If you were preparing for a getaway on the ocean, don't pack those bags just yet. On March 13, Royal Caribbean Cruises (NYSE:RCL) voluntarily suspended all U.S. cruises for thirty days due to the COVID-19 outbreak. The suspension goes into effect at Friday at midnight.
A day earlier, cruise competitor Carnival Corporation (NYSE:CCL) also voluntarily suspended some of its cruises. Later that same day, Sir Richard Branson postponed the maiden voyage from Virgin Voyages.
A stressed travel industry
Both Royal Caribbean and Carnival have now cancelled cruises, but the decisions are different. Carnival only suspended cruises from its Princess Cruises line. However, those cruises are cancelled worldwide for a full 60 days.
Royal Caribbean on the other hand is only suspending U.S. cruises for now. The suspension also has a much shorter duration at just 30 days. While this is an extremely challenging time for the company, it already began preparing for a difficult 2020 when it withdrew financial guidance, increased its credit facility, and cut capital expenditures earlier in the week.
What this means exactly for Royal Caribbean's customers and staff is still unclear at this time. The company said it was reaching out to both groups of people, helping them decide how to proceed. While this move is merely inconvenient and disappointing for would-be passengers, it can be downright stressful for employees as they await the personal financial outcome.
Responding to the impact from COVID-19, many consumer discretionary businesses are making proactive decisions for good. Starbucks is taking care of its hourly employees by giving paid time off for the coronavirus. Grubhub is supporting small businesses by waiving $100 million in fees to independent restaurants. And Carnival, after cancelling cruises, is transferring customers to new cruises with on-ship incentives.