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The Sunshine Economy

When Will Cruise Ships Sail Again In The Sunshine Economy? 'Sooner Than Many People May Think' Says Royal Caribbean Int'l CEO

Symphony of the Seas
Wilfredo Lee
/
AP
In this Wednesday, May 20, 2020, file photo, Royal Caribbean International's Symphony of the Seas cruise ship is shown docked at PortMiami, in Miami. Florida is threatening to sue the federal government if it doesn't lift its pandemic ban on cruise lines using U.S. ports. Gov. Ron DeSantis and state Attorney General Ashley Moody said Friday, March 26, 2021, that the state is being harmed economically by the industry's U.S. shutdown. (AP Photo/Wilfredo Lee, File)

It has been more than a year since a cruise ship sailed from the U.S. with paying passengers. So when does Royal Caribbean International hope to be able to shove off from South Florida ports?

Airline middle seats are available. Hotels are taking reservations. Restaurants and nightclubs have reopened. But cruise ships in U.S. waters remain empty of passengers.

Cruise lines were the first and remain the last major industry that is restricted from doing business because of COVID-19.

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Cruise ship operators first volunteered to stop sailing March 13, 2020, and the Centers for Disease Control stepped in one day later and banned cruise ships from sailing from U.S. ports. The ships have remained empty since. That’s 400 days and counting of empty staterooms, quiet pool decks, and no excursions.

The cruise industry was an early source of the pandemic. In mid-February of last year, the largest COVID-19 outbreak outside of China was on the Diamond Princess ship anchored off Yokohama, Japan after a cruise. Almost one in five people on board wound up infected with the virus, and 13 people died. The Grand Princess was quarantined off the coast of California in March 2020 before docking in Oakland and passengers and crew remained in quarantine for two weeks.

The CDC found over six weeks in February and March 2020 about 200 COVID-19 cases were from cruise ship travelers returning to the U.S. That was almost 20 percent of reported cases in the country at that time. Then the agency stopped the sailing.

That ban lasted for eight months.

Then, in late October, the CDC issued a Framework for Conditional Sailing Order laying out what it called "a phased approach to resuming cruise ship passenger operations in U.S. waters." The rules include testing of crew and passengers, agreements with local health care facilities, quarantine plans and other safety protocols.

But six months later, no cruise ship has sailed from a U.S. port with paying passengers.

This week two years ago, 19 cruises were scheduled at PortMiami. Another 13 were scheduled in and out of Port Everglades in Fort Lauderdale. Passengers and crew on board all these cruises could have numbered into the tens of thousands.

South Florida was home to two of the busiest cruise passenger ports before the pandemic, and expects the business to return when ships set sail again.

Royal Caribbean Intl CEO Michael Bayley_11102016_.jpeg
Tom Hudson
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Royal Caribbean International CEO Michael Bayley onboard the Harmony of the Seas while at Port Everglades on Nov. 10, 2016.

The multi-billion dollar question is when.

"I think that day is going to be sooner than many people may think," said Royal Caribbean International CEO Michael Bayley. "I think that day is going to be this summer."

Royal Caribbean International and others are sailing – just not from American ports. The operator has canceled its U.S.-based cruises through the end of June, and has scheduled a trip from the Bahamas in late June.

Bayley described the effort to set sail again "a forever moving landscape." In addition to the Bahamas-launched cruises beginning in June, RCI has announced cruises out of Israel, Bermuda, Cyprus and Southampton, UK.

"I think the United States has done a really amazing job in rolling out the vaccines. Over 80 percent of Royal Caribbean customers have told us they've either already become vaccinated or they're planning on getting vaccinated," said Bayley. "I think that's probably one of the key points of optimism."

Bayley doesn't think the cruise ship industry has been singled out by health regulators, but he points to international airport travelers into the U.S. as an example of "this juxtaposition" of travel rules.

The cruise business went months of no specific guidance about how to return to sailing from American ports. Royal Caribbean and Norwegian Cruise Line Holdings spearheaded the industry's Healthy Sail Panel, which included a former directors from the Food and Drug Administration and CDC. The group released its recommendations in September. "We've carried over 100,000 guests on our ships since the late summer last year, and we've managed the situation as it relates to COVID-19 exceptionally well using the protocols from the Healthy Sail Panel," said Bayley.

He said RCI has testing capabilities on its ships, one of the provisions of the CDC's conditional order. The company's fleet is" status green" under the CDC's weekly color-coding system to operate in U.S. waters. A prerequisite of that green status is sharing at least a month's worth of surveillance data with the health agency.

A week ago, cruise industry leaders met with the White House COVID response team in the effort to re-start cruising from American ports. South Florida-based cruise operators were part of that meeting. It was the latest in several efforts – some collaborative, others confrontational – to have cruises set sail from U.S. waters. They include Florida’s two U.S. senators filing a bill that would cancel the CDC's Conditional Sail Order order and push to get the industry cruising again by July 4. And Gov. Ron DeSantis has sued the CDC over its phased approach to allow passengers to return to cruise ships.

A few days before filing that lawsuit, the governor issued an executive order banning businesses from requiring vaccine passports or any vaccine certification from customers.

At least two cruise lines have said they will require adult passengers and crew to be vaccinated, but those cruises are not launching from American ports. So a showdown between cruise lines requiring vaccinations and the state will have to wait – if it happens at all.

Bayley does not expect to require vaccines for passengers boarding Royal Caribbean ships at U.S. ports when cruising returns. "I think where we're going to end up in the United States is this combination of what we've seen," Bayley said citing the company's survey of his customers finding 80 percent have or planned to get vaccinated. "It's been a long time. Things are beginning to change. There's a lot more optimism about the future."

That optimism is reflected in people buying American cruises despite the industry remaining docked for the time being. "When we look at the sales overall, they've been very, very strong and there's clearly demand," said Bayley. He foresees a "bumper year for travel" in 2022.

Demand is so strong that Royal Caribbean Group, the parent company of Royal Caribbean International, said on its fourth quarter financial results conference call that cruise prices for the second half of this year is higher than 2019. "(There) is a huge population of cruises who absolutely love cruising and miss it desperately." On that February conference call, the company said 75 percent of bookings are new, not rescheduled sailings for reservations canceled over the past 13 months.

"All of those bookings," Bayley said, "is going to bring back the work, the small businesses in Florida, the travel agents, the florists, the trucks, the stevedores, the longshoremen, the ports, the hotels, restaurants."

There is one Florida port-of-call that is not eager to welcome back big cruise ships. Key West voters approved a series of referenda, which include limits on the size of ships and the number of daily cruise passenger on-shore visitors. But state lawmakers are considering a bill that would overturn those measures by not allowing local limitations on what the legislation calls "maritime commerce."

"The thing about these processes is that sometimes they work in your favor, if you have a particular dimensional view of it, and sometimes it doesn't. But it doesn't always start with one process. There's other processes," Bayley said.

In a journalism career covering news from high global finance to neighborhood infrastructure, Tom Hudson is the Vice President of News and Special Correspondent for WLRN. He hosts and produces the Sunshine Economy and anchors the Florida Roundup in addition to leading the organization's news engagement strategy.