quoted with upbeat ideas like this:
“I think when we resume service, our thinking is that will probably we’ll probably start with short product, Perfect Day, and that’ll be the how we’ll start phasing in operations.”
Now let’s wipe the seaspray from our economic binoculars. An Oasis Class ships costs about $1.35 billion (2018 Symphony) to build in the first place. Here’s a very good breakdown on how much Royal Caribbean passengers spend for a cruise, and the breakdown of costs, as well as the profit the cruise line nets at the end.
The bottom line shows that of the $1560 bucks the cruise line gets from every passenger, only about $298 dollars end up being a clear profit. In 2018 this figure brought stockholders $1.815 billion. Unfortunately, the company’s stock is now worth less than half what it was before the pandemic was announced. Demand is not going to skyrocket. Regulations will not allow full cruiseliner capacity. And costs not diluted with optimum operational efficiencies will sink profits even further. At least, this
In addition, new cruises of the type that powered the company in the past, have been put off until October 31st. Additional bad news hit cruise line stocks when new coronavirus cases hit ships put back in service by Royal Caribbean’s competitors. Two European cruise ships and one in the South Pacific have experienced coronavirus outbreaks in the last days.
Finally, all it will take to sink any of the major cruise lines in the future will be one catastrophe involving COVID-19. This Forbes story speaks to this point well. Travel expert Alex Ledsom also discusses how the whole cruise experience will be radically changed, and certainly not for the better. And let’s face it, most people’s seaborne adventure fantasies do not include radical incursions into their “dream space” the way new safety protocols threaten. We may have to succumb to airport security looking at us all like terrorists, but crew and passengers on our luxurious sailing holidays eyeballing us is another matter.
I know my report here seems overly negative. But I reflect these opinions in this way because none of these industry people seem to be living in reality. I will tip my sailor’s cap to the first cruise line CEO who discusses totally refitting a ship to create the perfectly safe and dreamy voyage. Or, even the cruise line boss who admits part of the fleet has to go. In short, anybody snapped out of fantasy seas back onto solid ground.