The Cruise and Travel Industry is in a very bad place!

[sfaaa]

No quick turn around or quick fix I am afraid. COVID 19 damages are wide spread and enormous. I will take years to repair and undo.

[sverigecruiser]

1 hour ago, ColeThornton said:

 

I'm sure that's of little consolation to your Average Joe who owns no stocks and is unemployed because of the Covid.

 

In Sweden a strong stock market is good for everyone because most of our future pensions are invested there.

[Ashland]

Just now, sfaaa said:

No quick turn around or quick fix I am afraid. COVID 19 damages are wide spread and enormous. I will take years to repair and undo.

Yes you are correct...but we have to look forward now...build back better.

[navybankerteacher]

3 hours ago, drsel said:

regarding economic impact-- the stock markets all around the world are booming.

MOST OF THEM ARE CLOSE TO THEIR ALL-TIME HIGHS.

 

Which is increasingly becoming cause for concern.  The US economy, certainly, is largely based on consumer spending - which has to be facing a decline — and the virtual certainty of significant tax increases to cover the enormous expenditures already out the door and the further essential spending (now being temporarily delayed) which is sure to come —- will finally come to a boil.

 

Most recent booms have come to sudden, surprise endings - when the “irrational exuberance” finally wanes.  The real economic impact has not yet been considered.

[Flatbush Flyer]

5 hours ago, Hlitner said:

Call this a mild rant based on a realistic analysis.  Here we are in mid-October when many folks are now trying to plan travel/cruising for 2021!  Many here on CC (and elsewhere) assumed that things would start to get back to normal in early 2021 but now it looks like that is very far from reality.  In fact, things seem to be getting worse...not better.  As we predicted last March (in some CC posts) COVID is here to stay!  It is not going away, it is not morphing into something else, and all the mitigation efforts (shut downs, masks, social distancing, travel restrictions) have only had marginal impact (that issue will be argued for decades).  

 

Where does this leave the travel industry?   Without a safe effective vaccine and widespread immunizations things are not going to improve.  It now appears that if (a big IF) there is a safe/effective vaccine it will not be in widespread use until at least the 2nd quarter of 2021...and even this is being optimistic.  Forget the promises of a vaccine by Nov or even Dec because the truth is that things in the drug world do not move that fast despite our best efforts.  It takes time to work through the various side effects and efficacy formulas.  We are already seeing evidence (in various surveys) that any attempt to shortchange the normal (and thorough) procedures would simply result in a low percentage of the population not seeking the vaccine because they do not want to be a Guinea Pig.  Also keep in mind that if we do get a safe/effective virus the initial distribution will be aimed at health care workers, first responders, and those in high risk groups).  It will be months until any vaccine is available to the general population about half of whom have already said they would not even be willing to get a vaccine.  That means the virus will still be spreading around the world (albeit at a slower rate) and there will be pressure on the travel industry to somehow mandate vaccinations (which will also lead to controversy and resistance from the anti-vaccine crowd).

 

Where does this leave the cruise industry?  In big big trouble.  The various mitigation procedures are almost laughable for a virus that is generally spread via the air.  Social distancing has been used for thousands of years against epidemics and is pretty effective.  Stay away from everyone and you are likely going to be fine.  But you cannot possibly stay away from everyone when in travel mode dealing with airports, buses, taxis, terminal buildings, cruise ships, elevators, stairs, etc etc.  Wearing a N95 mask might be helpful but does nothing to keep the virus out of your eyes!  And the truth is that other then N95 and KN95 masks, the other things being used for masks do little to keep you from breathing in any virus that might be in the air. 

 

No matter how careful we are when we travel there is going to be some risk.  And with that risk will come the inevitable infections followed by the inevitable panic and overreactions.  And what has not been discussed much here on CC is that all the cruise line mitigation plans talk about reducing capacity which substantially reduces profits and likely means more loses.  In order to deal with these loses cruise lines will either need to increase the cost of everything or further reduce quality and services.   We doubt if there is going to be a huge demand for cruises where folks are treated almost as prisoners ("you will wear your mask,"  "you will only get off the ship if you book our overpriced tours,"  "you will not socialize,"  etc etc.  

 

And finally we think the nail in the coffin of cruising (in the near future) is going to be the very limited number of ports that will allow cruise ships in their waters.  Why should they welcome ships?  They generally do not contribute that much to the local economy (especially when cruise line excursions keep passengers out of local shops and restaurants) and will be seen as a possible spreader of more virus.   Yes there are some areas like South Florida where they are getting for the return of cruisers.  On the other hand, when ships tried to dock in South Florida with cases (or even suspected cases) of COVID the outcry from those same locals was deafening.  How soon we forget the debate among the Broward County officials.  Sure, now they want the ships to return...but that will quickly fall away to new whining when they get more cases of COVID.

 

What do you think?

 

Hank

As I've posted previously, the bottom line of the pandemic will be a major "course correction" for the cruise industry.

 

Given the demographics of the mass market, its budgetarily limited passenger population will cross cruising off their "must-do" list if their finances have tanked due to job loss. Increased  port restrictions on large ships will add yet another negative impact in terms of reliance on boring repetitive itineraries to that Walmart parking lot called the Caribbean. Filling 5,000 berths will become harder (once the initial allure of returning to cruising wears off and financial reality sets in), especially considering that cruisers who still have disposable income will "jump ship" and head to the premium/luxury segment where passenger load as well as space and crew ratios are more favorable in their smaller ships and better able to deal with Covid prevention.

 

Basically, the industry will have to "right size" itself, starting with reducing the inventory of megaships, for which I do see a future as low income housing in major coastal cities with high costs of living. For example, a megaship "conversion" permanently docked (at Hunter's Point) in housing-strapped San Francisco would be fully leased in a week.

 

What will then emerge is a focus on ships with less then 1000-1250 passengers that will be able to meet new existing port restrictions while adding ports that are tourist oriented but demanding of less "density" than was the case with multiple megaships descending on environmentally sensitive environments (e.g., Venice) in a pre-Covid era.

 

In turn, the big consortia like NCLH will disaggregate and, because they will have shed a sizable component of their mass market while retaining the premium/luxury ships, they will inherit more cruisers from among those who are able/ready to pay an even higher premium price.

 

In essence, the industry will backtrack to a far better era of civilized cruising.

 

Edited October 16, 2020 by Flatbush Flyer

[navybankerteacher]

2 minutes ago, Flatbush Flyer said:

As I've posted previously, the bottom line of the pandemic will be a major "course correction" for the cruise industry.

 

...

 

In essence, the industry will backtrack to a far better era of civilized cruising.

 

I think you have made a series of valid, cogent points - which I also feel will bring the wrath of many CC’ers down on your head.

[pc_load_letter]

47 minutes ago, Flatbush Flyer said:

 

 

Basically, the industry will have to "right size" itself, starting with reducing the inventory of megaships, for which I do see a future as low income housing in major coastal cities with high costs of living. For example, a megaship "conversion" permanently docked (at Hunter's Point) in housing-strapped San Francisco would be fully leased in a week.

 

 

 

What in ever loving god are you talking about?

[rkacruiser]

58 minutes ago, Flatbush Flyer said:

In essence, the industry will backtrack to a far better era of civilized cruising.

 

53 minutes ago, navybankerteacher said:

I think you have made a series of valid, cogent points

 

I have previously said on CC that the industry will need to re-invent itself.  Go back to the basics that made the initial cruise lines successful and that has led to the megaships/theme parks of today.  

[ldubs]

1 hour ago, Flatbush Flyer said:

 

 

. . . I do see a future as low income housing in major coastal cities with high costs of living. For example, a megaship "conversion" permanently docked (at Hunter's Point) in housing-strapped San Francisco would be fully leased in a week.

 

 

 

Please don't say this out loud.  Our state will spend several $millions on feasibility studies by consultants (most of who will be nieces or nephew of politicians) before deciding -- and then nothing will ever actually happen.  😄

[drsel]

With all due respect, I hope that Flatbush will be proven completely wrong in most, if not all the assumptions.

[drsel]

 
I'm amazed that the stock market has been so strong so far this year.
The value of my investments dropped almost 40% between February 20 and March 20. After that the value has almost doubled and so far this year I'm more than 30% up. Maybe not supergood but absolutely okay under the circumstances. ( I know why and I am thinking about selling everything because I'm not sure that it will last.) 

Not supergood ???
It's absolutely incredible and amazing under the circumstances!!!
I am happy for you!

[rkacruiser]

2 hours ago, sverigecruiser said:

I'm amazed that the stock market has been so strong so far this year.

 

The value of my investments dropped almost 40% between February 20 and March 20. After that the value has almost doubled and so far this year I'm more than 30% up. Maybe not supergood but absolutely okay under the circumstances

 

My opinion and my experience as well with my portfolio.  

 

The markets are being driven by a narrow range of industries/companies.  Consumer spending is what drives the American economy.  Unemployment is high; new claims are increasing again; what "stimulus" that Uncle Donald and his cohorts supplied is likely spent by now by those that really needed that money while it is reported in the media that there is much, much $$$$ that was appropriated and has not been used.  The Covid infection rates continue to rise which, in Europe, is causing a renewal of severe restrictions to commerce.  That's the future of the United States as well.  How will that impact consumer spending?  

 

The markets are not being rational.  They are part of the "show" that began on January 20, 2017.  

[drsel]

The markets are being driven by a narrow range of industries/companies. 
The markets are not being rational.  They are part of the "show" that began on January 20, 2017.  

What show began in Jan 2017?

[ldubs]

4 hours ago, dogs4fun said:

Agree - IMHO, the booming stock market mostly benefits the wealthiest (upper 10% of the population) among us. Sure, I see gains in my monthly statements but it is small consolation when considering the misery I see all around our country.

 

I also agree that many are not helped by a robust market.  But I don't agree that the market benefits only the upper 10%.  Far more than that benefit from a strong market.   But again, that doesn't help those who are struggling to put food on the table.   

[rkacruiser]

6 hours ago, Hlitner said:

And finally we think the nail in the coffin of cruising (in the near future) is going to be the very limited number of ports that will allow cruise ships in their waters.  Why should they welcome ships?  They generally do not contribute that much to the local economy (especially when cruise line excursions keep passengers out of local shops and restaurants) and will be seen as a possible spreader of more virus.   

 

While I hope that it will not be the cruise industry's "nail in the coffin", it is a serious thought that I have.  

 

Why should ports in New Zealand, Australia, Japan, including Europe and Canada, or wherever want United States visitors if they bring a risk of being carriers of Covid?  Such thinking would provide the end of long cruises for United States cruise guests.

 

Will ports in our own "backyard" want us?  Maybe not so much, but due to their own financial situations, they may want our $$.  If so, they may be willing to take "the risk" to their own population.  

 

But, how many times can one visit Nassau, Montego Bay, Cozumel, Freeport, Costa Maya, Cabo, etc. until one says:  enough!   

 

As I have advocated in previous posts:  laws, rules, regulations need to change to permit cruises to nowhere from the United States for those "addicted cruisers" to get their "fix" which would help the cruise lines to survive.  

 

 

[drsel]

 
 Far more than that benefit from a strong market.   But again, that doesn't help those who are struggling to put food on the table.   

I agree with you, but does it imply that the rich are getting richer and the poor getting poorer?

[ldubs]

3 hours ago, sverigecruiser said:

 

I'm amazed that the stock market has been so strong so far this year.

 

The value of my investments dropped almost 40% between February 20 and March 20. After that the value has almost doubled and so far this year I'm more than 30% up. Maybe not supergood but absolutely okay under the circumstances. ( I know why and I am thinking about selling everything because I'm not sure that it will last.) 

 

A large well known investment advice/mutual fund firm says the market is forward looking.  Additionally they talk of the driving force of some big tech companies (Amazon, Google, Apple, FB, etc).    Short term volatility sucks (especially if like this covid year).   If you look at the past 5 years or even longer, the upward trend of the market is maintained.   

[iancal]

It is going the wrong way.    The stock market numbers may be good but the covid numbers are getting worse as each day passes.  Despite the pathetic comments of those trying to gloss over and even to downplay this health crisis.

 

I believe that there will be some significant bankruptcies in the leisure and travel industry.  This is old hat for the airlines.  They will simply have to dust off their old play books.  Could be that one of the cruise line holding corps goes down to.  The industry will re-emerge to meet demand.

Edited October 17, 2020 by iancal

[ldubs]

1 minute ago, drsel said:

 

I agree with you, but does it imply that the rich are getting richer and the poor getting poorer?

 

Well, it is hard to really put anything in perspective with the hit we have taken because of the pandemic.  Right now the poorer of our society are hit especially hard because they can't afford to sit back and wait things out.  Consequently they are hit harder with the CV.   But in truth I am a capitalist at heart, believe in free markets, and that our system provides the best opportunity for folks to get ahead.   

[getting older slowly]

Just talking about the TRAVEL industry...... here in Australia,,, once all the state boarders open....  which is a question mark......

 

I fear a lot of the businesses  will have gone.........

 

Cruising which is nice.... is a long way down the list... compared to the local Travel and Hospitality. industry .. which some sectors will take years to come back....

 

So once one is allow to travel to the rural areas.... one is expecting a different world..

of business   down sized or changed to suit the locals...

not relying on tourist or traveller .....

 

So any Over Seas Travel.... is off the books..... for ages

 

As somebody said... the effects of this will outlast the virus...

 

Don  

[Flatbush Flyer]

42 minutes ago, ldubs said:

 

 

Please don't say this out loud.  Our state will spend several $millions on feasibility studies by consultants (most of who will be nieces or nephew of politicians) before deciding -- and then nothing will ever actually happen.  😄

Not a new idea. Years ago, SF Mayor Agnos liked the idea:

 https://www.google.com/amp/s/www.nbcnews.com/news/amp/ncna917301

[drsel]

 
A large well known investment advice/mutual fund firm says the market is forward looking.  Additionally they talk of the driving force of some big tech companies (Amazon, Google, Apple, FB, etc).    Short term volatility sucks (especially if like this covid year).   If you look at the past 5 years or even longer, the upward trend of the market is maintained.   

The market has to be in a long-term uptrend, because cash will keep on depreciating.
It's purchasing power will keep reducing.

But surprisingly, Cruise fares have been stagnant for decades, (at least upto Feb 2020 before Covid).

Which means that Cruises are really inexpensive now or were too expensive in the 70s and 80s.

[Flatbush Flyer]

1 hour ago, pc_load_letter said:

 

What in ever loving god are you talking about?

https://www.google.com/amp/s/www.nbcnews.com/news/amp/ncna917301

[ldubs]

5 minutes ago, Flatbush Flyer said:

Not a new idea. Years ago, SF Mayor Agnos liked the idea:

 https://www.google.com/amp/s/www.nbcnews.com/news/amp/ncna917301

 

I of course remember Agnos.  I don't remember this proposal when he was mayor, which would not be surprising because I would not have followed SF politics then (or now really).  Personally, I think it is a very bad idea.  

[drsel]

significant bankruptcies in the leisure and travel industry.  Could be that one of the cruise line holding corps goes down. The industry will re-emerge to meet demand.

You are right, Ian.

 

Cruise lines which shut down

1. Blount (USA)

2. FTI (Germany)

3. Birka (Sweden)

4. Pullmantur (Spain)

5. Cruise & Maritime (UK)

6. Jalesh (India)