Cruise lines fear another lost summer

“I never thought I would be hours and hours on a food line,” said James Cox, a 50-year-old porter who used to earn $ 27 an hour fighting passengers and their luggage. “It simply came to our notice then. You say to yourself, “Wow, I’m really in this moment.” ”

Like the rest of the maritime tourism industry, Port Canaveral suffered problems against the onset of the coronavirus pandemic. A year later, as other parts of the economy come back to life, the U.S. cruise industry anxiously awaits Washington’s permission to sail again, and worries that a second summer season is about to take place. to get lost.

Other countries, such as Singapore, Italy, and the United Kingdom, have authorized cruises or set a clear target date for their navigation. According to the industry trade group, nearly 400,000 passengers have sailed since some countries began allowing cruises in July 2020.

But to get started in the United States, the cruise industry needs the direction of the Centers for Disease Control and Prevention.

The CDC lifted the no-sail order in October and replaced it with a set of conditional rules; industry officials say the 40-page rule is indecipherable or impractical, such as a measure that requires cruise lines to make “simulated trips” with volunteer passengers.

“I refer to this as an‘ impossible to navigate order ’because no company could operate profitably,” said Captain John Murray, CEO of Port Canaveral.

The CDC said the guide will arrive soon. “Future technical orders and instructions will address additional activities to help cruise lines prepare for and return to passenger operations in a manner that mitigates Covid-19 risk among passengers and crew members,” said spokesman Jason McDonald in a statement, who declined to comment further.

A White House spokesman did not respond to any requests for comment.

The order was written before the vaccines were approved and the CDC has not said whether it will review the guidelines for incorporating vaccinated crew and passengers.

Without CDC leadership, cruise lines cannot begin the process of months of implementing security measures and recovering thousands of workers around the world, industry officials said.

Washington’s hesitation may partly reflect the problems of the cruise industry at the start of the pandemic.

Cruise lines continued to sail despite known coronavirus risks, a Wall Street Journal investigation found. Ports refused entry to ships with sick Covid-19 passengers and giant ships stranded at sea.

As the launch of Covid-19 vaccines in the United States increases, President Biden predicts a return to the sense of normalcy for July. All theme parks, casinos, airlines and hotels operate with restrictions and security measures, and the cruise industry says it can do the same.

“I don’t like to speculate, but I think CDC looks at it and I feel like, ‘Is that a risk we really have to take?’ ”Said Brian Salerno, senior vice president of global maritime policy for the Cruise Lines International Association, the leading trade group in the cruise industry.

Competitors take advantage of the gap. Hong Kong-based Genting Cruise Lines said in a March 12 financial presentation that Crystal Serenity would begin sailing from the Bahamas in July, landing in the Americas, but skipping U.S. and CDC jurisdiction. A week later, Royal Caribbean Group said it would send its own cruise out of Nassau in June, similarly avoiding U.S. ports.

Cruises bound for Alaska face an additional hurdle. Most of these ships have a foreign flag, so they should stop in Canada, because U.S. law prohibits these ships from carrying passengers between U.S. ports. The problem: Canada has banned cruises until February 2022.

About 60 percent of all visitors to Alaska arrived on a cruise in 2019, according to an October Federal Maritime Commission report.

Alaska’s sensationalist Republican Dan Sullivan and Lisa Murkowski have called on the Canadian government to reconsider its ban and have introduced legislation that allows cruise ships bound for Alaska to avoid Canada. Either plan is CDC-based, allowing cruise resumption.

“The CDC: the best scientists in the world. What they are not designed to be is a tourism regulator in the United States. They are not good at it, “Sullivan said in an interview. Despite the agency’s almost daily outreach in his office, he said,” They have no answers. ”

The pandemic ended, at least temporarily, what was a growing industry. In 2019, about 14 million cruise ships departed from the United States, generating a record $ 55.5 billion for the U.S. economy and supporting more than 436,000 U.S. jobs, according to the U.S. cruise lines.

The “big 3” of the industry: worldwide operators of Carnival cruise lines Corp.

CCL 2.44%

, Royal Caribbean and Norwegian Cruise Line Holdings Ltd.

NCLH 2.59%

—He has had great financial successes

With revenues deeply depressed throughout 2020, companies made cash with huge bond and stock issues, according to industry analysts and corporate presentations. The big three have told investors they have enough money at hand to get to the 2022 cruise season.

They also have aggressively reduced expenses, salaried workers, and in some cases sold older, less efficient ships, which are less profitable to operate.

Even standing still is expensive. Carnival Corp. told investors in February it expected to burn an average of $ 600 million in cash a month just to keep ships afloat, maintain corporate operations and invest in preparations to return to the sea.

“There’s been an extraordinary amount of indebtedness over the last year that has happened in the industry,” said Melissa Long, director of Standard & Poor’s which covers the cruise industry.

The trading group and cruise lines spent $ 4.4 million on federal lobbyists last year, the industry’s largest investment since 2008, the start of the last recession, according to pressure records.

Carnival Corp CEO Arnold Donald told investors in January that the company and its rivals maintain “constant communication” with federal officials, including the CDC, about the reopening process.

Cruise-related companies, including ports, say they have tried to draw Washington’s attention to their situation over the past year, putting pressure on lawmakers and administration officials.

Unions representing port workers on both coasts say workers have lost hundreds of thousands of hours since the pandemic hit.

In Port Canaveral, Phil Charlton, who has worked in the industry since 1985, has worked part-time with his wife, Olivia, also a port employee. Bob Baugher, owner of hotels and transit buses in the area, said his businesses lost $ 16 million in revenue last year.

Nearly 5 million passengers passed through Port Canaveral in 2019, making it second only to Miami for cruise activity alone. Many U.S. ports are a mix of cruise and cargo, but here the cruise side usually accounts for about 80% of revenue.

Now, passenger-free ships enter the terminal a few times a month for supplies and maintenance. None of the skeletal crew is allowed on land. A recent March afternoon, the Disney DIS -0.59%

The fantasy sounded like some melancholy varieties of “When You Want a Star” as you passed Port Jana Park in Port Canaveral.

Mike Horan monitors cruise-related Facebook pages for any signs that he could soon revive his dying ferry business.

“This is our port,” he recently wrote on his Facebook page, sharing a photo of a docked ghost ship. “Cruise ships are now just decorations.”

Write to Julie Bykowicz at [email protected] and Ted Mann at [email protected]