Although the CDC lifted its no-sail order, since the pandemic hit the U.S. shores in March, the cruise industry has moved from dry docks to a metaphorical Bermuda Triangle with no clear timetable as to when their ships can actually depart again.
After the order expired in late October, the industry moved from a total ban on sailing in the U.S. to a conditional sail order that requires cruise brands to prove to regulators that the right protocols are in place to limit the spread of Covid19. Each brand is responsible for chartering “test trips” with unpaid guests or Company employees to test these protocols, including quick pre-boarding tests and social distancing guidelines at sea.
While the No Sail Order had an expiration date, the Conditional Sail Order is expected to override November 1, 2021, or the “expiration of the Secretary for Health and Human Services statement that Covid-19 is a public health emergency” .
“I would say that the brands are looking at the conditional sailing order and its specificity and guidelines as additional clarity, which does not mean it is getting shorter,” said Paul Golding, a leisure and online travel analyst at global finance firm Macquarie .
Given the size of the order, it could be some time before the industry invests in marketing again. According to MediaRadar, a consulting firm that tracks ad spend, the cruise industry’s ad spend is still 79% down since March, while TV advertising is down 99% from 2019. Print and digital advertising do a little better, only 68% compared to 2019.
When the industry returns, capacity is expected to be greatly reduced, although executives have assured investors that their companies can operate at around 25% to 35% of onboard capacity and still break even when sailing. Cruisers whose itineraries have been canceled and who have chosen to accept credits for future cruises will be the first to board before ships can make more cabins available. Monday’s news of a promising vaccine could speed up that time span.
“If there’s a 90% chance to avoid infection, does that mean you can get back to 100% capacity sooner in 2022, 2023?” asked Golding. “Or does that mean now that the option is out there, responsibility now rests with the individual, not the company or the government?”
In any case, the marketing levers are thrown when booths have to be filled again.
“Filling ships to maximum capacity is the cruise line’s mantra,” said Arnie Weissmann, editor-in-chief of Travel Weekly. He assumes that brands won’t start advertising again until the second half of 2021.
“You’re going to get a huge marketing boost because it’s not about filling stalls – it’s about changing people’s attitudes,” said Daniel Craig, a travel marketing consultant who has worked with cruise brands. “Covid has been a PR disaster for the cruise lines and the vast majority of their customers are at risk. You have to clean up to regain trust. “
Additionally, one cruise is postponed or canceled every week – for the record, you can book a Carnival cruise for the first week of January – and a traveler has the option of opting for an all-inclusive vacation at the resort instead, especially in Mexico that has remained open to US travelers this summer and fall.
“People decide,” You know what? We’re not going to be cruising next year, we’re going to do something different, “said Craig.” The longer this takes, the more devastating the financial impact. “
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