Nearly 800,000 Travelers Will Be Affected by Cuba Cruise Ban
Several of the world’s biggest cruise lines scrambled on Wednesday to make alternative plans for ships scheduled to visit Cuba in coming days, as they began coming to terms with a new Trump Administration ban on sailings to the island nation.
Norwegian Cruise Line rerouted the Port Canaveral-based, 1,936-passenger Norwegian Sun to Nassau in the Bahamas instead of Havana, Cuba, to comply with the ban, which took effect Wednesday — less than 24 hours after being announced. Cruise giant Carnival said its 2,056-passenger, Miami-based Carnival Sensation would visit Cozumel, Mexico, on Thursday in place of Havana.
Royal Caribbean said two ships scheduled to visit Cuba on Thursday and Friday (the 2,350-passenger Majesty of the Seas and 1,602-passenger Empress of the Seas) would head instead to Costa Maya, Mexico, and the line’s private island in the Bahamas, CocoCay at Perfect Day.
They are just the first of hundreds of sailings on the schedule of more than a dozen lines that will need to be rerouted.
The Cruise Lines International Association (CLIA), the industry’s main trade group, said the new ban on cruise travel to Cuba, which came in the form of new rules issued by the US Treasury Department’s Office of Foreign Asset Control, will affect nearly 800,000 passenger bookings for current and upcoming Cuba sailings.
In a statement, the association noted the ban is affecting sailings that had been previously approved and came “without warning.” Passenger bookings had been made under a general license previously issued by the United States government that authorized “people to people” travel to Cuba. Such people-to-people travel is now prohibited.
“We are disappointed that cruises will no longer be operating to Cuba,” CLIA chairman Adam Goldstein said in a statement. “While out of our control, we are genuinely sorry for all cruise line guests who were looking forward to their previously-booked itineraries to Cuba.”
Goldstein also is vice chairman of Royal Caribbean Cruises Ltd., the parent company of Royal Caribbean, Celebrity Cruises and Azamara Club Cruises, among others.
The Long-Term Impact
Even as they made some quick port substitutions for this week’s Cuba sailings, major lines on Wednesday continued to work on broader updates to their schedules for 2019 and 2020. The process, which involves securing berthing space at alternative ports, is expected to take several days.
Late Wednesday, Royal Caribbean said it had secured space at alternative ports in the Caribbean for all Cuba calls scheduled for the rest of 2019 but was still working on new itineraries for 2020. It’s expected to have the process finished within the next week.
Carnival said it hoped to have information on itinerary changes for all Cuba voyages available for passengers in the next two to three days.
“We are working as quickly as possible to secure alternative itineraries for the remainder of our Cuba voyages,” Carnival said in a statement. “In the meantime, please check back on our website for further updates.”
Norwegian Cruise Line, which has one of the most robust schedules of Cuba sailings, asked for patience from customers Wednesday as it navigated the “unexpected, last-minute change.”
“We have ceased all calls to the country and are modifying previously-scheduled sailings as appropriate,” the line said in an update on its website. “We will of course continue to share information with [customers] as soon as additional details become available.”
For now, cruise lines appear to be operating under the assumption the ban will remain in place for an extended period, a view shared by some outside analysts.
“In our view, the [cruise] industry is being used as a lever to reduce Cuban support for Venezuela,” Wall Street analyst Harry Curtis of Instinet said Wednesday in a research note. “Nobody knows how long the ban will last; but it is likely that these policies stay in place for some time.”
Waived Cancellation Fees
Two of the biggest Cuba cruise operators on Wednesday were quick to waive cancellation penalties for passengers on upcoming Cuba sailings. Both Royal Caribbean and Carnival said customers booked on cruises that feature a Cuba call could cancel for a full refund. Royal Caribbean said customers who go ahead with the sailings will receive a 50% refund, while Carnival offered a $100 per person onboard credit to those who stick with the trips. Carnival also is letting passengers switch to different itineraries and is giving those who do a $50 per person onboard credit.
“We recognize Havana is a unique destination and may have been the reason for the selection of this itinerary,” Carnival noted in a statement explaining the loosening of its cancellation policy.
On Thursday, Norwegian Cruise Line said it, too, was allowing customers to cancel upcoming Cuba sailings for a full refund. The policy will apply to sailings through Sept. 2 and requires that passengers notify Norwegian of their desire to cancel by June 11. Alternatively, passengers can go ahead with the trips (which will visit alternate ports) and receive a 50% refund of the original amount paid. They’ll also get a 50% future cruise credit valid for sailings through Dec. 31, 2021.
Norwegian said Cuba sailings scheduled to take place beyond Sept. 2 would be automatically cancelled and refunded. New itineraries will be announced in the coming weeks, and customers impacted by the automatic cancellations will be offered a 20% discount off current cruise fares on any new voyages booked by Aug. 5, for sailings no later than Dec. 31, 2020.
A Blow to the Industry
Banned for most of the Castro era, cruises from the US to Cuba only resumed in 2016, after an easing of restrictions by the Obama Administration, and they account for just a tiny portion of the cruise business. In a recent research note, Wells Fargo estimated that just 1% of cruise giant Carnival Corp’s capacity was allocated to Cuba itineraries. The company is the parent of Carnival, Holland America, Princess Cruises and six other brands. At Royal Caribbean Cruises, the number is around 2.5%.
But Cuba has been a big area for growth and excitement for the industry over the past three years, and voyages to the destination have been commanding premium pricing.
“In terms of actual numbers of cruisers, it's not huge in the overall scheme of things,” Mike Driscoll, the editor of trade publication Cruise Week, told The Points Guy. But still, “Cuba matters.”
Not only has Cuba been attracting high yields, Driscoll said, but it’s also been something hot and new to get the buzz going about cruising at a time when demand for cruises in several cruise destinations across the world have struggled due to terrorist threats or political disagreements.
“It attracts fresh attention to cruising, and that's important given developments over the past years,” he said.
Driscoll said the sudden nature of the ban was causing a lot of chaos in the cruise world, for both cruise sellers and their clients.
Travel agents late Tuesday and Wednesday have been flooded with calls from confused customers wondering what happened and how it would affect them, he said.
“For [agents], in particular, it’s a blow because they have to spend so much time explaining these changes to customers instead of selling vacations and making money,” he said.
Driscoll noted that many travel agents were small business owners who operate on thin margins. “Time counts, because making money is not easy in this business.”
A Serious Disruption for Virgin Voyages
One line that is being affected much more heavily by the Cuba cruise ban is Virgin Voyages, the start-up brand backed by Virgin Group founder Richard Branson.
While Virgin’s first ship, Scarlet Lady, isn’t scheduled to debut until April 2020, the line already has been selling initial trips on the vessel for several months, and a significant portion of the voyages involve a Cuba visit.
In a statement Wednesday, the line said it already was working on alternative routings for the four- and five-night trips.
"While we are disappointed [in the Cuba ban], the beauty of sea travel means that we have the flexibility to take our ships to many wonderful destinations. The Virgin Voyages crew is hard at work making necessary adjustments to any affected sailings that feature a stop in Cuba next year.”
Virgin said it would have new itineraries to take the place of its Cuba sailings ready to announce by early next week. While the line’s change policy always allows customers to switch sailing dates with no penalty, the line said it would have an additional “special policy” for changes to affected Cuba sailings ready to announce next week.
Gene Sloan has written about cruising for more than 25 years and for many years oversaw USA TODAY’s award-winning cruise site, USA TODAY Cruises. He’s sailed on nearly 150 ships.
