Another week, another round of cruise industry cancellations. Last week it was Carnival (NYSE:CCL) (NYSE:CUK) pushing out most of its sailings into 2021. Only a half-dozen Carnival ships will be cruising on voyages leaving exclusively out of two Florida ports starting early next month.
On Monday it was Norwegian Cruise Line Holdings (NYSE:NCLH) suspending all of its November sailings across all three of its brands. The clock is now ticking on Royal Caribbean (NYSE:RCL). Will it follow Norwegian Cruise Line and just call November off? Will it follow Carnival and hold off until next year, keeping a few ships to test the local waters next month? Will it carve its own path?
Ports of stall
There was initially a sigh of relief last week when the Centers for Disease Control and Prevention (CDC) extended its No Sail Order only through the end of October. However, reports quickly surfaced that the CDC was hoping to keep U.S. sailings out of the water until at least February of next year until the White House intervened in favor of a shorter sentence.
The actual language of the order doesn't make it seem like a motion that's going to magically go away next month. It details the carnage that's taken place on ships internationally since U.S. sailings were suspended in March. It argues that even recent passenger voyages in foreign countries haven't been immune to COVID-19 outbreaks despite extensive health and safety protocols.
Carnival, Royal Caribbean, and Norwegian Cruise Line have time. The cruise line operators have raised billions apiece, more than enough to get deep into 2021 unscathed, but surviving isn't the same as thriving. The real problem continues to be the patience of consumers. There isn't a lot of evidence suggesting that cruising will be safe until the pandemic is contained, and a delay on that front could end this restart before it gets a chance to start.
Carnival's plan for a soft opening makes sense. A small handful of ships leaving from the same Florida coast will provide some degree of normalcy, but with a short enough leash to pull back if outbreaks start to take place. Norwegian and Royal Caribbean may want to take notes. Folks are still hesitant to travel far from home and we're in a recession, so it's not as if demand is going to exceed supply unless the lines relaunch with smaller fleets.
In the end it doesn't matter if Royal Caribbean follows one of its two peers or if it takes a third route as long as the CDC keeps moving the goalposts. These short and last-minute No Sail Order extensions are toying with passengers and are detrimental to the industry. No other travel niche has had to stay closed for this long. At the very least the parameters that the players need to follow to get back in business need to be made clear. After seven months of being locked out of making money, it's a fair request.