Cruising for a $3.8bn bruising

If the suspension of the $5bn cruise industry continues to November it could cost $3.8bn and threaten 13,000 jobs.

The industry is taking a wide-ranging and holistic approach to planning for COVID-19 safety when sailing can resume

If the suspension of the $5bn cruise industry continues into the summer high season of October and November it could result in further losses as high as $3.8bn and put another 13,000 jobs at risk.

New analysis by AEC reveals the cruise shutdown had already cost the economy almost $500m by the end of May.

The research was commissioned by the Cruise Lines International Association whose members include more than 50 largely US-owned operators including Carnival, Royal Caribbean, NCL, P&O Australia, Celebrity and Princess.

“We wanted to see the economic impact if cruising does not return after September 17,” said CLIA managing director Joel Katz.

The association was investigating the impact on small businesses related to the cruise industry such as travel agents, tour operators, food and beverage suppliers and hotels, as well as the 50 city and regional destinations the industry was serving before COVID-19.

Mr Katz said many thousands of businesses that worked with the cruise industry were suffering financial stress.

“We want to return the economic benefit of cruising to the supply chain. We appreciate the timing has to be right,” he said.

Some cruise lines are already trying to make a comeback, with the US-owned Royal Caribbean commencing sales of cruise itineraries to the Australian market last week, while its luxury brand Silversea will start marketing cruises on Wednesday.

Cruise lines and travel agents hope they can restart operations from October or November to coincide with the summer cruise season.

Despite the companies’ pleas to recommence sailing, federal Tourism Minister Simon Birmingham said recently that cruise ships had not yet been given the green light. “I would assume that cruise shipping will be one of the last activities to come back online,” Mr Birmingham said.

“There were quite clearly failures in terms of public health management that contributed to the spread of COVID-19 on a number of cruise ships around the world.

“I believe health officials will be very cautious about giving a green light to cruise shipping any time soon.”

But Mr Katz said the CLIA had established a dialogue with the government to get to a point where cruising could restart in a safe way.

“It is a joint effort and both government and industry need to come together.’’

If the cruise industry was allowed to return after the September 17 suspension Mr Katz expected itineraries to be largely domestic and open to Australian residents only.

“It is too soon to know where the itineraries would be,” he said.

“A lot would depend on borders. We would be looking at a phased approach. It could be just domestic cruising carrying just Australian residents initially.”

Mr Katz said operators were working to develop safety measures for passengers and crew when the time was right to resume sailing.

He warned the economic cost in the meantime would extend far beyond the cruise lines themselves.

“Cruise tourism is worth $5.2bn a year to the Australian economy and supports more than 18,000 jobs,” he said.

“These jobs are spread across almost 50 destinations and every state, including many regional communities and remote locations that have suffered enormously in the tourism shutdown.

“The suspensions that cruise lines and governments have enacted worldwide have been the right response as we confront COVID-19, but there is an enormous cost to those who make up the wider cruise community,” he said.

CLIA has been meeting with the Australian and New Zealand governments to discuss a return to cruising. “(The) science around COVID is still evolving, (and it is) too soon to outline what those measures are. Cruising is a very social environment, we need to get it right.”

Mr Katz said the CLIA backed calls for the JobKeeper allowance to be extended.

“The industry is taking a wide-ranging and holistic approach,” Mr Katz said. “The industry is considering protocols that will ideally entail a door-to-door strategy beginning at the time of booking through to when a passenger returns home.

“While it is too soon to outline specific measures, the industry is considering protocols that will ideally entail a door-to-door strategy beginning at the time of booking through to when a passenger returns home.”