The U.S. cruise industry — and most cruises around the world — shut down from roughly March 2020 through July 2021.
Even when Royal Caribbean (RCL), Carnival Cruise Line (CCL), Norwegian Cruise Line (NCLH), and even Walt Disney's (DIS) cruise line resumed operations, they did so with a lot of restrictions.
Ships sailed at limited capacities and customers had to not only prove vaccination but wear a mask in a variety of situations.
Some activities still have not come back, including laser tag, Royal Caribbean's Quest adult scavenger hunt, and really anything where close contact can't be avoided, and some passengers have chosen to stay away.
All three major cruise lines have lost billions and those losses did not stop in July.
Yes, ships got back to sailing with passengers, but demand has been low and prices have been depressed. Now, however, some of the seas have gotten smoother for the major cruise lines.
The Centers for Disease Control (CDC) has dropped its conditional sailing order (CSO) that defined the rules under which ships could sail. Now, Royal Caribbean, Carnival, Norwegian and Disney have opted into the federal agency's new voluntary program.
That allows ships to sail with 95% fully vaccinated passengers and drops the mask requirement for vaccinated people.
Those changes may seem small, but they will return cruising to looking a lot more like what id did before the pandemic. That has given Norwegian CEO Frank Del Rio optimism for not just his company, but the entire industry.
Image source: Shutterstock
Can the Cruise Industry Make a Quick Comeback?
Del Rio expressed confidence during a quarterly call with investors that his company, and the industry in general, should experience a return to normal.
“I believe that 2023, based on the numbers that I have on the books right now, both load factor and pricing, and further based on the assumption that we will not see another major delta or omicron-type surge, 2023 can get the industry and certainly our company back to pre-pandemic levels,” Del Rio said, Cruzely reported.
He was careful, however, to acknowledge that the pandemic has not ended and more misery could happen.
“At this stage, and again, not because I think … I’m giving you what the numbers are showing, 2023 could be, assuming that no other major variants arrives on the scene, could be a fabulous year. [It] could be a record year,” Del Rio said.
Royal Caribbean's CEO Shares Confidence
Del Rio is not alone in his thinking. His counterparts at Royal Caribbean and Carnival have expressed similar optimism.
"While omicron created some short-term challenges and will likely delay our return to profitability by a few months, our recovery trajectory remains intact," said Royal Caribbean CEO Jason Liberty during his company's fourth-quarter earnings call.
"We remain confident that we will have a strong spring and summer season with great demand for cruising, both domestically and internationally."
He said he also believes that consumer attitudes are changing, which should lead to a major improvement in business.
"The robust secular trends of experiences over things that has propelled our business in the past few years is now recovering toward pre-Covid levels," he said.
"We have also seen a change in the mindset of consumers coming out of the pandemic with the desire to travel and reengage with the world being stronger than ever. In fact, the U.S. traveler organization research confirms that leisure travel will continue to increase at higher levels than business travel."
Liberty said he expects his company to be profitable in 2022.
"After a storied 2020 and 2021, we are eager to move forward in this new year. As people are keen on taking a vacation, we are ready to make their vacation dreams come true in a healthy and safe environment," he said.
"We expect 2022 will be a strong transitional year as we bring the rest of our fleet into operations and approach historical occupancy levels."
Carnival has not yet reported earnings for the current quarter.
