Posted on 05/16/2020 11:59:17 AM PDT by Capt. Tom
Cruise lines are burning anywhere from $100 million to $1 billion a month as they wait on cruises to resume. Carnival Corporation, Royal Caribbean Cruises, and Norwegian Cruise Line Holdings have all raised money to stay afloat during this unprecedented shutdown due to the COVID-19 pandemic.
It’s been over two months since the last cruise ship departed from Miami on a revenue sailing. When Navigator of the Seas left Miami for a three night cruise to the Bahamas on March 13, the pause in cruises was originally scheduled to last for 30 days.
Although cruise lines have given tentative start dates, no one knows for sure when cruises will start back up as the dates keep getting pushed back. It’s important to note that these start up dates are not set in stone and will likely continue to change. How much cash and liquidity do each of the major cruise lines have and how long can they go without cruises starting back up?
None of the cruise lines are in danger of filing for bankruptcy anytime soon. Norwegian Cruise Line Holdings is now in the best shape of the major three cruise lines after raising over $2 billion last week. Norwegian is currently burning $70-$110 million each month. The company now has enough cash to last until late 2021, even after refunding $67 million to passengers each month from canceled cruises.
Royal Caribbean has roughly one year worth of liquidity. The world’s second largest cruise company is currently burning a little over $300 million a month and they have just under $3.5 billion in capital. Royal Caribbean Cruises sent out a press release earlier this week stating that they are offering 28 of their cruise ships as collateral to secure additional liquidity to make it through this tough time.
Carnival Corporation, the world’s largest travel leisure company with nine cruise lines and over 100 cruise ships, was burning roughly $1 billion a month. In a recent call, Carnival stated that they have enough cash to last through the end of 2020 without cruises resuming. However, the company took additional action this week announcing a combination of layoffs, furloughs, reduced work weeks and salary reductions across Carnival Corporation, including senior management. These moves will contribute hundreds of millions of dollars in cash conservation on an annualized basis.
As you can see, none of the major cruise lines are in danger of filing for bankruptcy anytime in the near future. If one did have to file in 2021, they will likely file for Chapter 11, allowing them to stay in business and reorganize. The cruise industry is a significant contributor to the U.S. and global tourism sectors, according to the Cruise Lines International Association (CLIA), with economic impact in the U.S. exceeding well over $50 billion in total contributions.
On a global scale, the economic output due to the cruise industry continues to produce new jobs and income, generating a total global output of over $150 billion and supporting over 1.2 million total jobs.
Carnival Corporation’s cruise lines: Carnival Cruise Line, Princess Cruises, Holland America Line, Cunard, Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises, & P&O Australia.
Royal Caribbean’s cruise lines: Royal Caribbean, Celebrity Cruises, Azamara, and Silversea Cruises. The company is also a 50% owner of TUI Cruises and a 49% shareholder in Pullmantur Cruises.
Norwegian Cruise Line Holdings’ cruise lines: Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises.
Some of the cruise lines are grasping at straws to accommodate the new interference of these health agencies such as Royal Caribbean thinking of getting rid of the buffet and having people wearing masks.
Other cruise lines have entertained ideas like having a Doctors certificate saying the passenger was fit o travel.
And many other ideas introduced to pacify health agencies and Governments .Like having every other cabin empty.
To me, cruising should be carefree and not a hassle.
This year ,2020 should be an economic disaster for cruise lines, and although bookings look good for 2021, to me that is still up in the air. -Tom
Maybe a few Americans will buy them up, reflag them, and hire Americans to crew them.
Currently, affected American workers, which are few, are getting unemployment and can find new jobs like the rest of us.
“To me, cruising should be carefree and not a hassle.”
Used to work for a certain cruise line as a steward boy when I was 20 during the summer/fall run. Seattle-Vancouver-Alaska. The way it was explained to me that the cruise ship has no specific season. If there is a destination, they’ll create it. And the one thing I hated are the close spaces inside which exacerbated the issue. It all depends on the size of the ship.
Sane thing with my uncle who is retired Navy who made his tours on mostly destroyers.
Last cruise I went on put me in hospital for a week. I’ll stay at home and watch “cruise from hell” vids on youtube. Still don’t understand why tables aren’t bolted down; they are good for chasing passengers.
At home I know with certainty that the water is safe and that the commode works.
Some of the cruise lines are grasping at straws to accommodate the new interference of these health agencies such as Royal Caribbean thinking of getting rid of the buffet and having people wearing masks.”
They do this and say goodbye. We don’t use the buffet much except maybe the first couple of days, any experienced cruiser will tell you the buffets at the beginning of a cruise are way better then at the end. But a lot of people love them. Everyone one in masks will make people feel like they are just one sneeze away from dying. Bad idea. Don’t fall prey to overreaction to a disease with a less the 1% mortality rate.
who the hell cares?
Any company that is not registered in, and doesn’t pay taxes to the United States can damn well go to hell.
No great loss; the smallest store on Main Street is more important and should get more assistance than any entity that doesn’t have its headquarters, physical facilities, and highest-paid employees here.
If they at least had English speaking, taxpaying American citizens as their crew and flew an American flag *maybe* thier floating petri dishes should get some aid.
That might happen for a few ships, fulfilling a niche. , but worldwide foreign flagged is the way to go, to save on taxes and regulations.
In a competitive business you don't want to have to deal with American unions, American employees, American regulations and American politicians. Also we want the ships built here in this country.
I realize that requirement could get waived. -Tom
The RV industry was booming before Covid-19 and press reports indicate RV sales are very strong in the middle of the pandemic. Consider you can travel throughout the US and Canada hassle free. You are carrying your living environment with you and you have control of who enters or leaves your RV. It is your bed so if there are bedbugs they are yours. You control how clean the toilet and shower are. You can prepare your meals in your own kitchen, in which you are in control of the sanitation as well as the quality of food, or you can eat out — your choice. Most RV travelers are middle and upper middle class retirees and the majority have conservative political beliefs and values. Campgrounds range from free primitive sites in national forests or BLM lands to luxury resorts costing over $100 per night to park. Of course it is your choice where you want to park for the night. If you don’t like the location you are in, you can move on in the morning.
There are more wonderful places to visit in the US and Canada than are possible to see in a lifetime. My wife and I bought an RV as we approached retirement nine years ago and our bucket list keeps growing, not shrinking. We’ve discovered most of the beautiful natural wonders are not in the top 10 national parks. There are incredible vistas from solitary campsites on creeks in public lands. There are wonderful small towns with music festivals, artisan shows, and farmer’s markets with fresh organic produce and meats. A raft trip down a rolling river, a kayak outing on a mirror lake. The desert in bloom, the hillsides awash with fall color, a printing beach with sand as white as snow, and a snowfall on a 12,000 foot mountain during the first week of July are just a few of the adventures we’ve experienced. Not to mention meals in small towns restaurants the locals frequent, and the many historical sites permitting one to be immersed in the history of this great country.
There are multiple choices for homes on the road ranging from tents, to trailers, to vans, to massive million dollar motorhomes. I’ve been amazed at the number of seniors traveling and living their dreams on a social security income and very modest savings. Unlike the dollars spent traveling abroad, or cruising on a foreign ship, most of the money RV travelers spend cycles directly back into the US economy.
After nine extraordinary years of wandering the country 100-150 days per year, the bucket list is longer than when we began the journey. My wife and I have been on several cruises and will never go again. We’ve traveled to Europe, Asia, and South America but have no desire to go back. The mountains, prairies, deserts, towns and seashores of our own country are calling, and we will continue to respond to the call.
My wife and I have cruised over a dozen times with no problem. Like anything else there is always a chance some thing will go wrong. We love cruising and it is by far the best vacation for the money to us. I do however know it is not for everyone ....to each his own!!!
“by far the best vacation for the money”
ditto here
15 trips since 2012. Most on HAL.
Note:
Many of HAL food stations are already staff controlled. They make your salad, etc.
The tables of 12 in the dining room will be gone.
I predict ships will be opened with balcony only rooms sold. Nothing sealed from outside air at first. Oceanview to me is as useless in this environment as inside cabins.
We are diamond on Royal Caribbean
You are wrong...we are booked Sept 12th ...inside cabins are available.
Capt. Tom wrote: “In a competitive business you don’t want to have to deal with American unions, American employees, American regulations and American politicians.”
IIRC, Norwegian Cruise Lines tried that with three ships sailing in/around/to/from Hawaii. It was a dismal failure. One of the biggest complaints was the surly attitude and the lack of service from the union employees. A second complaint was the high costs of cruising on those ships. Only one of this ships remains under US flags mostly as a favor to the unions. The ship caters to those who want to ‘sail American’.
BTW, do you post on Cruise Critic?
booked does not equal sailed
What port are you hopefully sailing from ?
Second issue when they sail — what ports will open — it take multiple countries to be open.
Thank you for the ping, Capt!
I might book an inside cabin (for price) but expect that they might be forced to upgrade to outside air cabins.
I care because after 3 dozen cruises under my belt I am aiming for a couple dozen more.
FR is the only forum I comment on cruises.
Shark are one of my interests, but I will have to wait another month for the white sharks to start showing up here in Mass. - Tom
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