The cruise ship industry was on the brink of crisis Monday as the State Department warned travelers against taking voyages during the coronavirus scare and U.S. health officials prevented some ships from sailing.
Nowhere will the effects be more acute than in Florida, a battleground state crucial to the 2020 election campaign and the home base for the nation’s biggest cruise companies. The sector supports about 422,000 jobs in the United States, more than a third of which are in Florida, according to the Cruise Lines International Association.
President Trump said Monday that he would seek to provide assistance to the cruise industry as well as airlines and hotels, all of which face economic fallout as Americans cancel travel plans. The president also said he would ask Congress to cut payroll taxes and provide relief to hourly workers.
Lobbyists for the cruise industry have not asked for bailout funding, but congressional aides said they expect them to, should the downturn continue to hammer the sector, according to a person familiar with the matter, who spoke on the condition of anonymity to candidly discuss private conversations.
Amid a broadly plummeting market, shares of Carnival Corp. closed at $21.74 Monday, down from $50 or more in early January. Royal Caribbean Cruises stock ended the day at $48.27, a sharp fall from $130 or more early this year. Norwegian Cruise Line shares dropped to $19.81 from $58 or more before the health crisis. All three companies are based in Florida.
“It seems like the worst-case scenario is unfolding, with these companies’ market caps cut in half and no end in sight,” said Tuna Amobi, an industry analyst at CFRA, an independent research firm.
The coronavirus had already caused cruise lines to cancel voyages in Asia in recent weeks, but losing American customers is likely to hurt more. North Americans made up 54.5 percent of the industry’s passenger count in 2018, while Europeans were 26 percent and Asians were 9 percent, Amobi said, citing figures from Cruise Market Watch, which monitors the industry.
Cheryl Mitchell, a travel agent based in Sunny Isles Beach, a city between cruise ports in Miami and Fort Lauderdale, said she has been inundated with calls and messages from panicked clients trying to determine whether they should continue with their already booked cruise plans in coming weeks and months.
“Today, I’m just sitting here deciding what I need to say to everyone,” Mitchell said by phone Monday. “It’s going to be a really difficult process.”
Mitchell, who gets about 80 percent of her revenue from clients booking cruises, said the warning to forgo cruising would hit all kinds of businesses. “Keep in mind that when someone books a cruise, they also book flights (and) local hotel stays for when they arrive the weekend before,” she said.
The State Department directive, posted on Twitter just before 4 p.m. Sunday, said “U.S. citizens, particularly travelers with underlying health conditions, should not travel by cruise ship,” citing the increased risk of infection onboard. It also noted that other countries with strict screening procedures had stopped passengers from disembarking or quarantined them.
Previously, U.S. officials had gone only as far as saying that senior citizens and people with health conditions should avoid cruising.
That warning came just as the Centers for Disease Control and Prevention was scrambling the travel plans of two additional cruise ships over infection concerns.
After receiving a no-sail order from the CDC, the Caribbean Princess was forced to cut short a voyage Sunday and head back to U.S. waters from Costa Rica to test two crew members for the coronavirus, Carnival Corp. said in an emailed statement, confirming a report in the Miami Herald. The ship is anchored off the coast of Florida, awaiting those test results, Carnival said.
The CDC also mandated testing of two crew members on the Regal Princess, delaying its planned docking at Port Everglades in Fort Lauderdale on Sunday until the tests came back negative, Carnival spokesman Roger Frizzell said, confirming another Miami Herald report.
Those CDC orders came after American passengers aboard two Carnival ships became infected with the coronavirus within the past two months — the Diamond Princess, which was moored for weeks off the coast of Japan, and the Grand Princess, which was being held in waters off San Francisco on Sunday and docked in Oakland on Monday, with the coronavirus detected among nearly half of the passengers initially tested.
Frizzell said Carnival’s cruise lines had “enhanced their health screening protocols,” including conducting thermal scans and temperature checks before boarding and onboard.
“The health and safety of our guests and crew is our highest priority,” he said, adding, “While advisories have been issued, no restrictions are in place for those who choose to take a cruise.”
Cruise lines were offering cut-price deals and extra perks on their websites Monday. Royal Caribbean was advertising three-day cruises for as low as $99, while Norwegian Cruise Line offered a free open bar and free excursions with bookings.
Some travelers appeared willing to defy the travel warning. Passengers streamed aboard a Carnival ship in Miami’s cruise port Monday morning, with some saying they were undeterred by the State Department advisory, the Miami Herald reported.
Others were leaning toward canceling.
Steve Dutton, who has taken 40 cruises since 2005 and retired in Miami in part to be near its port, told The Washington Post he would likely scrap plans to embark on a Holland America cruise out of Fort Lauderdale next week and a Virgin Voyages cruise out of Miami in April. Both companies are offering credits for future bookings if he cancels now — or perks if he departs, he said.
“My thought is they’re probably going to have few so few people on this ship I could probably have anything I want,” Dutton said with a laugh. “It would be enticing, except, again, do I want to risk being quarantined for 14 days on the ship and hoping they can airlift additional food to me at sea because they won’t let me come into any port?”
He said he feared for the industry, which is an integral part of the South Florida economy, with many businesses and employees built around cruising.
“I’m sad for the industry, I’m sad for the people that are already cruising, I’m sad for the people whose vacations have now been spoiled,” he said. “But it is what it is. We have to recognize that this is much more serious than vacationing.”
A day before the State Department order, Vice President Pence, who is leading the Trump administration’s response to the virus, met with cruise industry leaders Saturday in Fort Lauderdale to ask them to “step up their efforts to protect the health and safety” of their passengers and crews.
“The American people value our cruise line industry,” Pence said. “It brings great joy, it’s a great entertainment value for Americans. We want to ensure that the American people can continue, as we deal with the coronavirus, to enjoy the opportunities in the cruise line industry.”
Katie Miller, a spokeswoman for Pence, told The Washington Post on Sunday that the administration’s new warning against cruises was “a recommendation made by health professionals that the White House of course adopted.”
The CDC issued an advisory similar to the State Department’s on Sunday, recommending that travelers — particularly those with underlying health issues — “defer all cruise ship travel worldwide.” The agency added that cruise passengers are at a higher risk of person-to-person spread of the coronavirus.
CLIA, the industry association, said in a statement that it was “staying focused on the development of an aggressive, responsive plan as agreed to during the meeting with the Vice President yesterday, which will go beyond the significantly enhanced protocols already in place.”
Stewart Chiron, an industry expert who bills himself as “The Cruise Guy” and offers cruise discounts and tips, said he hadn’t seen anything like the State Department advisory in 30 years of observing and talking about the cruise business.
Mike Driscoll, the editor in chief of Cruise Week, said industry leaders were set to meet again with government officials on Tuesday to discuss ways they could address concerns.
Hannah Knowles, Kim Bellware and Hannah Sampson contributed to this report.