Cruise ships and coronavirus: How will the cruise industry recover from COVID-19?

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This was published 3 years ago

Cruise ships and coronavirus: How will the cruise industry recover from COVID-19?

By Anthony Dennis
Updated
Cruise giant Ovation of the Seas, owned by Royal Caribbean, during a visit to Sydney in December.

Cruise giant Ovation of the Seas, owned by Royal Caribbean, during a visit to Sydney in December.Credit: Kate Geraghty

They've become modern-day Mary Celestes, except now, in the era of pandemic, these effectively port-less and unloved ghost ships are full of hapless abandoned multinational crews and passengers.

Safe harbours, including those in Australia, that just weeks ago welcomed them and the economic riches each vessel sunnily delivered, are now ruthlessly shunning them. Maritime law and humanitarianism are conspicuously ignored in a "every country for itself" display.

In a classic Catch-22 scenario, "Flags of convenience" - meaning ocean ships registered in often obscure tax effective ports such as Hamilton, Bermuda (population: 850) - have become an inconvenient truth in that these vessels have no genuine homes to which to return.

The Ruby Princess off the coast of Sydney.

The Ruby Princess off the coast of Sydney.Credit: AAP

After surfing the towering crest of a seemingly unstoppable tourism wave, which saw cruising become an extension of the Australian dream, that dream has rapidly and unexpectedly turning into a sad and damaging Poseidon misadventure.

Older, often elderly, middle-class Australians blessed with generous superannuation balances and investments and openly willing to spend their childrens' inheritance, embraced cruising with remarkable brio.

They even splashed further on it so that their children and their grandchildren could accompany them on cruises in what emerged as another lucrative segment for cruise lines. For these grey mariners, as opposed to grey nomads, there was never a chance that they'd spend the majority of their twilight years in the harsh daylight of lawn bowls greens. Globally within the travel industry, Australia became known as the cruise market with the highest market penetration on the planet.

Yet such is the devastation to cruising, which banked revenues of $US50 billion ($A83 billion) in 2018, particularly in the middle section of the market, that many normally loquacious industry figures across the travel business have gone to ground.

"The increase in cruises taken by Australians has been staggering, in part because of the excellent value for money they've offered," says one travel industry figure, who asked not be identified. "After the pandemic is over, price will be a significant factor.

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"I anticipate extremely low fares will be offered together with cancellation policies that may well be more flexible and favourable to guests. Core and repeat cruisers will likely benefit from future cruise credits but it will be harder to persuade new cruisers to take a voyage."

Once noticeably ignored by mostly US-headquartered cruise lines, Australia has proved a haven to position their often massive ships during the lucrative northern hemisphere winter. Indeed, Australian cruise passenger numbers more than doubled from 623,000 passengers in 2011 to 1.35 million in 2018 with Australasian itineraries immensely popular.

Then, suddenly over the shimmering horizon, came the coronavirus pandemic. Some cruise lines, particularly at the upper end of the market. wisely elected when the seriousness of the Covid-19 became evident to immediately withdraw their fleet and shelter from the impending storm.

But others kept cruising or were still in the middle of voyages. One ship, the Ruby Princess, with its 340 coronavirus cases at last count, became disastrously emblematic of both the pandemic and governmental incompetence.

The phrase "petri dish" becoming an instant cliché associated with cruise ships as the infection rate, and death toll, mounted - even though a ski resort in Austria also proved as effective an incubator, with as many as 2500 cases reported from it.

Cruise ships, particularly with their older demographic, had long been known for outbreaks of Norovirus, a highly contagious virus that causes vomiting and diarrhoea, but never in its history has the cruise industry, once disparaged as "God's waiting rooms" been exposed to anything of the of the magnitude of this aberrant, once-in-a-century pandemic.

However, the reality millions of passengers have disembarked from cruise ships in rude health and the recipients of memorable and luxurious holidays.

Mick Fuller, the NSW Police Commissioner, this week adopted a hard line with the cruise industry following the Federal and State Government's mishandling of the Ruby Princess debacle, for its refusal to shift ships off the NSW coast, accused cruise lines of failing to pay taxes in his state.

However, this ignored the reality that the cruise industry in 2018-19 contributed an estimated $5.2 billion annually to the Australian economy, according to the Cruise Lines International Association (CLIA), mainly in NSW where Sydney Harbour, or Port Jackson, is the premier port. A berth at the Overseas Passenger Terminal at West Circular Quay, flanked by the Harbour Bridge and the Opera House, is among the most prestigious in the world.

Even if the figure is exaggerated there's no doubt that cruising has provided some considerable benefit to the now crippled national economy.

Earlier this week, Sture Myrmell, president of Carnival Australia and P&O, expressed his bitterness at the manner in which the cruise industry has been "demonised" by Australian authorities including Commissioner Fuller, and reiterated the contribution cruising had delivered to Australia's economy.

"There are hundreds of local staff [affected] not to forget the thousands working on our ships. This is not only disappointing to us, but also to all the Australians whose livelihood depends on cruising," he said.

"We buy huge quantities of produce from local suppliers. And there are thousands of travel agents for whom cruising is part of their business. Regional economies are also among those who benefit."

True, among the beneficiaries of the cruise industry during its main season between October and April were local primary producers supplying ships with fresh food with Royal Caribbean alone spending upwards of $50 million on such supplies each season.

If cruising is to make a comeback and convince passengers to again come board, a major area to address will, unsurprisingly, be health and hygiene. Social distancing may well need to become a new and integral feature of the post-pandemic experience with health checks or even medical certificates required before embarkation.

Joel Katz, managing director, Australasia, of CLIA, stresses the importance of the health and safety message, rating it as a "top priority" for the future. He says that the average ship in Australian waters undergoes dozens of announced and unannounced safety inspections per year, involving hundreds of man-hours and the implementation of thousands of specific requirements set by Australian state and federal authorities.

"The intensive cleaning and sanitation processes we have and the onboard medical expertise available make us better-equipped to deal with health matters than virtually any other tourism sector," he says. "No other part of the travel industry has this level of medical expertise on hand at all times, so this will be an important asset."

"Whatever the challenges we're facing, it's important to remember that cruising is deeply embedded in the Australian community and is an enormous contributor to our tourism industry and to the national economy."

For the foreseeable future it's cold comfort for both the industry and its passengers. Although the public line is that the cruise industry's resilience will assist its comeback, privately there are those within cruising who consider its survival "a big challenge" with the task of enticing back even some of those grey mariners something even the Greek god Poseidon, protector of seafarers, may have baulked at.

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