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Cruise executives say they're in no rush to return to service

Aug. 15, 2020
7 min read
Cruise executives say they're in no rush to return to service
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A handful of cruise lines around the world have resumed limited departures in recent weeks. But don't expect a widespread resumption of cruising anytime soon.

Executives at some of the world's biggest cruise companies in recent days have suggested it could be many months before cruising starts back up in a major way.

"We will not rush to return to service," Royal Caribbean Group chairman and CEO Richard Fain told Wall Street analysts Monday, noting the company still is working through new COVID-era health protocols to implement when cruising resumes.

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Speaking at the start of a conference call to discuss second-quarter earnings, Fain said the company's brands wouldn't restart operations until he and other executives were "confident that we have figured out the changes that we must make to offer our guests and crew strong health and safety protocols with the enjoyable experience that they rightly expect."

Royal Caribbean Group is the parent company of Royal Caribbean, Celebrity Cruises, Azamara and Silversea. It also owns a partial interest in several European cruise brands.

"As with all we do, we want our measures to go above and beyond what's expected of us," Fain said.

Related: The best credit cards for booking cruises

A Royal Caribbean vessel at sea. (Photo courtesy of Royal Caribbean).
Royal Caribbean already has canceled most of its cruises worldwide through the start of November. (Photo courtesy of Royal Caribbean)

Later in the conference call, Fain also suggested the company's brands would restart cruises in a small way at first before ramping up over time. He described the coming restart as being like raising the lights in a room by using a dimmer switch, not a standard switch.

Fain's comments were similar to those made just four days earlier by Norwegian Cruise Line Holdings president and CEO Frank Del Rio.

Speaking with Wall Street analysts, Del Rio forecast a "gradual ramp-up of sailings" that might start in the last two months of 2020 with a very limited number of ships, likely with significantly reduced occupancy levels.

"As we move into the first quarter of 2021, the deployed capacity is expected to ramp up as more vessels gradually reenter the fleet," Del Rio said. "Based on this timeline, it isn't until at least the second quarter of 2021 that we would see our fleet return in earnest."

Related: A growing number of lines are canceling sailings into 2021

Norwegian Cruise Line Holdings is the parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises, all of which have already have canceled sailings through early November.

A slow rollout of cruise ships also is the plan at Carnival Corporation, the world's biggest cruise company. It owns Carnival Cruise Line, Princess Cruises, Holland America, Seabourn and five overseas brands.

"Clearly cruise will not come back all at once," Carnival Corporation CEO Arnold Donald said last month in a conference call with Wall Street analysts. "We intend to resume operations with a small percentage of the fleet."

All the cruise companies still are in the process of developing new health and safety protocols that will allow them to resume sailing. Two of the companies, Norwegian Cruise Line Holdings and Royal Caribbean Group, are doing this together. They've assembled a panel of outside health experts to help them figure out ways to make ships safer in this new era of coronavirus.

The Healthy Sail Panel, as it's being called, is expected to come up with recommendations by the end of August. It's looking at ways to upgrade the screening process for passengers and crew at boarding and enhance onboard health processes. It's also looking into new procedures for when ships are in ports.

Related: New COVID-era restriction: No leaving the ship without an escort

But even with new protocols, cruise lines can't resume sailings in many parts of the world until they get approval from health authorities and officials at the country, state and local level.

The U.S. Centers for Disease Control and Prevention (CDC), which has jurisdiction in U.S. waters, for instance, currently has a "no-sail" order in effect for all but the tiniest cruise ships through Sept. 30. Canada has banned the arrival of most cruise ships through Oct. 31.

Royal Caribbean Group executive Michael Bayley said during Monday's conference call that the company hoped to start a meaningful dialogue with the CDC about returning to service in the U.S. by the end of September.

Still, Bayley -- the CEO of Royal Caribbean Group's Royal Caribbean brand -- cautioned that nothing was certain about how the next few months would unfold.

Related: Did some cruise lines return to service too soon?

"It's important to note that there's ... just a huge amount of uncertainty with how this will play out. And obviously, one of the biggest dynamics is what's occurring with COVID itself," Bayley said.

Indeed, it is likely to be the progression of the illness, and any development of new treatments or a vaccine, that is the biggest determinant as to when the bulk of cruise ships resume sailing, several cruise executives have suggested in recent weeks.

As Bayley pointed out, some cruise ships based in Germany have resumed sailings in recent weeks in the wake of a sharp decline in COVID cases in the country. For now, the vessels are operating "cruises to nowhere" for Germans that don't call at any ports.

"Germany was one of the first countries to ... be flexible in terms of opening up to cruising because it reflected how people were seeing what was occurring with COVID," Bayley said.

So far, the sailings out of Germany -- operated by German lines TUI Cruises and Hapag-Lloyd Cruises, both partially owned by Royal Caribbean Group -- have been going well. But that isn't the case with all the cruises that have restarted around the world. Four vessels in recent weeks have experienced COVID scares, including one that had a major outbreak that landed passengers and crew in the hospital.

Cruise executives have acknowledged that the recent COVID scares have been a setback.

"Look, there's no way to spin the initial reemergence of COVID onboard vessels," Del Rio told Wall Street analysts. "But ... it's an opportunity to learn from them. This virus teaches us something every day."

Calling the COVID scares "disappointing," Del Rio said the good news was that the ports and cruise companies involved handled the situations well.

"We haven't had a repeat of what happened earlier during the pandemic crisis," he said in an apparent reference to the deadly outbreaks on some Princess Cruises and Holland America ships that were front-page news around the world for days.

Additional resources for cruisers during the coronavirus outbreak:

Featured image by Norwegian Getaway in Miami (Photo courtesy of Norwegian Cruise Line)

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