Cruise lines fear another summer lost

“I never thought I would be in a food queue for hours,” said James Cox, a 50-year-old doorman who used to make $ 27 an hour wrestling with passengers and their luggage. ‘Just the degradation of it. You say to yourself, “Wow, I’m really at this point.”

Like the rest of the maritime tourism industry, Port Canaveral was mothballed at the start of the coronavirus pandemic. A year later, as other parts of the economy come back to life, the US cruise industry eagerly awaits Washington’s green light to sail again – and is concerned that a second summer season is on the verge of disappearing.

Other countries, including Singapore, Italy and the UK, have either authorized cruises or set a clear target date by which to depart. According to the industry’s trade group, nearly 400,000 passengers have sailed since some countries first began allowing cruises in July 2020.

But to get started in the US, the cruise industry needs leadership from the Centers for Disease Control and Prevention.

The CDC lifted its no-sailing order in October and replaced it with a conditional set of rules; Industry officials say the 40 pages of rules are either indecipherable or impractical, such as a measure requiring cruise lines to conduct “simulated travel” with volunteer passengers.

“I call it the ‘impossible task’ because no company can operate profitably,” said Captain John Murray, Port Canaveral’s CEO.

The CDC said the guidelines are coming soon. “Future orders and technical briefing will address additional activities to help cruise lines prepare for passenger operations in a way that mitigates Covid-19 risk among passengers and crew,” said spokesman Jason McDonald in a statement, declining to comment further. to give.

A White House spokesman did not respond to a request for comment.

The order was written before vaccines were approved, and the CDC has not said whether it will revise guidelines to include vaccinated crew and passengers.

Without CDC direction, cruise lines cannot begin the months-long process of implementing security measures and recalling thousands of workers from around the world, industry officials said.

Washington’s hesitation may have stemmed in part from the cruise industry’s troubles at the start of the pandemic.

Cruise lines kept sailing despite known coronavirus risks, according to a study by The Wall Street Journal. Ports refused entry to ships carrying passengers sick from Covid-19, and giant ships were trapped at sea.

As the introduction of Covid-19 vaccines in the US progresses, President Biden predicts a return to a sense of normalcy by July. Theme parks, casinos, airlines and hotels all operate with restrictions and security measures, and the cruise industry says it can do the same.

“I hate to speculate, but I think the CDC is looking at it and thinking, ‘Is this a risk we really should be taking?’ Said Brian Salerno, senior vice president of global maritime policy at Cruise Lines International Association, the cruise industry’s premier trade group. . “

Competitors take advantage of the vacuum. Hong Kong-based Genting Cruise Lines said in a March 12 financial filing that Crystal Serenity would begin sailing from the Bahamas in July, disembarking in America, bypassing US and CDC jurisdiction. A week later, Royal Caribbean Group said it would send its own cruise from Nassau in June, avoiding US ports in the same way.

Cruises to Alaska face an additional hurdle. Most of those ships fly a foreign flag, so they should make a stopover in Canada, because US law prohibits such ships from carrying passengers between US ports. The problem: Canada has banned cruises until February 2022.

According to an October report by the Federal Maritime Commission, about 60% of all visitors to Alaska arrived by cruise ship in 2019.

The Republican Sens. Alaska’s Dan Sullivan and Lisa Murkowski have asked the Canadian government to reconsider its ban and have introduced legislation to allow Alaska cruise ships to bypass Canada. Both plans are based on the CDC, allowing cruises to resume.

“The CDC – the world’s best scientists. What they are not designed for is to be a regulator of tourism in America. They are not good at that, ”said Mr. Sullivan in an interview. Despite his office’s almost daily contact with the agency, he said, “They have no answers.”

The pandemic destroyed, at least temporarily, what was a growth sector. In 2019, approximately 14 million cruise passengers departed from the US, generating a record $ 55.5 billion for the US economy and supporting more than 436,000 jobs in the US, the cruise lines association said.

The Industry’s “Big 3” – Global Cruise Line Operators Carnival Corp.

CCL 2.44%

, Royal Caribbean and Norwegian Cruise Line Holdings Ltd.

NCLH 2.59%

– achieved big financial hits.

While earnings were under deep pressure over the course of 2020, the companies raised money with massive bond and equity issues, according to industry analysts and corporate records. The big three have told investors they have enough cash on hand to make it through the 2022 boating season.

They have also aggressively cut their spending, leave workers and in some cases sell older, less efficient ships, which are not as profitable to operate.

Even standing still is expensive. Carnival Corp. told investors in February that it expected to burn an average of $ 600 million in cash a month just to keep ships going, support operations and invest in preparations to return to sea.

“There has been an extraordinary amount of borrowing in the industry over the past year,” said Melissa Long, a Standard & Poor’s executive who deals with the cruise industry.

The trading group and cruise lines spent $ 4.4 million on federal lobbyists last year, the largest investment in the industry since 2008, the start of the latest recession, according to lobby reports.

Carnival Corp. CEO Arnold Donald told investors in January that the company and its rivals are “in constant communication” with federal officials, including the CDC, about the reopening process.

Cruise-related companies, including ports, say they have spent the past year trying to draw Washington’s attention to their plight by putting pressure on lawmakers and government officials.

Unions representing dockers on both coasts say workers have lost hundreds of thousands of hours since the pandemic hit.

In Port Canaveral, Phil Charlton, who has worked in the industry since 1985, has taken a part-time flower delivery job along with his wife Olivia, also a port worker. Bob Baugher, owner of hotels and transit buses in the area, said his businesses lost $ 16 million in revenue last year.

Nearly 5 million passengers passed through Port Canaveral in 2019, making it second to Miami for cruise operations. Many US ports are a mix of cruise and cargo, but here the cruise side usually makes up about 80% of the revenue.

Now, passengerless ships enter the terminal a few times a month for supplies and maintenance. None of the skeleton crew is allowed to come ashore. On a recent March afternoon, the Disney DIS -0.59%

Fantasy blared a few melancholic notes from “When You Wish Upon a Star” as it passed Port Canaveral’s Jetty Park.

Mike Horan keeps an eye on cruise-related Facebook pages for any sign that his dying shuttle business may soon be revived.

“That’s our harbor,” he recently wrote on his Facebook page, sharing a photo of a docked ghost ship. “Cruise ships are now just decorations.”

Write to Julie Bykowicz at [email protected] and Ted Mann at [email protected]