This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
viewpoints
Welcome to Reed Smith's viewpoints — timely commentary from our lawyers on topics relevant to your business and wider industry. Browse to see the latest news and subscribe to receive updates on topics that matter to you, directly to your mailbox.
| 1 minute read

Cruise industry - into uncharted waters

Whilst it is too soon to tell what the cruise market will look like on the other side of the COVID-19 pandemic, it is common knowledge that the cruise industry (together with the aviation industry) is the the transportation sector most adversely affected.

As the summer 2020 cruise season is cancelled, the cruise companies are now focusing on restarting cruises from autumn 2020 / spring 2021. In order to achieve this, they will need to develop improved cruise health and safety standards and train their crew accordingly. 

In addition, the cruise companies may want to implement a COVID-19 monitoring system for their restart, which will allow them to change the cruise itineraries depending on the COVID-19 cases in each destination.  

The COVID-19 pandemic will have a direct impact on the number of cruise ships operating on the high seas as well as the designs of new cruise ships. For example, more and more cruise companies will end up sending their pre-2000's cruise ships for scrap due to a difficult second-hand market. They may also want to adjust the designs/floor plans of any new cruise ships in order to comply with COVID-19 safety and health measures. 

Finally, as a large percentage of the cruise passengers will have to fly to the home port from where the cruise will start, the recovery of the cruise industry is interlinked to the recovery of the aviation industry. The safer it is for people to fly the easier it will be for people to go on a cruise. 

The companies have lost billions in equity value since the virus spread worldwide, forcing them to cancel all voyages and take out huge loans to provide enough liquidity to help pay their bills.

Tags

transportation, shipping, cruises

Latest Insights