In a spirited quarterly call with investment analysts, Norwegian Cruise Line Holdings Ltd. CEO Frank Del Rio expressed major frustrations with the CDC, its new instructions for the Conditional Sail Order, and said the company’s return to U.S. sailing in mid-summer could be off the table.
For a week, the buzz in cruising has been about a potential restart by mid-July. Following meetings between the CDC and the cruise industry, both the health agency and cruise executives have pointed to this summer as when cruises might return.
New modifications to the Conditional Sail Order rules potentially speed up the return by removing steps such as simulated test cruises if the vast majority of those on the ship are vaccinated. The CDC also reduced a 60-day waiting period for a certificate to sail down to just five days.
Norwegian Cruise Line Holdings Ltd., however, is warning that a July restart is anything but definite.
In a quarterly business update, the cruise company put out the following statement:
“The Company remains actively engaged in discussions with the CDC regarding recently issued and modified technical guidelines and the incorporation of vaccines into the CSO [Conditional Sail Order]. As valuable time goes by, given the lead time needed to stand up a ship and the need for an acceptable and definitive agreement with the CDC, a potential mid-summer restart from U.S. ports could be in jeopardy.”
Ninety Days to Get a Ship Ready Not Enough Time
Norwegian has been one of the most vocal companies in a restart of cruising. Last month, CEO Frank Del Rio sent a letter to the CDC outlining its plans to restart in the United States by July 4th. The company also made the decision to require vaccines for all passengers on its ships through at least October 31 — including children.
“By requiring full and complete vaccinations of guests and crew, we believe our extensive health and safety standards share in the spirit and exceed the intent of the CDC’s existing Conditional Sailing Order (“CSO”) to advance public health goals and to protect guests, crew and the communities we visit. Therefore, we respectfully request the CDC lift the CSO for all NCLH cruise vessels departing from U.S. ports effective July 4, 2021,” the letter to the CDC said.
But that letter was sent a month ago, and there is still no concrete return date.
Estimates are that it would take 90 days for a ship to be ready. This includes bringing aboard crew (who also need to be vaccinated), readying a ship for the first passengers in more than a year, and supplying the vessel.
When asked during the call how many ships his company could have ready to go from the U.S. by July if the green light to sail again was given now, Del Rio responded:
“None. The July U.S. launch, at least for our company, is just not possible. It was possible back in early April when we proposed to the CDC 100% vaccination. We’ve always said it takes about 90 days to stand up a vessel. So from April 5th, when we submitted our proposal, 90 days would have been early July and that was possible. But today, we’re in early May so now we’re looking past that.”
Stinging Words for the CDC and New Instructions
In addition, the CEO expressed strong frustrations with the CDC and blasted the new requirements released by the health agency yesterday for procedures on returning cruises.
“I have to tell you that I am disappointed at first read,” Del Rio said, speaking of the new guidance from the CDC. “For example, as we read yesterday’s pronouncements, even though everyone onboard would be vaccinated, in between bites of your meal and in between sips of your beverage, you have to put on your mask, take off your mask. So, nobody should order soup because your mask might get sloppy.”
“So that to me is just preposterous. It’s not in the spirit of where the country is heading, where President Biden wants to open the country. Seventy percent of American adults will be vaccinated by the beginning of the third quarter. So we hope we are reading it wrong.”
But one of the most influential people in cruising had more to say about the CDC in general and how his industry has been treated.
When asked what the health agency says when cruise lines inquire why they are being treated differently than airlines, Del Rio made his thoughts clear.
“Listen, they just won’t answer it. We’re perplexed, we’re flabbergasted. We’re outraged. And when we talk about that we’re willing to vaccinate every single person aboard the cruise ship — there isn’t another venue on Earth, not a school, not a factory, not your office building, apartment building, much less an entertainment venue like a casino, hotel, or resort — that can make that claim. We will be the safest place on Earth, by definition.”
“On top of that vaccination mandate, we’re going to implement the 74 Healthy Sail Panel recommendations. That one-two punch is unbeatable. No one on Earth has it. Yet, the CDC continues to treat us differently. We dare say, unfairly.”
“Look, it’s not like the CDC has done a great job of controlling the virus around the country. We rank number one in the world for the most infections, the most hospitalizations, I think the most deaths, yet they pick on the cruise industry to an extreme that is just unbelievable, unexplainable.”
Push to Restart Outside the U.S. Continues
Norwegian certainly isn’t standing still with its business. While it waits on a restart in the United States, all three of its brands — NCL, Oceania, and Regent Seven Seas — have announced cruises departing outside the United States.
NCL in particular plans trips from Athens beginning in July, Caribbean cruises from Jamaica and the Dominican Republic in August, and trips from Europe (Barcelona/Rome) in September.
Even so, the United States is the most important market for cruising. With the statements from Norwegian, some of the hope of a July restart for the industry as a whole might be tempered unless there is more clarity from the CDC soon.