COVID-19 and the Cruise Industry

I’ve speculated about it going over budget and falling behind schedule, but it never occurred to me that a virus — more specifically, a novel coronavirus called COVID-19 — would pose the biggest threat to the timely opening of the CBRM’s $20 million second cruise ship berth, but here we are.

As I see it, there are two main virus-related possibilities that could impact the cruise season in Sydney. One is that, in response to the recent, high-profile outbreaks on cruise ships, the Canadian government might stop them from docking in Canadian ports (a measure recently imposed by India and the UAE).

The Times Colonist is reporting that British Columbia’s public health officer is recommending this — at least for now:

“It is my belief that we should be delaying our cruise season until we are in a safer place internationally,” Dr. Bonnie Henry said in a teleconference on Monday.

While Henry acknowledged the move would affect businesses in Victoria and Vancouver, and the tourist industry, she said her primary concern is the health and safety of people in B.C.

“I have grave concerns about cruises right now.”

Henry said the feds would make a decision on whether to “curtail cruise-ship arrivals in Canada” after consultation with provincial health officials. She said the decision could come as early as next week.

MS Rotterdam of the Holland America Line docked in Sydney.

MS Rotterdam of the Holland America Line docked in Sydney.

 

On a note that will strike a chord with CBRM readers, the paper reports:

Uncertainty about the season comes after a $6.8-million infrastructure project wraps up at Ogden Point to accommodate vessels of about 1,148 feet. Victoria is expecting about 290 cruise ship visits this season, with about 770,000 passengers.

On a note that probably won’t strike a cord with CBRM readers, the paper goes on:

Jeff Bray, executive director of the Downtown Victoria Business Association, said if the season is scuttled, “it would have an impact but it wouldn’t be as significant as other regions or other cities in North America,” because other parts of the economy are strong.

CityNews in Vancouver, on the other hand, says Canadian officials, as yet, have no plans to block cruise ships from docking in Vancouver:

The Public Health Agency of Canada said it is keeping tabs on all cruise ships planned to come to the country starting next month, but isn’t yet calling for them to be barred from docking.

“As the situation evolves, many countries are implementing policies and restrictions to contain the outbreak,” a spokesperson said in an email. “The Government of Canada is also planning for all possible scenarios regarding cruise ships coming to Canadian ports in light of risks associated with COVID-19.”

Victoria expects its first cruise ship on April 2, the Grand Princess — the Carnival vessel that arrived in the Port of Oakland this week after 21 passengers were infected with COVID-19. Canada repatriated 228 Canadian passengers who are now in quarantine at CFB Trenton. CTV reports that “a limited amount” of Canadian crew who have tested positive for the virus remain onboard the vessel.

Grand Princess cruise ship

The Grand Princess cruise ship in happier times, 2007. (Photo by Teh tennisman / CC BY-SA  via Wikimedia Commons

 

Public Health

The second possibility is that people will follow the recommendations of the US State Department and the Public Health Agency of Canada which have both advised travelers — especially those with underlying conditions — not to take cruises due to the threat posed by COVID-19. Canada’s chief public health officer, Dr. Theresa Tam, said during an Ottawa press conference:

Today, the Public Health Agency of Canada is recommending that Canadians avoid all cruise ship travel due to COVID-19. The virus can spread quickly on cruise ships due to the close contact between passengers.

People cancelling or failing to book cruises would obviously have an effect on the season here  — especially American people, who accounted for 54.5% of the industry’s passengers in 2018 (that’s according to WaPo, which says Europeans accounted for 26% and Asians for 9%).

As I write, Holland America Line, the Port of Sydney’s most frequent guest, accounting for 41 (35%) of the 118 visits scheduled in 2020, is fielding so many cancellations, it’s taken to social media to ask for people’s patience:

 

(Papeete, I have just discovered, is in French Polynesia. The Maasdam really gets around.)

The CBC’s Brett Ruskin noted that cruise lines are offering to pay passengers not to cancel. Here’s the offer from the Princess site:

 

Fall-out

As Peter Ziobrowski, the man behind the Halifax Shipping News blog, noted, peak cruise season here is in the fall, so the loss of the spring visits, while it would be a blow, would not be fatal.

I did the math, based on the 2020 schedule on the Port of Sydney website, and of the 118 scheduled visits, 111 (94%) happen after 31 May and 76 (64%) happen after August 31.

Here’s a handy chart showing you the cruise lines, their parent companies and the number of visits scheduled for the Port of Sydney this season. You’ll note that what looks like a mixed bag is really basically three companies, which together account for a whopping 91% of all expected cruise visits, so any decisions any of them make will have a big impact on us.

The Washington Post reports that Carnival Corp shares closed at $21.74 on Monday, down from around $50 in early January. Royal Caribbean stock ended Monday at $48.27, down from $130 or more early this year while Norwegian Cruise Line shares dropped to $19.81 from $58.

Parent CompanyCruise LineVisits
Carnival CorporationHolland America Line41
Princess10
Seabourn1
Cunard2
P&O2
Royal Caribbean CruisesRoyal Caribbean13
Celebrity11
TUI2
Silversea3
Norwegian Cruise Lines HoldingNCL11
Oceania5
Regent6
Lindblad Expeditions HoldingsLinblad2
Phoenix Reisen (Travel Agency)Phoenix Reisen1
Fred Olsen GroupFred Olsen1
ArtemisPonant1
The Ritz-Carleton Hotel CompanyRitz-Carleton1
Mediterranean Shipping CompanyMSC4
Conti GroupConti Plantours1
Total118

 

 

Bailout?

Here in Canada, the CBC reports the government will announce measures to help people and businesses affected by the virus today, including “waiving the one-week waiting period for Employment Insurance benefits for people who have to self-isolate because of the outbreak.”

The broadcaster says it is the first part of a federal package designed to help workers forced to stay home from their jobs.

In the United States, President Donald Trump has announced his intention to provide assistance to the cruise lines as well as airlines and hotels (he owns hotels, after all). The Miami Herald reports that the White House has been in talks with the executives of the cruise lines it describes as “crippled” by the spread of the virus. But the paper says the government’s goal is improved safety onboard the vessels, not a bailout:

[A]sked whether the president would propose a bailout for the cruise lines — which are registered overseas and exempt from federal income taxes — [Vice President Mike] Pence declined to respond, while Larry Kudlow, director of the National Economic Council, shook his head.

Rep. Peter DeFazio, a Democrat from Oregon, was more direct, telling the Herald:

“They don’t pay taxes in the United States of America. If they want to reflag their ships … and they want to hire U.S. crews and pay U.S. wages and pay U.S. taxes, then maybe,” he said.

Could a virus make the cruise industry pay its taxes? I’m not holding my breath, but it’s a beautiful thing to contemplate.