Cruise Sector counts the cost of the coronavirus crisis.

Cruise Sector counts the cost of the coronavirus crisis.

14-08-2019Teresa Ayuga

Being optimistic is most certainly a virtue, but there is optimism and there are flying pigs. Not that it is flight which concerns me here, it is what happens on the seas - or doesn't.

Alfredo Serrano is the National Director of the Cruise Lines International Association, or CLIA, in Spain. He said the other day that cruise lines are ready to operate at full capacity this summer. If restrictions are lifted in May, these companies will be in a position to receive passengers and resume their itineraries immediately. He added that "there will be difficulties", but people will soon be ready to travel. "We will again have more demand than supply."

This was in a report with the headline "Cruise ships ready to set sail again in May". The headline was itself jaw-dropping. Sr. Serrano's apparent optimism was doubly so. Does he seriously believe that a) restrictions will be lifted in May and that b) passengers will be so desperate to get back on the cruise ship horse that they will ignore those various virus-related reports? Pigs might fly or, more accurately, swim.

It is quite possible that Sr. Serrano had other things to say and so there was some selective reporting. Nevertheless, there appeared to be a good deal of whistling in these darkest of times to keep up spirits, as it does seem particularly optimistic to suggest that the cruise-going public will, in the short term for sure, think it is safe to go back on the water while the Jaws of virus might still be lurking just below the surface. But it won't be up to the passengers (or the cruise lines) anyway. There are "the authorities", and they certainly won't be in a hurry to put up the bunting at docksides and organise local bands of music to pipe shiploads of cruise tourists ashore.

At the same time as the CLIA director's comments were being reported, one of the major cruise lines, Costa Cruises, was announcing an extension to a worldwide suspension of activity until the end of May. The company's statement noted the "containment measures" that are currently in place - restrictions on people's mobility and the closure of ports.

Quite. And where the ports are concerned, their closure may be for far longer than the cruise industry would like. The Spanish government, for one, appears to be contemplating a summer-long closure. The Balearic government, which was unable to control the situation with ships coming into Palma because it doesn't have responsibility for the state ports like Palma, had insisted that the ports should have been closed earlier than they were. The regional government, one feels certain, will be very wary in giving its backing to a reopening of the ports. Resuming itineraries? Not if no itineraries are being permitted.

The cruise sector, as with the whole of the tourism industry, is being ravaged, but its recovery may prove to be the most difficult. The case of the "Zaandam" is just one reason why. Tolo Deyá, Dean of the Faculty of Tourism at the University of the Balearic Islands, is not alone in having referred to the particular risks associated with cruise tourism. Moreover, there is the profile of the cruise tourist. In general terms, a third of all cruise passengers are over the age of sixty. Advice on travel for the elderly and even potential restrictions on travel will be for "the authorities" to determine.

As with airlines, cruise lines are facing a desperate financial situation. Earlier this month, as an example, the Carnival Corporation announced that it would be looking for 6,000 million dollars in order to survive the crisis. Carnival's brands include Costa Cruises, P&O, AIDA, and Holland America (the "Zaandam" operator). To put this financial requirement into some sort of context, it is three times the amount that the German government has made available to Tui.

Carnival has managed to find this liquidity on the bond market and through a stock sale, while the Public Investment Fund of Saudi Arabia has acquired an eight per cent stake, which is valued at 340 million euros. So there is still confidence in the sector, even if Carnival will be paying hefty interest.

Eventually, things will turn around, and when they do, one wonders if we'll be back to all the arguments about cruise ships and cruise tourism. Almost certainly we will be, but right now that opposition seems redundant. The crisis has taken the wind out of the sails of the cruise opponents. None have ever gone so far as to advocate there being no cruise ships, but at present this is the case. How do these opponents approach the situation that cruise tourism and indeed the whole tourism industry finds itself in? They have shouted long and hard about saturation and what have you, but when this saturation is disrupted, the consequences are extreme. And these opponents must surely appreciate this.

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Lisa / Hace about 1 year

If the government really want to present Mallorca as an upmarket destination, they’ll take this time to restrict the number of cruise ships that blight the island. They bring pollution and mass crowds, that blight areas in Palma for very little return. Do we want these corona carriers back? No thanks. Let’s make Mallorca a destination with a reputation for supporting eco-friendly tourism. Then at least something positive can come from this terrible time.

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Martin / Hace about 1 year

What a load of claptrap you spout

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Mark Badoer / Hace about 1 year

Hopefully a lot of these cruise companies will go out of business. These ships are a menace, so is the influx of people swomping the streets of Palma. Besides and as we know, these ships are corona virus incubators.

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