Some travel industry experts fear the cruise holiday business may never recover from coronavirus and shares in cruise companies have collapsed. Governments across the world have banned new cruises setting sail for months and some sailings have been suspended until at least November 2020.
All cruise companies are struggling financially. Royal Caribbean has secured a $2.2bn (£1.7bn) loan against its ships. Norwegian Cruise Line has drawn down a $1.55bn credit line. Shares in the London-listed Carnival Corporation, the world’s largest cruise ship operator and the owner of the Diamond Princess, collapsed by 80% between February and the peak of stock market panic in mid-March.
However, Carnival shares have gained 60% this week after the company secured $6.25bn of rescue financing, mostly secured against $28bn worth of its ships, and Saudi Arabia’s sovereign wealth fund revealed it had built an 8.2% stake in the company.
“People got really buoyed up by the Saudis buying in,” Ross Klein, a professor at the maritime studies research unit at Memorial University of Newfoundland, said. “People say he got a great deal and he’s going to make a fortune. That may be the case but I don’t see cruising bouncing back quickly.”
Klein said cruise companies will have to work hard to win back consumers’ trust. “There will be some great deals for consumers to convince them to come on cruises,” he said. “But it is going to be a hard task convincing people that cruise ships are safe. It will be a very long time until cruise ships are trusted by the Australian government and consumers.”
Australian authorities this week launched a criminal investigation into how passengers on the Ruby Princess were allowed to disembark in Sydney despite some exhibiting flu-like symptoms. More than 600 people on the ship later tested positive for coronavirus and 11 have since died – more than a fifth of Australia’s deaths so far. The New South Wales police commissioner accused Carnival of potentially breaching biosecurity laws and allowing the virus to arrive in Australia.
The industry has managed to bounce back from a series of other disasters, including the capsizing of the Costa Concordia off the coast of Tuscany in 2012, which resulted in 33 deaths, and numerous outbreaks of norovirus, rotavirus and legionnaires’ disease.
But Klein described the coronavirus pandemic as an “off-the-scale challenge”.
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