(9 a.m. EST) -- Even as cruises scheduled for the next few weeks are being canceled because of COVID-19, cruise lines are seeing an increase in demand for voyages setting sail in 2021.
An April 8 report issued by global investment firm UBS found that a majority of cruise passengers are receiving compensation in the form of a Future Cruise Credit, or FCC, rather than a straight refund -- up to 76 percent, in some cases. The analyst noted that roughly 50 percent of Norwegian Cruise Line passengers were opting for the FCC, while FCC amounts were higher for Royal Caribbean, which is giving passengers until the end of the year to request a refund. In the case of MSC Cruises, the percentage is even higher -- between 80 to 85 percent of passengers are rebooking rather than opting for a refund, according to the UK Managing Director, Antonio Paradiso.
"Rescheduled bookings for 2021 show a surprising resilience in desire to book a cruise," a UBS analyst states. "Bookings for next year would typically only be in the low 20 percent range, so if next year is now 23 percent booked, up from 21 percent last year, that would be a double-digit increase, so the math is not unreasonable, especially since many of these are, as we noted, cruises rescheduled from this year and cruises using FCC."
The report also notes that the two strongest regions being booked for 2021 include voyages to Asia and cruises to Alaska and the Caribbean. Demand for European itineraries remains "ok.", though it is not clear if the report differentiates river versus ocean lines when it comes to European cruising.
A Good Time To Book Ahead
"Now is a great time to book travel and many clients with future cruise credits are calling Cruise Planners travel advisors asking how to get the best value of their cruise," Vicky Garcia, COO & Co – Owner, Cruise Planners, an American Express Travel Representative, tells Cruise Critic.
Garcia notes that Cruise Planners’ bookings for 2021 are up by 15 percent, a figure that the company says includes both re-bookings from customers affected by cruise cancellations this spring that are using their future cruise credits, along with brand-new bookings.
"Now is the time to pick the stateroom you want, the perfect location at great rates because we all know that when the economy starts bouncing back, so will cruising and that means prices will go up," said Garcia.
Bookings for the 2021 season may be up in part due to displaced cruisers previously booked on cancelled voyages this spring. With cruise lines around the world announcing voluntary suspensions in operations that stretch into the summer, cruisers could be looking to rebook voyages later in 2020 and into 2021.
Although demand for 2021 is being made up from several sources, that still means that prime accommodations, like suites and single-occupancy staterooms, are likely to start filling up on key voyages throughout the coming year.
That, in turn, could spurn prospective travellers into securing space on high-demand voyages for 2021 earlier than normal.
Increased Demand for 2021: New Bookings and FCCs
This could be welcome news for Carnival Corporation, which noted in its First Quarter 2020 guidance issued on March 19 for the period ending February 29, 2020 that while initial wave season bookings had been strong, demand for the remainder of 2020 and 2021 was lagging behind.
"For the seven week period beginning January 26, 2020 and ending March 15, 2020, booking volumes for the remainder of the year were meaningfully behind the prior year on a comparable basis as a result of the effects of COVID-19," Carnival Corporation noted in its statement. "As of March 15, 2020, cumulative advanced bookings for the remainder of 2020, are meaningfully lower than the prior year at prices that are considerably lower than the prior year on a comparable basis, reflecting the impact of COVID-19."
That guidance is already one month old, and much has changed since then.
Speaking on CNBC on April 14, Carnival Corporation CEO Arnold Donald commented on the multitude of issues facing the industry, while noting that bookings for 2021 have seen an uptick in recent weeks.
"We've had substantial bookings," said Donald. "Bookings for 2021 are strong."
"Travel…is going to return," he remarked later in the interview. "And when it does, people will want to cruise. We have lots of people booking for 2021 now, some for 2020 still, so we'll have to see how this evolves."
The UBS report also noted that cruise lines could take several steps to restore passenger confidence.
"Right before the shutdown, cruise lines had started to require some medical approval for passengers over the age of 70 years," it states. "When business restarts, there could be a similar requirement. And any potential for a rapid-test before boarding would likely go a long way to increase passengers' comfort in rebooking."