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Cruising Industry Set to Evolve as Figures Show Demand in 2020

Chris Gomez

Experts say there continues to be demand for cruise holidays, with some of the major liners intending to set sail by August 2020. Fewer ships sailing, capacity reduced by 30-50% for social distancing, on-board testing and a new buffet experience are some of the measures to be implemented to ensure a safe voyage.

Demand for cruise holidays has been on the rise for many years; the ability to sail anywhere in the world while enjoying all the comforts, luxuries and great food that cruise ships offer makes cruising the ideal holiday.

In terms of the economic benefits for ports of call, cruise ships make a huge impact to local economies across the globe.

Gibraltar is no exception, and from the 1930s, at least, cruise ship calls have provided business for shops, restaurants, taxis tours, coach companies and filled government coffers with entry fees to the Upper Rock Nature Reserve.

Cruise Ship in Gibraltar Port 2019 | ©Fran Montes

2018 saw 254 cruise ships stopping at Gibraltar, carrying a total of 406,998 passengers who, in turn, brought in £16.7 million into the local economy; with an estimated spend of £41.03 per passenger.

Malaga ranks 5th in the whole of Spain for cruise ships, and in 2018 it welcomed in 506,000 passengers.

But COVID19 has presented a difficult challenge for the cruising industry, at least in the short term; with cruise ships currently continuing to sail from port to port for maintenance and bunkers, but without any passengers and a limited crew . All while making substantial losses.

Every day, two or three of these giants of the seas sail silently into the Gibraltar Port, empty; when not long ago they would each disgorge several thousand passengers into the Main Street and the Nature Reserve.

Thousands of- Tourists Main Street Gibraltar Tourism
A Packed Main Street Gibraltar 2019 | ©Fran Montes

Royal Caribbean has estimated losses from $250 million to $275 million each month that their fleet are out of action.

Norwegian Cruise Liners also revealed their loss for the first quarter of 2020 amidst the COVID pandemic; a whopping $1.9 billion. This is huge compared with their loss in the first quarter of 2019 which was $118.2 million.

However, CEO of Norwegian Cruise Liners Frank Del Rio, is confident that the company is “well positioned” to cope with an extended suspension of sailing, as he revealed that there continues to be a demand for cruise vacations:

Cruising Post COVID19 Gibraltar

“Our guests continue to demonstrate their desire for cruise vacations, and we continue to experience demand for voyages further in the future across our three brands.”

Indeed, Royal Caribbean’s Chief Financial Officer Jason Liberty revealed to the Motley Fool that 55% of their customers have opted for the “Future Cruise Credit” (FCC) scheme, which provides credit up to 125% on their next voyage with the company, instead of requesting a refund.

He revealed that 20% of those requesting the FCC credit have already rebooked on a future cruise with similar itineraries – many have used their 125% credit to upgrade to a bigger state room.

Not only this, but the forecasted dates for cruises to resume are also a very promising sign for the industry.

Royal Caribbean, Explorer of the Seas | Photo: Matthew Barra

Although an end-date for the suspension of cruises is not yet known, Costa and Celebrity cruises are aiming to resume operations at the end of June this year; with Royal Caribbean and Norwegian Cruise Lines aiming for the 1st of August 2020 (except China sailings), and Virgin Voyages for mid-October.

CEO of Royal Caribbean Says Cruising will Change and Survive & Reveals What Cruise Holidays Might Look Like

During the interview with Barron’s Magazine, the CEO of Royal Caribbean, Richard Fain, stated that a combination of social distancing, testing, therapeutics, and personal protective equipment will be the “new norm” for the industry should the COVID19 pandemic continue.

We will see fewer ships sailing at limited capacity to begin with; it has been suggested that ships will begin operating at around 30-40% capacity and see a gradual increase.

Large Empty Cruise Ship Enters Gibraltar Port 24/05/2020 | Photo: Susan Gomez

He also stated that the larger ships will be much better suited to facilitate social distancing due to the extra space.

The largest cruise ship in the world, the Symphony of the Seas, for example, has a maximum guest capacity of 6,680 plus a crew of 2,200.

At reduced capacity of 30% for example, this would mean 2,004 passengers could be on board at any given time, and throughout a ship that spans 72.54 meters high and 362.1 meters wide with 23 restaurants, this seems a promising short-term solution.

The End or an Evolution of the Beloved Buffets?

Cruise Ship Buffet Post-Covid19

We could see an end to the much beloved buffets within the hospitality industry, but not in Royal Caribbean at least, for now – what we will see is an evolution of the buffet procedure.

Richard Fain said: “(Where) everybody reaches in and everybody touches the same tongs, you’re not going to see (that) on land or sea, but it doesn’t mean that you don’t have a buffet. You might have it where all of the food is served to you by other people. And there are other possibilities. But the point is that it will evolve.”

This is welcomed news for holiday-goers where the all-inclusive buffet is one of the highlights.

Containing Outbreaks: An Industry-Wide Issue for Cruises

The cruise ship industry has been fighting a battle against the spread and / or outbreak of germs, particularly respiratory conditions such as the flu, for many years.

The Centre for Disease Control provides some reasons as to why this is the case:

“Travelers from diverse regions brought together in the often crowded, semi-enclosed environments onboard ships can facilitate the spread of person-to-person, foodborne, or waterborne diseases.”

Anyone who has been on a cruise is familiar with the term “washy washy, happy happy”, a mantra repeated throughout your holiday by smiling staff members holding bottles of hand sanitizers as you reembark the ship after a day of sightseeing.

At reduced capacity, more hand sanitizing and now with the possibility of more testing, tracking, social distancing and quarantine bays – it would seem that the COVID19 pandemic may act as a catalyst in solving, or at least lessening, an industry-wide problem.

In Gibraltar and other nearby Ports, all eyes are on the authorities to see what their reaction will be.

Tourism is an important source of livelihood for many people who are now looking forward to the future with uncertainty and are still reeling with disbelief that the hustle and bustle that Gibraltar used to take for granted until a few months ago (although it seems like an eternity) is going to be replaced by an as yet completely obscure “new normal”.

What do you think?