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Coronavirus: Updated Cruise Ship Policies and Cancellations Because of COVID-19 (2021)
Coronavirus: Updated Cruise Ship Policies and Cancellations Because of COVID-19 (2021)
Cruise ships in the Caribbean (Photo: Cruise Critic)
Cruise ships in the Caribbean (Photo: Cruise Critic)

Carnival Corporation Says All Cruise Ships Could Sail by 2021 End; No New CDC Info

Cruise ships in the Caribbean (Photo: Cruise Critic)
Cruise ships in the Caribbean (Photo: Cruise Critic)

January 11, 2021

Aaron Saunders
Senior Editor, News and Features

(3:25 p.m. EST) -- Carnival Corporation's entire fleet of ships, from all its cruise lines, could be back in the waters by the end of the year, company President and CEO Arnold Donald said today, but there's no firm timeline for restart yet as the dialogue with the U.S. Centers for Disease Control & Prevention is still ongoing.

The mixed message of optimism and stagnation came during the company's Q4 earnings call Monday.

Carnival Corporation, which counts Carnival Cruise Line, Costa, Cunard, Holland America, Princess, Seabourn and others as part of its global portfolio, reported a $2.2 billion loss for the fourth quarter of 2020. The Corporation currently has $9.5 billion of cash and cash equivalents on-hand,

The corporation now has roughly $27 billion dollars of debt but stated that it had the ability to raise additional capital if necessary.

"2020 has proven to be a true testament to the resilience of our company," said Donald in a statement. "We took aggressive actions to implement and optimize a complete pause in our guest cruise operations across all brands globally, and developed protocols to begin our staggered resumption, first in Italy for our Costa brand, then followed by Germany for our AIDA brand.

"We are now working diligently towards resuming operations in Asia, Australia, the UK and the U.S. over the course of 2021."

Donald added separately that the corporation was committed to restarting all vessels, across all brands, by the end of 2021.

"We are working toward having all of our ships back in service by the end of the year," he stated.

Dialogue with CDC Still Ongoing for Test Cruises, Restart of Operations

The Sports Deck on Queen Victoria
The Sports Deck on Queen Victoria

During a call with investors Monday morning, Donald acknowledged that much of the details surrounding test cruises required by the CDC as part of its Framework for Conditional Sailing still had yet to be communicated from the organization to the cruise lines.

It's a work in process," said Donald. "We have calls as often as we need with them. That remains to be seen. We're on track to be able to do whatever we need to do in a very timely manner to be able to resume cruise."

Pressed by investors as to when the required test cruises -- widely expected to signal a restart of the industry -- could occur, Carnival Corporation CFO David Bernstein responded that the CDC had still not communicated all the requirements, nearly three months after issuing its revised guidance on October 31.

"For the US, for the CDC, we're still waiting for a lot of the technical guidance that was not included in the original conditional sail order," said Bernstein.

Bernstein also noted that Carnival Corporation had been proactively moving ships back in to U.S. waters in advance of an anticipated restart, in order to satisfy CDC requirements.

"If you look at the CDC website, you'll see that we brought 30 ships back into U.S. waters, with one more, Mardi Gras, coming," Bernstein told investors. "Those are the ships that we expect to sail in the U.S. through the balance of the conditional sail order. The remaining ships would sail outside U.S. waters. "

Donald said that a meeting between cruise line officials and the CDC had occurred last week, although he didn't divulge any details.

"I learned a long time ago: never try to predict regulatory anything," said Donald. "By its nature, it's not that predictable. They'll the CDC make their determinations in the timeframe that they feel comfortable. We don't have a definite date for future guideline release, but we'll be prepared to act."

More Ships to Exit Fleet; Most Newbuilds Delayed


Carnival Corporation also noted that the line will jettison a further four vessels from its fleet, up to 19 from the previously announced 18 vessels that were reported at the end of the third quarter 2020.

A total of 17 of those vessels have already been announced publicly. The two remaining vessels have yet to be announced. Carnival Corporation gave no indication which two vessels would be withdrawn from service, nor did it reveal which brand the ships would come from.

In 2020, Carnival Corporation moved quickly to jettison older, less-efficient tonnage, getting rid of Carnival Fantasy, Inspiration, Imagination, as well as other vessels including Holland America Line's Amsterdam, Maasdam and Rotterdam; and Princess Cruises' Sun-class duo, Sun Princess and Sea Princess.

The corporation also announced that all firm orders for new cruise vessels across all brands would continue to be constructed as planned. The line did note, however, that it only has one new vessel on order for 2024, and one new vessel on order for 2025.

That reduction in newbuilds, it stated, would allow it to pay down its debt facilities, raising the prospect that the order book for the latter half of the decade could slow down considerably.

Carnival did disclose that it has negotiated delays for a total of 16 ships currently on-order.  It also said it expects only one ship to enter service in 2021, instead of the five that were originally slated to debut this year.

The Corporation did not disclose which of the five ships it would launch this year.

Bookings for 2022 Remain Strong; Pent-Up Demand Cited

Havana, Cuba (Photo: Sean Pavone/Shutterstock)
Havana, Cuba (Photo: Sean Pavone/Shutterstock)

Despite the lengthy shut-down of the cruise industry, the ongoing pandemic, near-zero marketing spend and negative press for the industry over the past year, bookings continue to be strong for the last half of 2021 and well into 2022.

Bernstein noted that approximately 60 percent of all bookings taken during the fourth quarter are new bookings, while the remainder are those with applied Future Cruise Credits, or FCC's.

Approximately 45 percent of all booked passengers in 2021 are those that are new-to-brand, while 55 percent are brand-loyal past passengers, which Bernstein said was slightly higher than normal.

"Probably 45 percent of our customer deposits at this stage are still unapplied FCC's," said Bernstein. "We still have quite a few that are left to rebook, but that's not that surprising...we would expect these FCCs to turn into bookings over the next six or 12 months as cruisers look at their vacation opportunities."

On the subject of itineraries, when asked specifically about cruising to Cuba once again should restrictions against the island nation be relaxed by the Biden administration, Donald stated that all options were on the table.

"Obviously, Cuba was a focal point for the Obama administration," said Donald. "We'll obviously be well-prepared to be able to operate in whatever guidelines and rules and regulations are. People really want to go to Cuba...we'll be well-prepared when if it opens."

Donald also stated that the goal to become less reliant on new-to-cruise passengers, preferring to focus efforts on retaining loyal cruisers who know and understand the product.

"Clearly, 2020 was unprecedented," he stated. "On the other hand, it also proved to be a true testament to the resilience of our company."

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