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More than 200 cruise ships will return to service this month

Although the cruise industry is still sailing on sight in the face of the uncertain evolution of the global health context and according to each country, activity has picked up again this summer. While the entire world fleet was shut down in the spring of 2020, with only a few ships returning to service in the second half of the year, the situation has improved quite significantly. Cruise Industry News counts 205 units from 64 companies in service this month, compared to only 20 ships (11 operators) a year ago. The recovery began in May (48 ships, 20 companies) to accelerate in June (74/28), July (140/50) and August (190/65).

Two-thirds of the fleet back but limited capacities

Knowing that today there are more than 320 maritime cruise ships around the world, from giant liners to small expedition ships, this means that around two-thirds of the fleet are active again. With however very unequal proportions between companies. For example, MSC Cruises lined up 12 of its 19 liners in September, while Costa operated 6 out of 12, NCL 6 out of 17 and Ponant 4 out of 11 (excluding Le Ponant and Paul Gauguin).

All types of ships are concerned, including the largest ones. The total capacity of the reactivated fleet represents more than 326,000 beds according to CIN figures. But the boats are not running at full capacity, since they are operated on a limited capacity in order to comply with the health protocols put in place to avoid epidemics on board.

The recovery driven by the reopening of cruises in the USA

The recovery observed this summer, thanks in particular to progress in vaccination against Covid-19, is clearly driven by the resumption of cruises in the United States, the world’s largest market, which had been completely stopped since March 2020. A reopening which for the moment is going well, prompting shipowners to plan for the rapid addition of new capacities. Thus, the American company Carnival Cruise Line, which owns 24 cruise ships and now has eight cruise ships operating from US ports, announced yesterday that it plans to add seven more by January (out of a total fleet of 24 ships). In Europe too, where the liners had started to sail again in the summer of 2020, we can see a rise in power.

Still great uncertainties for the months to come

But overall, this recovery remains largely regionalized and remains hampered by persistent difficulties with international travel and the possible resurgence of the pandemic or the appearance of new variants during the winter period. In any case, the operators seem to think that the constraints on long-term tourism will last if we are to believe the numerous cancellations of major voyages, cruises around the world and distant programs (such as Antarctica) at the end of the year and even in 2022.

A sector that must digest abysmal losses and colossal investments

To cope with the most serious crisis in its history, the cruise industry has been forced to rationalize strongly for a year and a half, by reducing costs as much as possible and for some by getting rid of the oldest boats. But above all, the sector is very heavily indebted to survive, even though colossal investments had been initiated in recent years to continue to develop a hitherto flourishing market. Orders for new liners were essentially maintained, but there were negotiations with yards and banks to readjust schedules to smooth out payments.

Another 92 new ships planned by 2027

In the end, while 15 cruise ships have been delivered since the beginning of this year, 92 others are still scheduled to enter service by 2027. Even if they don’t really have a choice given the sums involved, investors always respond. It is true that the fundamentals of cruising remain good, even if this industry, like others, must evolve following the crisis and respond to environmental issues which are only accentuating in the face of the climate emergency.

A more or less long pause in the commands

In any case, the companies will have to absorb the enormous losses linked to the pandemic and try to recover their pre-crisis profitability. This, while it will still take many months before we can hope to be able to run at full speed again. If the orders placed before the eruption of the coronavirus are generally maintained, there is a logical risk that there will be a period of pause in investments in order to digest the economic repercussions of the crisis. In addition, new objectives for the fight against global warming will be added to this. Cleavers which should encourage shipowners to wait for the appearance of new technologies ensuring that their new ships, called to sail for at least 30 years, meet the requirements for reducing greenhouse gases by 2030/2050. For now, the account is not there and a real race for innovation will have to engage to give birth to viable solutions.

Worksite load plan drops from 2024

For now, shipyards still have two good years ahead of them. While 26 ships are to be delivered this year (15 having already been delivered as we have seen), 29 others are scheduled for 2022. Then, in 2023, production will start to drop although it will still be at a level high (22 units planned). On the other hand, we are witnessing at this stage a collapse from 2024, a year in which there are currently only 11 ships on order. Ditto for 2025, 11 ships as well, while deliveries fall to 5 ships in 2026 and only 3 in 2027. A load plan which, barring disaster, will probably be expanded by then with the resumption of activity and hopefully to growth, but also the need for new generation less polluting ships. But from there to imagining finding around in the next few years the record level of activity before the crisis, it is uncertain to say the least. In any case, there is urgency for the manufacturers because the effects of the reductions in delivery in 2024 will be felt well upstream, first in the design offices, then in production.

© An article by the editorial staff of Mer et Marine. Reproduction prohibited without the consent of the author(s).

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