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U.S. Cruise Industry Facing Major Losses Due to Covid-19 Fears

Despite the U.S. allowing cruise sails in its waters, most major lines have decided to extend the suspensions till 2021.
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Will the cruise industry recover from the impact of the coronavirus outbreak before the year ends?

Since the Coronavirus has struck, the travel and tourism industry and the hospitality industry have seen the most devastation. Destination spots dependent on the tourism economy are facing a dire year, along with the airline industry and hotels and restaurant businesses.

Another business that has faced the devastation of the Coronavirus effect is the global cruise industry. More than 500 cruise ships are reportedly lying idle around the marines across the globe. In 2019, the cruise industry employed 1.2 million people around the world. In 2018 nearly 28 million took a cruise; the numbers for 2019 were similar. In 2020 an estimated 32 million were expected to take a cruise.

Until recently, cruises were the fastest growing sector of the travel industry. In the past five years, the demand increased by 20.5 percent. In 2018, it was estimated that the world cruise industry was worth approximately $150 billion. In the first quarter of 2019, the largest three cruise organizations reported revenues of $4.7, $2.4 and $1.4 billion with net income of $336, $257 and $118 million.

But the current COVID-19 environment has created fears of infection and concern amongst the public about health safety onboard cruise ships.

The international cruise association CLIA estimates that 215,800 jobs in the industry have been lost in Europe alone since mid-March. The cruise association estimates that the suspension of cruises has lead to a $25 billion loss in economic activity and 164,000 American jobs.

US Cruise Industry COVID-19 Impact Losses

Tens of thousands of employees at cruise companies and shipyards have been placed in work furlough programs, and it remains uncertain whether their jobs will return at all.

Carnival, Norwegian and Cruise Lines International control almost 95% of the global cruise business. Two of them—Carnival and Norwegian- have agreed to extend U.S. sailing operations' suspension for the rest of 2020.

Cruise Lines International Association — which includes cruise giants Princess, Carnival, and Royal Caribbean — said that its members have voluntarily opted to maintain the current suspension of cruise operations in the U.S. through the end of the year.

Members "will use the remainder of the year to prepare for the implementation of extensive measures to address COVID-19 safety" with the guidance of public health experts and the U.S. Centers for Disease Control and Prevention, the association said.

The rules prohibiting cruise sails officially ended on November 1. U.S. Federal health officials issued new rules and guidelines last week, allowing large cruise ships to start operations again in the U.S. waters, soon. According to the CDC guidelines, cruises will be limited to seven days and all passengers will be tested before embarking on and off the ships. They also have to have quarantine facilities ready for crew and passengers both, if needed. They will need to have their own testing labs on ships. Mock drills of emergency outbreaks also have to be undertaken to test the ships' preparedness for handling such situations.

The new guidelines come as coronavirus cases surge in the U.S. and worldwide with the arrival of the colder weather.

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