Bushfires hit cruise industry

Royal Caribbean Cruises says local bookings dipped because of the bushfires, but the industry has other global problems too.

Royal Caribbean Cruises’ Ovation of the Seas docks in Sydney. Picture: Jane Dempster

Australia’s bushfires have dealt a blow to the nation’s $5.2bn cruising sector, with Royal Caribbean Cruises reporting a dent in its local bookings.

The hit comes as unrest in the Middle East, political upheaval in Hong Kong and the coronavirus also take the shine off the ­industry.

In an investor update on Friday, Royal Caribbean Cruises chief financial officer Jason Liberty said the Miami, Forida-based company’s Australian bookings had suffered as the bushfires spread across the nation.

“Australia sailings account for 7 per cent of our capacity and our books are slightly behind for the year,’’ Mr Liberty said in the fourth-quarter earnings update to investors.

“Recent events around the globe have impacted demand for some of our international itineraries, specifically the unprecedented bushfires in Australia and recent activities in Hong Kong and the Middle East are each having an outsized impact on revenue for the first quarter.”

Although there was a lift in cruise bookings following the worst of the bushfires, the cruise line had still seen an overall ­pullback from its Australian customers.

“During those bushfires what we saw was obviously the consumer, the local consumer was very focused on what was happening there in their country,” Mr Liberty said.

“So we saw a little bit of pullback in terms of activity for close in. What we did see as things settled down there is an acceleration of demand.

“And so we were able to fill those ships, but at slightly lower pricing just due to the timing of all of it.”

Royal Caribbean Cruises said it implemented protocols almost two weeks ago to deal with the outbreak of the coronavirus from China. It has implemented a secondary screening system that monitors passports, the passport holder themselves as well as checking temperatures of pass­engers.

Currently one cruise liner, Diamond Princess, owned by Britain’s Carnival, is stranded off the coast of Japan with 3700 passengers and crew under strict quarantine for two weeks after 10 people on board tested positive for the coronavirus.

Ocean cruising has become an increasingly popular holiday choice for Australians, especially among older tourists and families, with the value of the industry in Australia estimated at about $5.2bn.

According to industry figures, the Australian cruise industry increased by 11.2 per cent in its total value to the national economy in 2018-19, generating $5.2bn in ­direct and indirect output.

In that period, 1240 cruise ship visits led to 3.8 million passenger and crew visit days, resulting in direct expenditure by passengers, crew and cruise lines totalling $2.5bn.