Cruise Lines fears another lost summer

“I never thought I’d be in a food queue for hours,” said James Cox, a 50-year-old porter, who used to earn $ 27 an hour by fighting passengers and their luggage. “Only the degradation of that. You say to yourself, ‘Wow, I’m really at this point.’ “

Like the rest of the maritime tourism industry, Port Canaveral was shut down at the beginning of the coronavirus pandemic. A year later, as other parts of the economy come to life, the U.S. cruise industry is anxiously waiting for Washington’s green light to sail again – and worried that a second summer season is about to be missed.

Other countries, including Singapore, Italy and the United Kingdom, have either authorized cruises or set a clear target date for boarding. Nearly 400,000 passengers have traveled since some countries began allowing cruises in July 2020, according to the industry’s commercial group.

But to start in the US, the cruise industry needs guidance from the Centers for Disease Control and Prevention.

The CDC suspended its boarding ban order in October and replaced it with a conditional set of rules; industry officials say the 40 pages of rules are indecipherable or impractical, as a measure that requires cruise lines to undertake “simulated trips” with voluntary passengers.

“I refer to this as the ‘impossible to navigate order’ because no company could operate profitably,” said Captain John Murray, executive director of Port Canaveral.

The CDC said that guidance will come soon. “Future orders and technical instructions will address additional activities to help cruise lines prepare for and return to passenger operations in a way that reduces the risk of Covid-19 among passengers and crew members,” said spokesman Jason McDonald in a statement, declining to comment further.

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

The order was written before vaccines were approved, and the CDC did not say whether it would revise the guidance to incorporate vaccinated crew and passengers.

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

Washington’s hesitation may partly reflect the cruise industry’s problems at the beginning of the pandemic.

Cruise companies continued to sail, despite the known risks of coronavirus, an investigation by The Wall Street Journal revealed. Ports refused to allow ships with passengers sick with Covid-19, and giant ships were stranded at sea.

As the distribution of Covid-19 vaccines in the United States increases, President Biden expects a return to a sense of normalcy in July. Theme parks, casinos, airlines and hotels are operating with restrictions and security measures, and the cruise industry says it can do the same.

“I hate to speculate, but I think the CDC looks at this and thinks, ‘Is this a risk that we really need to take?’ ”Said Brian Salerno, senior vice president, global maritime policy, Cruise Lines International Association, the cruise industry’s leading commercial group. “Having a marginalized industry like this, based on a bad perception, is asking a lot.”

Competitors are taking advantage of the vacuum. Hong Kong-based Genting Cruise Lines said in a March 12 financial document that Crystal Serenity would begin sailing from the Bahamas in July, landing in the Americas – but ignoring the jurisdiction of the United States and the CDC. A week later, the Royal Caribbean Group said it would send its own cruise out of Nassau in June, avoiding US ports in the same way.

Cruises to Alaska face an extra obstacle. Most of these ships have a foreign flag, so they would have to make a stopover in Canada, because US law prohibits these ships from carrying passengers between American ports. The problem: Canada banned cruises until February 2022.

About 60% of all Alaskan visitors arrived by cruise ship in 2019, according to a report by the Federal Maritime Commission in October.

The Republicans Sens. Dan Sullivan and Lisa Murkowski of Alaska asked the Canadian government to reconsider their ban and introduced legislation to allow cruise ships bound for Alaska to bypass Canada. Either plan is based on the CDC, allowing cruises to resume.

“The CDC – the best scientists in the world. They were not designed to be regulators of tourism in America. They are not good at this, ”said 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 growing industry. In 2019, about 14 million cruise passengers departed the U.S., generating a record $ 55.5 billion for the U.S. economy and supporting more than 436,000 jobs in the U.S., according to the cruise line association.

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

CCL 2.44%

, Royal Caribbean and Norwegian Cruise Line Holdings Ltd.

NCLH 2.59%

“You have had great financial successes.

With revenue deeply depressed throughout 2020, companies raised money from huge bond and stock issues, according to industry analysts and corporate reports. The big three told investors that they have enough cash on hand to reach the 2022 cruise season.

They also aggressively cut expenses, freed up workers and, in some cases, sold older and less efficient ships, which are not so profitable to operate.

Even standing still is expensive. Carnival Corp. told investors in February that he hoped to burn an average of $ 600 million in cash a month just to keep the ships up and running, sustain corporate operations and invest in preparations to return to sea.

“In the past year, there has been an extraordinary amount of loans that have taken place in the industry,” said Melissa Long, director of Standard & Poor’s who covers the cruise industry.

The commercial group and cruise lines spent $ 4.4 million with federal lobbyists last year, the industry’s largest investment since 2008, the start of the last recession, according to lobby records.

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 businesses, including ports, say they have been trying to draw Washington’s attention to their situation in the past year, putting pressure on lawmakers and government officials.

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

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

Nearly 5 million passengers passed through Port Canaveral in 2019, second only to Miami on cruise activities. Many U.S. ports are a mix of cruise and cargo, but here the cruise side usually accounts for about 80% of revenue.

Now, passengerless ships stop at the terminal a few times a month for supplies and maintenance. No members of the skeleton crew are allowed on land. On a recent March afternoon, Disney DIS -0.59%

Fantasy played some melancholy notes from “When You Wish Upon a Star” as you pass through Port Canaveral’s Jetty Park.

Mike Horan is monitoring cruise-related Facebook pages for any signs that his dying space shuttle business might be reactivated anytime soon.

“This is our port,” he wrote on his Facebook page recently, sharing a photo of a ghost ship at anchor. “Cruise ships are now just decorations.”

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