Cruise Industry: Shipping’s Torchbearer Back in Business

The cruise industry has made recent headlines with its return to business. Travel and tourism were put on hold for nearly 15 months and in order to ensure their full return, health guidelines and environmental regulations have become a priority. Not only has this pause been a challenge for the industry in and of itself, but the return comes with multiple responsibilities for the cruise industry. Not all completely new, but certainly amplified.  

While the entire shipping industry has experienced economic pressure from the pandemic, the cruise industry may have been hit the hardest in the last year and a half. In 2019, the cruise industry contributed $55 billion to the American economy – a harsh difference to the 2020 fiscal year. The Cruise Lines International Association (CLIA) reported in their 2020 State of the Cruise Industry outlook that the pandemic had devastating impacts on business and resulted in a loss of $32 billion in economic activity. The demand from consumers scheduling new cruise voyages has increased by over 20% in the last half-decade from 23.1 million passengers to 29.7 million. In 2020, that number fell to 5.8 million. Now, they are beginning to make an impressive comeback. All hands are on deck for the cruise industry, and all eyes are on them as they begin to rebound.   

As each major cruise line is slowly reintroducing its voyage schedule, a safe and successful reentry relies on their strategy. Royal Caribbean, for example, has required many of their guests to be vaccinated, depending on their port of departure. Any unvaccinated guests will undergo additional health protocols, such as Covid-19 testing. While these essential health guidelines have made it possible for a quick return in some cases, cruise lines are still limited in many ways. Travel restrictions, which vary tremendously from country to country, hinder route plans and increase complications. But cruise lines are making a comeback around these guidelines.  

Michele Francioni, SVP Cost Optimization and Process Improvement for Mediterranean Shipping Company Cruises (MSC), commented on this stating “Eight MSC Cruise ships are already operating with passengers, all of them in Europe, and we hope to bring more back into service very soon, including in the US and North America.” While the industry is setting protocols to safely push forward, bringing passengers onboard for voyages still comes second to global health and safety. Cruise lines are successfully achieving the former while respecting the latter. 

Brian Salerno, SVP of Global Maritime Policy for CLIA spoke to us about the cruise industry’s return to full capacity, stating that their success in safety amid the pandemic gives them confidence. “The fact that these passengers were carried in a pre-vaccine environment with an extremely low incidence rate of COVID-19 (a fraction of a percent), underscores the value of thoughtful public health measures that are strictly adhered to…Now that vaccines are available, cruise lines have likewise embraced them. Crew members operating from the US are nearly all vaccinated, and passengers are highly encouraged to be vaccinated.” Almost every major cruise line has embraced rigid health guidelines, and so far, they have worked out very well. With growing vaccine availability, and the worldwide covid rate on a decline, the future looks bright for the industry. Many are relying on it to be bright.   

Multiple industries are awaiting the return of cruise-lead tourism. Without major cruise lines returning, not only are crew’s livelihoods affected but there is a tremendous amount of impact on key destination economies and local population’s way of life. Large cruise lines have become an essential part of many destination’s economies, and without their return, there will be detrimental impact. Passengers are not the only ones looking forward to a revitalized liner market. 

The other side to this story is not as new, but the conversation has certainly never been louder. With the impending threat of climate change over all of our heads, companies are striving to achieve a greater level of environmental responsibility. The cruise industry is no stranger to this phenomenon, as they have been criticized for their past emissions and previous lack of following regulations, even being referred to as “floating cities”.   

The International Maritime Organization (IMO) is guiding the shipping industry into a more sustainable future. The IMO is aiming for a 40% reduction in emissions by 2030 compared to 2008, and a 50% reduction in emissions by 2050 compared to 2008. “In line with IMO’s vision for the decarbonization of shipping, MSC Cruises is committed to achieving net carbon neutral maritime operations by 2050. We also remain on track to meet, or likely exceed, the target for 40% improvement in emissions intensity by 2030 compared to 2008.” Francioni affirmed.   

“The Cruise Industry was the first maritime segment to publicly commit to the IMO’s 2030 carbon intensity reduction goal.” Salerno reminded us. Much of the technology required to make vessels such as large cruise ships completely carbon neutral is yet to be determined. While this is setting the rate of transition, the cruise industry is doing its part in pushing that transition forward with essential funding for research and development, as well as implementing carbon mitigation technology. A few mitigation strategies Salerno referred to were “improved hull shape, more efficient propellers, hull coatings, and even air lubrication systems to reduce drag and improve fuel efficiency”. CLIA’s 2021 State of the Cruise Industry Outlook Report displayed the industry’s $23.5 billion investment in the research and development of new energy-efficient technologies, expanding partnerships with local governments around popular destinations, and in its commitment to reach carbon reduction of 40% by 2030 compared to 2008.   

The past 15 months have been challenging for the shipping industry on all fronts, but the cruise industry may have been hit the hardest. Now, the cruise industry leads by example moving forward by setting Covid-19 protocols for staff and passengers, as well as meeting new environmental regulations to ensure a greener future. A prompt return to maximum capacity is exciting, and the steps to get there are greater than ever before. With vaccination rates increasing across the globe, individuals will seek to explore our seas once again and will surely be returning to cruising enthusiastically. NAMEPA will continue to promote best practices as the cruise industry reengages with new safety protocols at hand and environmental regulations in play.