A Major Cruise Line Cancels More Sailings. Will Others Follow?

This morning, Norwegian Cruise Holdings Ltd. — the parent company of Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises — announced yet another extension of its pause in sailing.

The new extension lasts for another month, with cruises cancelled through June 2021, instead of the previously announced May 2021.

While Norwegian, along with other cruise companies, have sounded optimistic in recent weeks regarding a return to sailing, they have stopped short of giving definitive dates of return.

“Today I would tell you that we are in a better place, a more encouraging place than we were even just six weeks ago,” Norwegian CEO Frank Del Rio said during a recent investor call. “At the end of the day, I think the prevalence of the disease, in our own country and around the world will be the greatest indicator of when we can resume cruising. And the prevalence is dropping.”

Del Rio also mentioned that his company aims for a 90-day window to get a ship ready to sail. From today, 90 days extends to mid-June, making it difficult to get back to sailing within the previously announced timeframe, even if the CDC were to give cruising the green light to return.

With this timing, it’s not a big surprise Norwegian decided to cancel more sailings. The big question is if other cruise lines will follow suit.

Other Cruise Lines to Follow Norwegian’s Lead?

During this pandemic, cruise lines have largely followed one another in their suspensions. We expect something similar to happen here, with other major lines possibly making announcements in the days ahead.

The health crisis has been unprecedented, but all the lines have similar challenges in a return to sailing. They all have to work with the CDC to meet the new Framework for Conditional Sailing and have similar challenges in getting massive ships crewed and ready to cruise again.

For instance, the CDC framework requires that cruise lines complete a simulated voyage well in advance of a return to sailing with paying passengers. At this point no major cruise line we’ve seen has announced one of these test cruises. That indicates cruises aren’t on the cusp of returning.

Given that the lines all face the same hurdles to return, it would make sense they would all schedule to resume operations around the same time.

And while cruise fans are no doubt tired of being in limbo about when cruises will actually sail again, there are reasons to be optimistic.

In the United States virus cases have plummeted in recent weeks. From averaging about 250,000 new cases a day in mid-January, that number is now around 55,000.

Meanwhile, the vaccine rollout has ramped up dramatically. Nearly 30% of American adults have at least one shot of the vaccine, according to the CDC. Nearly two-thirds of Americans 65 years or older have received at least one shot. President Biden has also directed that all adults be eligible for the vaccine by May 1.

At Cruzely, we’ve predicted that cruises don’t sail again until a vaccine is widely and readily available to anyone that wants one. The good news is that the country certainly appears to be making strong progress on that front.

The ultimate call to get back to sailing will be in the hands of the CDC. Cruise lines have sounded optimistic in working with the agency.

“As they’ve [the CDC] explained to us on many occasions, this is really about what’s happening with the virus,” said Royal Caribbean President Michael Bayley in a recent investor call. “They’ve assured us on several occasions that when these indicators really start to move in a very positive way, they will start working with us to get us back into operation.”

In other words, it seems likely that with Norwegian pushing cruises back again, more cruise lines will follow suit. However, if the current trends with the virus and vaccines remain in place, then a return to sailing would be possible in the months ahead.

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