Future of cruise industry Post COVID

It was a cruise ship that foretold the potential impact of the pandemic in early 2020. Now, in late 2021, cruise ships offer a taste of pre-Covid freedom and one version of post-Covid life.

One of the first Covid outbreaks that brought the virus to the world’s attention was aboard the Diamond Princess, a luxury cruise ship. One passenger brought the virus aboard, apparently after visiting an area where the virus was spreading. By the time the incident was over, more than 700 passengers and crew were infected - nearly a fifth of the ship’s population. As many as fourteen died. This was a full month before the potential impact of the virus became evident in the United States.

Today, the same closed environments that allowed periodic outbreaks of pathogens like norovirus on cruise ships have turned into safety bubbles.

Party Like It’s 2019

I’m writing this article aboard the Celebrity Equinox, one of the many cruise ships that have resumed operations from U.S. and other ports. Celebrity is a unit of Royal Caribbean [RCL]. The guest experience is refreshingly normal. No guests are masked. People sit next to each other without cringing. They queue up for their morning latte, and even squeeze into the occasional crowded elevator.

The guests I’ve spoken to remark on how safe they feel - the safest they have felt in public since the pandemic hit. They are relaxed, even in the close proximity of strangers.

What makes this possible is simple. To board the ship, one has to demonstrate proof of full vaccination and the results of a supervised Covid test taken within two days of boarding.

While even these precautions aren’t absolute protection against getting infected, they make the odds good enough to make the population aboard the ship - many of whom are likely above-average risk - to feel safe.

MORE FROMFORBES ADVISOR

Best Tax Software Of 2022

Best Tax Software For The Self-Employed Of 2022

Income Tax Calculator: Estimate Your Taxes

The clues that the world is still in the grips of a pandemic are few. All crew members wear masks. Self service at buffets has been replaced by staff service. Most doors in public spaces offer touch-free operation. Passenger count is lower. Arguably, these small changes enhance not only safety but overall shipboard experience.

The on-board experience is one possible post-Covid future: a world with universal vaccination that makes all other virus-related restrictions unnecessary. Few nations seem on track to achieve this goal.

Choose Your Customers

Undoubtedly, some Celebrity customers have been disappointed by the CDC-mandated vaccination and testing requirements. Without those requirements, though, many of the ship’s current passengers would never have boarded.

Princess, a Carnival [CCL] unit that competes with Celebrity, takes safety a step farther: for at least the next few months, guests will be required to wear masks in many public spaces. One couple I spoke to aboard the Equinox said they had planned a Princess cruise but switched because of the mask requirement. I’m certain, though, that other guests will choose Princess precisely because they feel it will be safer.

There is no “right” approach. Both brands will have regular customers who won’t cruise because of these policies. Each company has implemented a strategy that they think will optimize both safety and revenue.

Your Customer Isn’t “Everybody”

While most companies won’t have to live down the “plague ship” reputation and overcome the complete cessation of operations experienced by cruise lines. there’s a lesson in the way the companies are plotting their comeback.

First, they are directly addressing the safety concerns that might keep the majority of customers away. Some of these changes have surely been expensive.

More significantly, they are implementing policies that will attract the customer groups they want, even if those policies alienate some past and potential customers. Undoubtedly, these rules will change with time as guest expectations change. It also seems likely that different brands, even within the same company, will evolve different rules. A line aimed at younger passengers, for example, might have looser restrictions than one with mostly senior cruisers.

Though not permitted by current CDC rules, at some point a line could even offer “no restrictions” cruises to appeal to vaccine and mask-resistant customers. The majority of guests might balk, at least until the virus is under control, but there is likely pent-up demand for them.

Regardless of the industry, every brand needs to decide which customers it wants to serve and how to best serve them. If you try to appeal to everybody, you’ll likely appeal to nobody.

Before the onset of the COVID-19 pandemic, cruise holidays were the fastest-growing sector of the tourism industry. Major operators including TUI Cruises, MSC and Aida recorded solid earnings. But when the pandemic hit, the industry almost came to a complete standstill: Out of the 400 large cruise ships ordinarily operated by travel companies though the world, some 90% were docked.

Today, the industry has recovered somewhat, with two-thirds of vessels back at sea. TUI Cruises was one of the few companies to continue offering trips from July 2020 onwards. It says that currently, five out of seven of its flagship cruise ships are in operation. But planning ahead is difficult, as holidaymakers are now opting for last-minute bookings, says company spokeswoman Friederike Grönemeyer.

Strict hygiene measures in place

On a typical cruise, passengers and crew members remain aboard a luxury liner for days on end. Companies have implemented a raft of measures to minimize the risk of coronavirus contagion during such voyages. Holidaymakers and staff must take COVID-19 tests before embarking and during the trip, in accordance with Cruise Lines International Association (CLIA) guidelines. To further reduce the infection risk, buffets have been scrapped and masks have been made mandatory. The use of electronic key cards and smartphone apps, meanwhile, allows for guests to be tracked to better halt infection chains.

Despite these precautions, several cruises run by Aida, TUI-Cruises and MSC had to be canceled this year when passengers fell ill with COVID-19. Only a handful of infections were recorded, says spokeswoman Grönemeyer, who maintains that the hygiene measures put in place are proving effective. Even so, travelers wishing to embark on cruises will soon face even stricter rules. As of February 23, a booster certification will be necessary for anyone who received a second vaccine dose over 3 months ago.

Full steam ahead

Cruise lines have been severely hit by the global coronavirus outbreak. In Germany alone, passenger numbers plummeted from 3.7 million in 2019 to 1.4 in 2020. In 2021, the industry came to a near-standstill. All the while, companies face significant fixed costs for maintaining and repairing ships.

Although revenue and running costs have diverged drastically, many cruise lines and industry experts are optimistic about the future. "The [cruise line] industry will grow even more," Ulrich Reinhardt, professor at Germany's West Coast University of Applied Sciences, told DW. For many people, going on a cruise remains a "dream holiday," — and many passengers who go on such a trip once are likely to return for another, says Reinhardt.

Cruise industry boom could have advantages

Bernhard Jans, who has spent over 20 years as a consultant and quality manager in the cruise industry, believes the sector will grow even stronger after the pandemic. "The ship itself will become the main attraction, affording a holiday experience [in itself]; it will become something akin to a holiday resort with an amusement park feel to it," he told DW.

Today's cruise ships put on live shows, boast bars and clubs, offer sundecks and pools, alongside entertainment options for children and teens. Often, passengers will opt for all-inclusive deals that cover food and drink as well. While the notion of spending an entire holiday aboard a cruise ship has gained popularity, the pandemic is expected to accelerate this trend.

In the past, boat cruises were a luxurious novelty for the few. Over the last 20 years, however, they have become a readily available holiday option for the masses, says Bernhard Jans. Their focus has shifted from targeting intrepid explorers to offering a floating holiday resort experience.

Jans says the development should be welcomed, as fewer hotels and amusement parks need to be built all over the world. That way, he argues, plenty of "nature and natural habitats can be preserved." Tourists keen on seeing these places can come visit them on their own, without having to board a mighty cruise ship.

Many cruise lines, meanwhile, are working hard to shed their image as major polluters. The latest generation of ships are becoming ever more eco-friendly. Companies are buying vessels that have smaller and more efficient engines and are capable of properly filtering exhaust fumes and wastewater. It is also becoming more common for docked liners to use shore-side electricity instead of keeping their own diesel engine running.

Time for an eco-friendly rethink?

Cruise lines "should use this [pandemic-induced] lull to deal with sustainability and ecological issues, and take seriously criticism directed at the phenomenon of mass tourism," says Sven Gross, professor at Germany's Harz University of Applied Sciences. More and more Germans attach great importance to these issues in everyday life and when planning vacations, he told DW.

TUI Cruises spokeswoman Friederike Grönemeyer concurs. "We have noticed that over the past years, customers have been paying greater attention to these questions when booking cruises but also onboard in conversation with the captain." Her company has reacted by giving passengers the opportunity to help reduce their ecological footprint, says Grönemeyer. They can use water dispensors instead of minibars, and cut back on the use of fresh towels and bed linens.

While these are promising developments, Reinhardt doubts they will fundamentally change the nature of cruise holidays. "Vacations are an annual highlight; holidaymakers want to relax and get a break from their humdrum lives," he says. "That is why most vacationers switch off their [environmental] conscience." Most holidaymakers are only open to making eco-friendly concession "if this does not diminish their enjoyment or cost them extra money." Reinhardt says he expects real change will only come when cruise lines offer new, innovative holiday experiences.

"Environmental protection and sustainability are not on the minds of [ordinary] cruise ship passengers," says Bernhard Jans. These issues are typically important to those who are not interested in such cruises in the first place, he explains. Still, he reasons that cruise lines will benefit economically if vacationers are made to feel they can enjoy cruises "without having a guilty conscience."

What is the future of cruise industry?

Will cruise lines Recover in 2022?

Will the cruise industry rebound?