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Issue 18 | february 2022, in this issue: the state of the industry, 2022 predictions, havila's new hybrid cruise ship, northern xplorer's new eco-friendly ship design, and more..

Future Cruise brings you the latest news and insights from the cruise industry in a stunning, interactive format. Published quarterly and free to read online and on iPads, this digital magazine takes a look at the latest cruise trends, ports and destinations, onboard entertainment and services, as well as ship design and construction, maintenance, safety and security, environmental issues and regulation.

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Carnival Corp. Has Two-Thirds of Business Booked for 2024

• December 23, 2023

“We now have nearly two-thirds of the business on the books for 2024 at considerably higher prices,” said Josh Weinstein, CEO, speaking on the company’s fourth quarter and year-end earnings call.

“At this point, much of the first half (of 2024) is already behind us. With approximately 85 percent of the business on the books, we’ve essentially closed the double-digit occupancy gap to historical levels on higher capacity and at higher prices,” he said.

For the important summer season, Weinstein said all major products were better booked at higher prices.

“Our yield management strategy, the baseload bookings has clearly set us up for another record year. And again, we have seen no sign of our business slowing,” continued Weinstein.

“The booked position for our North American brands remains as far out as we have ever seen and well ahead of last year, and pricing that is considerably higher. Our European brands just delivered record fourth quarter booking volume at considerably higher prices and with a booking window now fully back to historical norms.”

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The Cruise Industry Stages a Comeback

After watching thousands of passengers get ill and more than a year of devastating financial losses, the global cruise industry is coming back to life. And it says it knows how to deal with the coronavirus.

By Ceylan Yeginsu and Niraj Chokshi

Nothing quite demonstrated the horrors of the coronavirus contagion in the early stages of the pandemic like the major outbreaks onboard cruise ships , when vacation selfies and videos abruptly turned into grim journals of endless days spent confined to cabins as the virus raged through the behemoth vessels, eventually infecting thousands of people, and killing more than 100.

Passengers on the Diamond Princess and Grand Princess, two of the worst-hit ships, were forced to quarantine inside their small staterooms — some without windows — as infections on board spiraled out of control. Every day anxiety and fear mounted as the captains of the ships announced new cases, which continued to spread rapidly through ventilation systems and among crew members, who slept in shared quarters and worked tirelessly throughout the day to deliver food to guests.

At the time, it was difficult to imagine how the ships, which carry millions of passengers around the world each year, would be able to sail safely again. Even after the vaccination rollout gained momentum in the United States in April, allowing most travel sectors to restart operations, cruise ships remained docked in ports, costing the industry billions of dollars in losses each month.

Together, Carnival , the world’s largest cruise company, and the two other biggest cruise operators, Royal Caribbean and Norwegian Cruise Line , lost nearly $900 million each month during the pandemic, according to Moody’s, the credit rating agency. The industry carried 80 percent fewer passengers last year compared to 2019, according to the Cruise Lines International Association, a trade group. Third-quarter revenues for Carnival showed a year-to-year decline of 99.5 percent — to $31 million in 2020, down from $6.5 billion in 2019.

And yet in June, Richard D. Fain, chairman and chief executive of Royal Caribbean Cruises, was beaming with excitement as he sat sipping his morning coffee onboard Celebrity Edge, which became the first major cruise ship to restart U.S. operations, with a sailing out of Fort Lauderdale, Fla. “At the beginning we didn’t have testing capabilities, treatments, vaccines or a real understanding of how the virus spread, so we were forced to shut down because we didn’t know how to prevent it,” he said.

Several epidemiologists questioned whether cruise ships, with their high capacities, close quarters and forced physical proximity, could restart during the pandemic, or whether they would be able to win back the trust of travelers traumatized from the initial outbreaks.

Now, said Mr. Fain, the opposite has proved true. “The ship environment is no longer a disadvantage, it’s an advantage because unlike anywhere else, we are able to control our environment, which eliminates the risks of a big outbreak.”

Cruise companies restarted operations in Europe and Asia late last year, and, after months of preparations to meet stringent health and safety guidelines set by the Centers for Disease Control and Prevention, cruise lines have started to welcome back passengers for U.S. sailings, where demand is outweighing supply, with many itineraries fully booked throughout the summer.

Carnival said bookings for upcoming cruises soared by 45 percent during March, April and May as compared to the three previous months, while Royal Caribbean recently announced that all sailings from Florida in July and August are fully booked.

Several coronavirus cases have been identified on cruise ships since U.S. operations restarted in June, including six passengers who tested positive on Royal Caribbean’s Adventure of the Seas recently, testing the cruise lines’ new Covid-19 protocols, which include isolating, contact tracing and testing passengers to prevent the virus from spreading. Most ships were able to complete their itineraries without issues, but American Cruise Lines, a small ship company, cut short an Alaska sailing earlier this month after three people tested positive for the virus.

The industry’s turnaround is far from guaranteed. The highly contagious Delta variant, which is causing surges of the virus around the world, could stymie the industry’s recovery, especially if large outbreaks occur on board. But analysts are generally optimistic about its prospects and the potential for passenger numbers to recover to prepandemic levels, perhaps as soon as next year. That optimism is fueled by what may be the industry’s best asset: an unshakably loyal customer base.

Even during the pandemic, huge numbers of people who had booked opted against taking refunds , instead converting payments already made into credit for future travel, which the companies often offered at a higher value as an incentive. Last fall, Carnival reported that about 45 percent of customers with canceled trips had opted for credit instead of cash back. About half of customers in a similar position with Royal Caribbean Cruises did the same by the end of last year, the company said at the time.

“The demand is there,” said Jaime Katz, an analyst with Morningstar. “You know that there have been 15 months of people who have had cruises booked that have been canceled.”

No U.S. bailout for the cruise companies

By April 2020, the industry was in crisis. Cruises were halted around the world after the alarming outbreaks on ships, leading to sailing bans from the C.D.C. and other global authorities.

While they employ many Americans, the major cruise companies are all incorporated abroad and were ultimately left out of the $2 trillion federal stimulus known as the CARES Act, with lawmakers chafing at the prospect of bailing out foreign corporations largely exempt from income taxes. Environmentalists lobbied against the aid, citing the industry’s poor track record on climate issues. And criticism over how the companies handled early virus outbreaks on board ships sapped any remaining political will to help. Huge losses mounted as questions swirled about whether cruise lines could avoid bankruptcy.

“All our conversations here were, ‘At this cash burn rate for each of these companies, how long can they survive?’” said Pete Trombetta, an analyst focused on lodging and cruises at Moody’s.

Cruise lines were forced to send most cruise workers home, keeping small skeleton crews on board to maintain their ships. After months without work or an income, many of the workers, who are frequently drawn from countries like the Philippines, Bangladesh and India, fell into debt and struggled to provide for their families.

The timing couldn’t have been worse for Virgin Voyages , the new cruise company founded by the British billionaire Richard Branson, which had planned to launch its inaugural ship, Scarlet Lady, with a sailing from Miami in March 2020. The ship’s official U.S. debut has been delayed until October, but a series of short sailings will take place in August out of Portsmouth, England, for British residents.

“It’s been a very difficult 15 months and we had to make some very tough cuts along the way like the rest of the industry,” said Tom McAlpin, president and chief officer of Virgin Voyages.

In the end, most cruise companies made it through the pandemic intact, but only after receiving help. That came in the form of assistance from governments abroad or money raised from investors emboldened by efforts to backstop the economy from the Federal Reserve and others. The cash wasn’t cheap, though. When Carnival Corp. sold $4 billion in bonds in April 2020, it agreed to interest on those bonds of 11.5 percent — more than half of which it recently refinanced at a more reasonable rate of 4 percent.

Carnival, which operates under nine brands globally, has lost more than $13 billion since the pandemic began and said in a securities filing last month that it expects those losses to continue at least through August. The company amassed more than $9 billion in cash and short-term investments as of the end of May — enough, it said last month, to pay its obligations for at least another year. It says it expects to have at least 42 ships carrying passengers by the end of November, representing just over half of its global fleet.

The industry faces a long road back to normal. Moodys downgraded ratings for each of the big three cruise companies during the pandemic and says it will probably take until 2023 for the major cruise operators to start substantially reducing their debt, which had nearly doubled during the pandemic.

The companies have also been caught up in a series of legal battles in Florida, the biggest base of operations in the United States, that has them sometimes allied with the administration of Gov. Ron DeSantis, and sometimes opposing it.

In June, Florida sued the C.D.C., saying the agency’s guidelines for how cruising could restart were burdensome and harmed the multi-billion-dollar industry that provides about 159,000 jobs for the state. The C.D.C. guidelines require 98 percent of crew and 95 percent of passengers to be fully vaccinated before a cruise ship can set sail, otherwise the cruise company must carry out test voyages and wait for approval.

So far, the state has prevailed in the courts, with a ruling from a federal judge that prevented the C.D.C.’s vaccine requirements from going into effect after July 18. A federal appeals court upheld that ruling on July 23.

Despite the court’s decision, Cruise Lines International Association, the trade group, said cruise companies will continue to operate in accordance with the C.D.C. requirements. The cruise lines found the C.D.C.’s initial guidance too onerous, but once the agency made revisions to factor in the U.S. immunization program, the companies agreed to comply and said they preferred passengers to be vaccinated, because it simplifies the onboard experience.

As that suit was making its way through the courts, Norwegian filed suit on July 13 against the state of Florida, saying that a law banning business from requiring proof of immunization from people seeking to use their services prevented the company from “safely and soundly resuming passenger cruise operations.”

There has yet to be a ruling in the case.

Hurdles remain

Several other hurdles could also derail the rebound of the industry. While cruising has resumed, operators still have to contend with a patchwork of domestic and international rules, some of which impose strict conditions on passengers who go on shore excursions. A serious and widespread outbreak aboard a ship, or a broader communitywide surge in virus infections, could drive away potential customers and stall the momentum of the cruise comeback.

But despite the delays and potential for further disruptions, Virgin Voyages is hopeful for a successful launch of its new brand. Virgin’s Scarlet Lady adult-only ship, which was inspired by a superyacht design, aims to attract a hip and younger crowd, offering 20 different buffet-free dining options and a range of entertainment, including D.J. sets and immersive experiences.

“We have a fantastic set of investors behind us, and I think we are well positioned to make a big comeback because people are ready to travel and cruise again and we are launching a very attractive new onboard product right in the middle of it all,” Mr. McAlpin said.

Two new cruise ships, Carnival’s Mardi Gras and Royal Caribbean’s Odyssey of the Seas are set to launch in the U.S. this week.

And cruise workers, many of whom burned through savings and went into debt during their enforced layoff, are thrilled to be back. “I can’t believe the day has come when I have been called back to work,” said Alvin Villorente, a wine steward for Norwegian Cruise Line, who spent the last year at home in the Philippines, carrying out odd jobs to pay his bills.

“It felt too good to be true,” he continued. “I made my wife read the email to make sure I understood correctly and when I saw her smile everything suddenly went from black to bright colors. I could look after my family again.”

At a time when airports are busy and chaotic and hotels and holiday rentals are expensive and booked up, cruise companies hope to appeal to people who wouldn’t normally consider a cruise vacation.

“I’m still on the fence about booking any travel because of the constantly changing rules around the world, but an adult-only cruise with some friends could be fun, especially if it meant not having to fly anywhere,” said Crystal Marks, a 37-year-old personal trainer from Miami who went on a cruise once as a child and has been looking at Virgin sailings for early next year after a friend sent her a promotional video.

“Yoga classes at sunrise, fitness throughout the day, city-style restaurants, spa treatments, it sounds pretty perfect to me,” she added with a laugh. “If everyone on board is vaccinated and tested regularly it’s probably one of the safer options for international travel.”

Follow New York Times Travel on Instagram , Twitter and Facebook . And sign up for our weekly Travel Dispatch newsletter to receive expert tips on traveling smarter and inspiration for your next vacation. Dreaming up a future getaway or just armchair traveling? Check out our 52 Places list for 2021 .

Ceylan Yeginsu is a London-based reporter. She joined The Times in 2013, and was previously a correspondent in Turkey covering politics, the migrant crisis, the Kurdish conflict, and the rise of Islamic State extremism in Syria and the region. More about Ceylan Yeginsu

Niraj Chokshi covers the business of transportation, with a focus on autonomous vehicles, airlines and logistics. More about Niraj Chokshi

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TERMS PRIVACY

The Cruise Industry Is Back—and Breaking Pre-Pandemic Travel Records

A s people around the world followed the early spread of COVID-19 on a Diamond Princess cruise ship quarantined off Yokohama, Japan in February 2020, the cruise industry began to spiral. ”Up until COVID hit, they were having record numbers of sales,” Richard Simms, staff writer for Cruise Radio, says of the cruise lines. But then, “for a while, they became the unattractive face of COVID.”

The pandemic sent the cruise industry into a 15-month shutdown. But it has gradually recovered in the time since—now ships are fully back in business, with new protocols in place. The Cruise Lines International Association forecasts that the number of passengers this year will surpass 2019 numbers—with an anticipated 31.5 million passengers embarking on cruises in 2023.

For a time, protocols included working with the U.S. Centers for Disease Control to come up with industry-wide standards, such as vaccination requirements and testing. But last summer, the CDC ended their COVID-19 program for cruise ships, leaving individual cruise liners to determine their own protocols around mitigating cases.

However, cruises are still required to report outbreaks to the CDC, as they do with norovirus—which has come to be associated with cruise ships due to health officials tracking the virus’ spread on ships. Major cruise lines, including Royal Caribbean, Carnival, and Princess, have dropped their vaccine requirements for most cruises, with a few exceptions (such as some Carnival cruises longer than 16 days, and some cruises departing from Australia).

Aside from that, dining rooms are more spaced out, and people are less likely to squeeze into an elevator, but overall, “it really feels back to normal on board,” says Simms.

For those still hesitant, Simms notes that many lines are investing in a “ship within a ship” concept, like “The Haven” from Norwegian , where travelers can pay a premium for more secluded amenities like a pool, bar, and dining area. “Those were always popular before the pandemic, but I think they might be even more popular now because you’re removed from the rest of the ship,” he says. “You’re in an area where you have limited contact unless you choose to go outside of it. You feel an extra bubble of protection.”

Simms says cruise lines have returned all ships to service, and many have plans to expand to attract younger customers and first-time cruisers. “A good sign for the future of the industry is how many new ships are in the works,” says Simms. “The industry knows it can recover.”

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With CDC Warning Dropped, Charleston Cruise Industry Sets Sail Toward Recovery

On Jan. 13, when the Carnival Sunshine accepted its first passengers in nearly two years from Port of Charleston, assembled crew members applauded and banged mini-tambourines to greet guests as they stepped on board. For the Charleston-based cruise ship, it was the beginning of a sailing to the Bahamas. For the city’s cruise industry, it was the start of a journey back toward normal — for a few more years, at least.

The cruise industry worldwide was thrust into chaos at the start of the Covid-19 pandemic in 2020, when outbreaks aboard cruise ships often left passengers stranded for days or even weeks. In March of 2020, the Centers for Disease Control issued a “no sail” order for cruise ships due to the risks of Covid-19 transmission. 

The order halted what to that point had been an exceptional start to the year for cruises at Port of Charleston, which between January and March of 2020 welcomed 64,403 passengers — over 15,000 more than during that same span in 2019, according to the S.C. Ports Authority.

Charleston’s robust early 2020 passenger numbers were consistent with what much of the industry was experiencing at that time, according to Andrew Coggins, a business professor and cruise analyst at Pace University in New York. “They were looking at a banner year, or a really good year,” he said. “And then the bottom fell out.”

Since then, cruise ships in Charleston and elsewhere have been forced to navigate a number of obstacles as they attempt to ramp operations back up — not just the “no sail” order that was gradually phased out in late 2021 and early 2022, but also consumer hesitancy, initial capacity limits, and a CDC advisory warning Americans against going on cruises. The CDC dropped that advisory on March 31, pivoting toward travelers making “their own risk assessment when choosing to travel on a cruise ship,” the agency announced in a statement.

But in late May, vacationers looking to cruise out of Charleston were dealt another setback, this one initiated by S.C. Ports itself. 

The agency declined to renew a contract with Carnival that runs through 2024, after which the Sunshine will leave the Lowcountry permanently, and Charleston will host only occasional cruise ships as S.C. Ports opens much of its cruise pier to private redevelopment.

The decision, first reported by The Post and Courier of Charleston, “will provide more space for the redevelopment of Union Pier Terminal, unlocking a transformational opportunity within the city of Charleston,” S.C. Ports said in a statement. “South Carolina Ports will continue welcoming port-of-calls in Charleston and adhering to the voluntary cruise management plan.”

A surge of pent-up demand

For 2022, at least, the potential for a big cruise year certainly exists in Charleston — the port’s master cruise ship schedule lists 104 total calls, the vast majority of them by the Carnival Sunshine, which sails from Charleston to the Bahamas and the Caribbean.

In 2019, Charleston received 93 calls carrying 262,580 total passengers, according to S.C. Ports. Through March 31 of 2022, the port had welcomed 24 ships and 43,598 passengers — that latter figure not far off the 49,362 passengers Charleston saw over the first three months of 2019, the last full year of cruising before Covid put the industry on pause.

The removal of that CDC advisory is likely to boost passenger counts at ports across the country, said Jeff Zotara, chief marketing officer at Arrivia, which provides booking and reward services within the travel industry. “I think the CDC guidance and the relief of some of those restrictions definitely has helped propel more cruisers who are potentially on the fence and just waiting to make that decision,” he said. “It’s helping to push them a bit further along in the process.”

The industry as a whole is “in recovery,” Coggins said. “From everything I’ve seen, it’s not exactly back where it was pre-Covid, or going into 2020. But there is a lot of pent-up demand, especially in the U.S., because people couldn’t take cruises during the first year of Covid. And so that is starting to come back.”

That pent-up demand is being experienced firsthand by reservation agents. In another hopeful sign for the Charleston cruise industry, Carnival announced that the period between March 28 and April 3 was the busiest booking week in the company’s history, exceeding the previous seven-day record by double digits. 

It was a similar story for Royal Caribbean, whose ship Enchantment of the Seas is scheduled to make 14 calls on Charleston in 2022: the week between March 26 and April 1 was the company’s highest-volume booking week ever, and included a single-day record for reservations.

“What we’re seeing, especially in the month of April, is that we’re far exceeding 2019 levels as far as demand for cruises,” Zotara said. “We represent about 400 brands across the industry, and nearly every one of them is above their 2019 level. So the research even before the CDC’s announcement was showing that people are indeed ready and excited to book future cruises.”

Arrivia between Nov. 3 and Jan. 10 surveyed 1,500 Americans about their attitudes toward cruising, and reported that 80 percent of respondents were planning or considering booking a cruise sometime in the next two years. Of those surveyed, 49 percent listed the Caribbean as their intended destination, and 17 percent listed the Bahamas.

The Carnival Sunshine’s routes from Charleston include stops in the Bahamas, Saint Maarten, Puerto Rico, and the Turks and Caicos.

“The Caribbean has been a favorite cruise destination for more than 50 years,” Zotara said. “First and foremost, it's easily accessible for most Americans and Canadians. And especially with a worldwide pandemic still in place, they're looking for a closer-to-home type of destination to travel from. And getting to Florida or Charleston is fairly easy for most people, so going to the Caribbean is nearer to their home base.”

Casual cruisers versus diehards

Early January brought an unwelcome reminder to the worldwide cruise industry when a European ship carrying over 2,800 passengers was forced to sit at a dock in Portugal for five days due to an onboard coronavirus outbreak. As of late April, the CDC’s cruise ship dashboard listed 57 vessels in the “orange” category, signifying that the reported number of Covid cases has met the threshold for CDC investigation. Carnival Sunshine, which according to the CDC is a “highly vaccinated” ship — meaning 95 percent of passengers are fully vaccinated — is in the “yellow” category, in which Covid cases are below the threshold for investigation.

Since cruise operations restarted in Charleston in late December 2021, S.C. Ports has worked with cruise operators and the S.C. Department of Health and Environmental Control to align with all CDC requirements and cruise line protocols, a spokesperson said. Although Carnival dropped its mask requirement on March 1, the cruise line continues to mandate vaccinations (including boosters, if applicable) with the exception of children under 5, and teens and adults with a medical condition who can provide written confirmation from their medical provider that they cannot be vaccinated for medical reasons.

The majority of those queried in the Arrivia survey wanted some degree of Covid safety measures implemented aboard their ship. The survey also found that safety concerns had prevented 33 percent of consumers from booking a cruise in the past 12 months — with those worries likely comprising the dividing line between casual cruisers willing to wait for the virus to ebb, and diehards champing at the bit to get back on a boat. It’s that former group that now seems to be returning to the industry with the CDC’s advisory no longer in place.

“Those who wanted to cruise but were hesitant because they thought it was dangerous from a Covid perspective, the dropping of the CDC warning gives them more confidence,” Coggins said. “The cruise industry, once it started operating again, took a lot of measures to mitigate spread on board ships. They required testing, they required vaccines, they improved their ventilation systems, they changed procedures to minimize touch, especially in food service. Before where passengers could go up to the buffet line on their own, now their plate is either delivered to the table or given to the passenger by a crew member at the end of the food line.”

Coggins expects some of those protocols, especially enhanced ventilation systems, to remain intact even once Covid moves into an endemic state. 

“We don't know when the next pandemic is going to come along,” he added. “And the last thing the cruise industry wants is another pandemic that shuts the industry down.”

Charleston a strong drive market

The red, white, and blue fantail of the Carnival Sunshine has again become a familiar sight at Port of Charleston, where the vessel returns every few days. The Enchantment of the Seas is scheduled to visit eight times in the spring, and six times in the fall. 

The Ocean Voyager and Ocean Navigator of the American Queen line, the Seven Seas Navigator of Regent Seven Seas Cruises, the Summit of Celebrity Cruises, the Endeavor of Crystal Cruises, the Quest of Seabourn Cruise Line and the Mein Schiff 1 of TUI Cruises are all slated to call on Charleston in 2022, according to S.C. Ports.

That level of vessel traffic certainly makes things feel back to normal at Charleston’s cruise terminal. As far as passenger counts go, Coggins estimates that it might be 2023 before the industry once again reaches the booming levels at which it was operating in the first few months of 2020. The current surge of pent-up demand, though, is offering the industry a needed lift — especially since it’s being felt across the country, no matter the port.

“What we’re seeing is, it doesn’t really matter whether it’s Charleston, or Port Canaveral, or Miami, or Seattle. We’re seeing levels much higher than 2019,” Zotara said. “The biggest challenge in our industry right now is not convincing people to cruise, it's finding people to book those cruises for them. We continue to add hundreds and hundreds of cruise agents, and we cannot find cruise agents fast enough to keep up with demand.”

Charleston, Coggins said, maintains a strong drive market, with lots of potential cruise customers within a few hours’ travel time of the Holy City. But when the Carnival Sunshine departs in 2024, much of the city’s cruise industry will go with it. S.C. Ports’ 2022 cruise calendar shows just 31 ports of call outside of the Sunshine — a glimpse at what Charleston’s cruise industry may look like beginning in 2025. 

“Since 2010, Carnival has been a great business partner and worked alongside our maritime community to benefit our overall maritime commerce mission,” S.C. Ports said in a statement. “As we look to the future, S.C. Ports will continue to evaluate the market and looks forward to continued partnerships and opportunities.”

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