For a while, it looked as though the stormy seas of the pandemic would calm in time for the major cruise lines to get their U.S.-based ships fully back into operation and sailing from domestic ports again by mid-July. Now, it's clear that was a bit too optimistic a view.
Carnival (CCL 2.30%) (CUK +6.55%) is canceling voyages on most of its ships until the beginning of August, depriving it of revenues for another portion of the seasonally potent summer travel period.
The world's largest cruise line now plans to welcome passengers onto just three of its ships in mid-July: Carnival Vista and Carnival Breeze are due to sail out of Galveston, Texas, and the Carnival Horizon will sail from Miami. The company is also trying to work out a solution that would allow its Carnival Miracle to depart from Seattle on an Alaska cruise. But the rest of its fleet will remain idle.
Image source: Getty Images.
Summer bluffing
By now, cruise fans know the drill. Carnival, Royal Caribbean (RCL 2.00%), and Norwegian Cruise Line (NCLH 0.81%) have spent the last 14 months pushing out monthly cancellations of scheduled future sailings. It's a drag for everybody involved. Would-be passengers have to reshuffle or cancel travel plans. Cruise lines either have to refund money or provide financial incentives to customers in order to hold on to it in exchange for future cruise credit. Shareholders brace for more dilution as the cruise lines raise more money through stock or debt.
The timing around this latest delay is particularly unfortunate. Cruises have historically been a popular year-round vacation option for retirees and other seasoned travelers, but now, the operators are trying to market them to younger potential customers. And families' windows for travel are largely open during the summer, spring break, or year-end holidays when kids are out of school.
Given that, August might seem like prime summer cruising season, but public school students in Galveston and Miami return to their classrooms for the new school year on Aug. 23. Obviously, cruise sailings aren't just for home port locals, but after more than a year of repeated cancellations, it will be hard for anyone else to take scheduled restart dates seriously until after Carnival, Royal Caribbean, and Norwegian Cruise Line have actually started bringing passengers aboard again.
When the U.S. Centers for Disease Control and Prevention relaxed its guidelines for a return to sailing late last month, it seemed as if things were falling into place for a mid-July restart. Now, we're seeing that the cruise industry is going to tiptoe into those waters, at least at first.
Losing large chunks of the summer will be rough on these businesses. The silver lining here is that if things go well in July and August, the industry will head into its slower autumn season ready for the return of a largely older crowd of passengers -- a demographic that has largely been vaccinated for COVID-19 at this point.
It has been clear for some time now that cruise lines would be the last segment of the travel and tourism sector to get back to business. After all the times that the restart dates for cruises have been pushed further out into the future, the industry will have a lot of convincing to do as it tries to woo vacationers -- both frequent cruisers and first-timers -- back to its ships. However, this could be the last wave of Carnival's COVID-19 cancellations. For now, that will have to be enough.
