Home MarketsStatisticsArctic Shipping Cruising effects due to Covid – 19 expectations

Cruising effects due to Covid – 19 expectations

by admin

Cruising effects due to Covid – 19 expectations

Theodore Kontes

by Theodore Kontes, President of Union of Cruise Ship Owners & Associated Members

Cruising Worldwide considered the best method of Sea tourism on Planet Ocean covering various interesting destinations, starting from the Caribbean area, Mediterranean, North Europe and Asia, Australia added at a later stage.

Following were the Cruise Industry’s world deployment for 2019 (prior to COVID – 19 period).

Caribbean                         31,5 %          with about     866.000        lower berths

Mediterranean                 21,1 %          with about     581.500        lower berths

Baltic / UK                        11,8 %          with about     323.300        lower berths

Asia                                  10,5 %          with about     277.000        lower berths

Australia                           7,2 %          with about     196.000        lower berths

Alaska                              3,9 %           with about    107.200        lower berths

South America                  3,3 %           with about     88.700        lower berths

Bermuda /New England  5 %              with about     137.000        lower berths

Round the world              5,4 %           with about     146.000        lower berths

Others                               0,3 %           with about     8.800        lower berths

Totals                             100 %            with about  2.731.500     lower berths

The above cruising areas distribution was performed with about 448 cruisers and a total capacity of lower berths at about 735.000.

In addition 115 new vessels were on order to be delivered between 2020 – 2027.

The total guests cruising in 2019 were about 27.9 million worldwide and gave a total gross revenue in the industry in the tune of about €29 billion.

These were the result before COVID – 19 having an annual average increase to a level of 6 % and continue improving the standards of cruises including the mega ship ones with improved type of services on board, performing several prototype activities to all guest, make them fully satisfied in the sea tourism programs at various destinations.

Unfortunately COVID – 19 pandemic gave such a big shock in the cruise industry starting from Asia cases and continued in Europe, USA and worldwide making such a negative impact resulting a total breakdown of the industry.

Vessels were trying to find places to be laid up and disembark passengers as well as to repatriate crew since such laid up was expected to be for long period and while the pandemic was leading to the worst with a lot of deaths and serious problems to hospitalize people with such cases.

Most of the vessels remained idle for more than a year with all related difficulties with crew, accepting them in ports and unbelievable costs been involved covering the operating and financial costs for such valuable units.

Having done the analysis as we do every year, a reduction of about average 90 % in comparison with 2019 was noted.

Always depending on various areas of cruising the results were varied from 82 % up to a 97% reduction.

Worldwide expectations for 2020 resulting as follows:

  • Total revenue reduction in comparison with 2019 (-85%)
  • Total revenues for European ops (-84%)
  • Crew reduction due to Laid up (-68%)
  • European embarking pax (-78%)

Following are also comparison statistics of the industry from 2017 till expected 2025 including of course the disasters of COVID – 19 effects.

.
.

Additional negative results due to COVID – 19 were noted that.

  • Several companies discontinue the future operation totally.
  • Well known big cruise companies decided to recycle (scrap) several older tonnage vessels and in additional sold others in other investors. Total number for recycle (scrap) 24 unit. Total number resold to other investors 32 units for unknown future use.
  • New building orders almost stopped entirely, especially on big size units. Contracts for Newbuildings at a very early stage were canceled and for those in an advance stage, renegotiation to be delivered at a later date is taking place.
  • Shipyards (Europeans) are going through a very difficult time and try to recover business with other projects. On these new ideas are included also the most attractive units the expedition cruisers (luxury vessels) in smaller size and less capacity (usually 250 – 500 pax). These are the units which might have a better future, cruising in special areas (Antarctic etc.) including Greece’s small islands.
  • Cruise companies well known attempts to restart but unfortunately were stopped again soon on the occasion on the 2nd stage of Coronavirus outbreak.
  • So with the start of vaccinations, but also the health measures that are applied there are now hopes for resumption of the sector, of course, always following the health protocols of ships, ports and general conditions of transport etc
  • So hoping that the issue of the pandemic will be brought under control, and companies are planning to restart again, but we noticed that the announcements of companies with specific departures are postponed on future dates with the restart of some companies being in May / June but also others plan for August or even later.
  • The forecast for 2021 of course will be seen to operate with fewer ships and passengers. The overall forecast and in order to restart or satisfactory percentage we expect to be about 20 % in addition to 2020 result thus reducing losses compared to 2019 from 90 % to 70 %. Finally, summarizing the data and the future forecasts of the industry: until the confidence of the passengers is re-gained, we mention once again that in order to reach the result of 2019 numbers, it may take at least 4 more years, pending a complete recovering in about 2025.
  • Considering all the above, there is no doubt that the cruise industry is the most affected one in the maritime sector by the COVID – 19 pandemic. “No sail” orders by the USA Centers of Disease Control (CDC) for USA trading and other authorities worldwide.
  • The shares of publicly – listed cruise lines had lost at least 80 % of their value in a period of a few months.
  • At the present moment it seems that a reasonable time frame for COVID – 19 vaccination plan will take several months to be implemented. We can now consider that there might be light at the end of tunnel and a market recovery in the near future. This as mentioned above takes time and the restart can take place at different timing depending on the pandemic status per specific areas.
  • These are cruise ships for sale at very low prices and several investors have looked into buying such vessels in the hope of an asset and make a quick profit. This is a quite risky exercise for investment out of the cruise market since there is quite considerable access to tonnage available (particular on big size vessels) and we may expect new cruise tonnage may become available in the markets in compliance with new rules and regulations that could apply soon due to environmental and health / hygiene controls and improve expectations.

The Cruise industry has a great future in the present cruising areas as well as to new destinations since, it is considered that cruising is the most interesting method of vacations for those preferring sea tourism. It may be the method of cruise services and size of vessels that will be changed as mentioned above and this is the reason the expedition luxury vessels (small in size 250 – 500 pax) with exceptional services and trading in special destinations are those that are been mostly promoted at the moment with about 38 newbuildings of such type on order.

Hope for the best for the Cruise Industry to recover soonest and restart in a safe way for all destinations.

You may also like

Leave a Comment