Some cruise lines are running out of 2020 calendar pages to check off. Carnival's (NYSE:CCL) (NYSE:CUK) Holland America is announcing this week that it is suspending all sailings through at least mid-December. It joins Princess Cruises, another Carnival-owned line, in pushing out its resumed operations to Dec. 15. The silver lining is that it would position both lines to still cash in on lucrative year-end holiday cruises, if potential passengers can believe the new dates will stick this time.

Every game plan is different. The namesake Carnival, Royal Caribbean (NYSE:RCL), and Norwegian Cruise Line (NASDAQ:NCLH) fleets are currently targeting a return in November, but some niche players have even more ambitious schedules. We're now less than four weeks away from the restart of Carnival's AIDA line for sailings originating in Germany. However, it does seem as if whenever Carnival, Royal Caribbean, or Norwegian Cruise Line puts out a statement, it's about pushing back a collection of restart dates. For all the good that the cruise lines have done in fortifying their liquidity since the industry's initial interruption five months ago, it's not a good look to see them not getting any closer to getting back to business out of their more lucrative ports. 

A pair of empty deck chairs on a cruise ship facing the sea.

Image source: Getty Images.

Six months in a leaky boat 

Holland America is a small part of Carnival's business, and it was on its way to getting even smaller before Tuesday's news. The cruise line announced last month that it would be selling 4 of the smaller ships in its 14-vessel fleet. 

It's not just Holland America that's shrinking. The industry itself is aware at this point about the near-term challenge of waning demand for cruising vacations. Some cruise lines have looked to unload some of their underperforming ships while delaying shipyard deliveries of new orders. Whether the industry is sailing again out of most markets by the end of this year or at some point in 2021, it will be with a smaller overall fleet. There's nothing wrong with taking a step back in terms of capacity, especially since empty berths are profit killers in this travel niche, with high fixed costs that need to be divided among its revenue-generating passengers to stay afloat.

The good news is that the larger players aren't going away. Carnival, Royal Caribbean, and Norwegian Cruise Line have more than a year of liquidity on their books given their recent cash burn rates. The real problem now is keeping its potential customers close and its disgruntled customers closer. 

Cancellation fatigue is simmering. Royal Caribbean reported in this week's quarterly report that 48% of its customers on nixed sailings have opted for cash refunds instead of enhanced future credit, but the situation is more dire at Norwegian Cruise Line, with 60% of its passengers requesting cash refunds. One can expect the percentages to go higher as the water gets murkier for a potential return. 

It's not a surprise that even folks who want to sail again are taking a cautious approach. Royal Caribbean reported this week that while bookings for next summer and the second half of 2021 have been strong, sailings for the first quarter have been soft. This isn't a seasonality issue, as Royal Caribbean is comparing next year's trends to where we were a year ago looking into 2020. With consumer discretionary stocks already getting squeezed in these iffy economic times, you're not going to talk people into big-ticket purchases when there's no confidence that the actual voyages will take place. 

Sentiment will naturally turn around quickly the moment the first stateside sailings begin as early as November. We'll also have some initial data from smaller markets that resume operations before that, and as long as we don't get any major COVID-19 outbreaks aboard those early voyages, confidence could be high heading into the larger restart.

So much can go wrong, but everything changes the moment cruise travel proves to be a safe and reliable vacation option again.