The coronavirus outbreak will hit the cruising industry where it hurts most - new business
Anne Sagebiel had been pondering what to do for an upcoming birthday later this year, and the notion of taking a cruise for the first time appealed to her. Maybe something in Europe; Norway sounded enticing.
But then she started hearing about "the cruise ship from hell" - the Diamond Princess, which was quarantined off the coast of Japan with thousands aboard on Feb. 5. As of early Tuesday, authorities said 542 of the 2,404 passengers and crew whose test results were known had been infected; more than 1,000 additional people were still awaiting their results. Forty-four Americans onboard have tested positive for coronavirus, according to U.S. health officials.
"I don't want to be involved in a worst-case scenario," said Sagebiel, a nature photographer in Colorado. "Cruises are off the table until they figure this out."
That sentiment is bad news for the growing cruise industry, which has taken a multimillion-dollar financial hit as the situation unfolds. Bookings are down, according to some major players, and the nonstop attention has been damaging.
"We're always covering these things in terms of the ability to move ships out of harm's way," said Mike Driscoll, editor in chief of the trade publication Cruise Week. "The industry is known for its resiliency, etc., etc. But this one's just so different."
Four days before the Diamond Princess quarantine was set to end on Feb. 19, U.S. officials said they would evacuate American citizens from the ship, as long as they showed no symptoms, and fly them to the United States - where they would be placed into another 14-day quarantine.
The Diamond Princess is the only cruise ship where coronavirus was believed to have been spreading, but it was not the only one affected by the outbreak, which has sickened more than 73,000 people and killed more than 1,870.
Another ship, the World Dream, with more than 3,800 people aboard, was stuck in quarantine in Hong Kong for four days after authorities learned that passengers on a previous cruise had tested positive for the virus. Everyone was allowed to disembark after crew members tested negative and passengers passed health screenings.
No one on Holland America Line's Westerdam was known to be ill during a voyage that started in Hong Kong, but that ship and the more than 2,200 people onboard spent days at sea when port after port denied permission to dock. Cambodia came through, and passengers began to disembark on Friday. But that decision was called into question the next day when officials announced that one woman who was on the ship tested positive in Malaysia after flying there from Cambodia. Since then, Malaysia, Thailand and Singapore have said they will not allow passengers from the ship to travel through their airports, according to Bloomberg News.
Several other ships have been told they cannot stop at ports because of coronavirus fears, and earlier this month, Royal Caribbean International's Anthem of the Seas delayed departure by two days while passengers who had been in China previously were tested. None had the illness.
Similar ordeals have played out across the world, with headlines referring to the "coronavirus cruise ship nightmare," the "pariah cruise ship" and "floating petri dishes." The attention comes at an inopportune time, during the busy "wave season," when many travelers book cruises.
And although Asia still makes up a fraction of the market for global cruising - the Caribbean and Mediterranean, for example, attract far more people - it has been a focus for cruise operators looking to expand their global footprint. In 2018, according to the Cruise Lines International Association, 28.5 million people took a cruise on one of its member lines. Approximately 2.5 million of them were from China.
In a financial update on Feb. 12, industry leader Carnival Corp. - which owns Princess Cruises and Holland America Line - said the company expects to take a hit higher than initially expected as a result of trip cancellations in China and other parts of Asia. Carnival also expects global bookings to be affected, but it could not yet quantify how that would impact the bottom line.
"Since the situation continues to evolve, the company is currently unable to determine the full financial impact on its fiscal year 2020," the update said. If Carnival had to suspend all operations in Asia through the end of April, the operator said, the financial blow would amount to $385 million to $445 million, a total that does not include the hit from softer bookings. Carnival reported a $3 billion profit last year.
Royal Caribbean Cruises, the world's second-largest cruise company, said in its update on Feb. 13 that it has had to cancel 18 trips in Southeast Asia and modify several other itineraries. Those changes have already cost the company about $136 million. Canceling remaining trips in Asia through the end of April, which is not the current plan, would cost another $115 million.
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