COVID-19’s impact on the cruise industry is so far not affecting reservations for 2021, which are up 40 percent over 2019. Carnival, the world’s biggest cruise line, has enough liquidity for a year.
Although the coronavirus pandemic prompted the cruise industry to cancel trips through June 27, customers are looking ahead to 2021 and making reservations, said Arnold Donald, CEO of Carnival Cruises, according to a CNBC report on Tuesday (April 14).
“It’s been devastating temporarily. ... Travel is going to return, travel and leisure, and when it does, we’ll return with it. Social gathering at some point will return, and when it does, people will want to cruise,” Donald said. “We’ve had substantial bookings. Bookings for 2021 are strong.”
Donald added that the company, which is not included in the U.S. government’s coronavirus stimulus package, continues to seek additional financing from “Germany, the U.K., Italy and elsewhere.” Even without additional financing, he said the company has enough liquidity to last about a year with no revenue.
Carnival is in the best position of the three cruise lines to get through a downtick without a revenue stream, UBS Securities Analyst Robin Farley told CNBC. It could probably survive 15 months without making money, Farley said in a note last month.
According to figures from CruiseCompete.com, cruise bookings are up 40 percent for 2021 compared to 2019, company head Heidi Allison told the Los Angeles Times. Rescheduled canceled bookings due to the coronavirus account for 11 percent of the reservations for 2021.
“People are still booking cruises and are anxious to sail again when this is all over,” Allison said.
Carnival is the world’s biggest cruise line and has had several COVID-19 outbreaks onboard. The Diamond Princess outbreak, among the first outside of China, has been quarantined in Japan.
While there are very few industries that have not been affected by the COVID-19 outbreak in some way, travel as a vertical has been hit uniquely hard. International, domestic, business and leisure travel have all been suspended and many Americans had to cancel spring vacations.