In the wake of the coronavirus crisis, millions of workers across the United States have been laid off. In perhaps the hardest-hit industry — cruising — one of the biggest companies just announced layoffs of its own.
Royal Caribbean Cruises Ltd., the parent company of Royal Caribbean, Celebrity, and Azamara, announced it is laying off or furloughing about 26% of its workforce in the United States.
According to a statement reported by the Miami Herald:
“Earlier today, we told our employees the difficult news that we were laying off or furloughing approximately 26 percent of our more than 5,000 coworkers in the US,” the company said in a written statement. “We earlier announced the early conclusion of many crew contracts. The circumstances of the pandemic made this action unavoidable, and it hurts to part ways with so many good and talented people.”
While the official number of employees let go wasn’t mentioned, 26% of 5,000 would mean job losses for 1,300 people.
Before the pandemic, this sort of move would have been unthinkable. Royal Caribbean has steadily grown alongside the popularity of cruising in recent years. Major investments in new ships went alongside the recent completion of a new terminal in Miami and the revitalization of CocoCay.
The cruise giant was also in the middle of a $300 million construction project to build a new headquarters at the Port of Miami. (According to the Miami Herald, this was put on hold in March.)
With the coronavirus, however, it’s not surprising that Royal Caribbean had to take such actions. Cruises have been suspended since March, and a recent “No Sail Order” from the CDC puts the likelihood of a return unlikely for months.
Right now Royal Caribbean has already suspended its cruises until at least mid-May. It appears the suspension will have to be extended given the “No Sail Order.”
In response to the suspension of sailing, the cruise line has offered generous cancellation policies. This includes the ability to cancel some sailings up to 48 hours before sailing. And for those who have had cruises cancelled, the line has offered a choice of 125% in cruise credit, or a 100% refund.
There is some reason to be optimistic. A recent report from UBS claims that cruise bookings industry-wide are up 9% for 2021 in the last 30 days compared with last year. Meanwhile, the report also said that 76% of people whose cruises were cancelled are taking the future cruise credit instead of a refund.
Those numbers seem to be rare bit of good news for the industry. But when Royal Caribbean and other cruise lines get back to sailing is still anyone’s guess.