Coronavirus concerns loom over cruise industry


By Saqib Iqbal Ahmed and Uday Sampath Kumar

NEW YORK / BENGALURU (Reuters) - The rapid spread of coronavirus disease is having a disastrous impact on the global ocean cruise industry by $ 46 billion.

Dominated by three U.S.-listed companies, Carnival Corp, Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings, the industry is under scrutiny after the virus epidemic that left a ship quarantined in Asia .

Many see Asia as a potential growth area for cruise tourism: 39 cruise lines were active in Asian waters last year, deploying a total of 79 ships, according to the Cruise Lines International Association trade group.

The long-term impact of the virus on the industry is unclear, and some analysts have warned investors against dumping cruise stocks.

"We remind investors not to press the panic button because in the year after SARS, H1N1 and Zika, Carnival and Royal both posted positive yield growth as reported, reflecting demand resilience across the sector, "said Morningstar analysts in a statement. recent note.

Authorities reported 5,090 new cases of coronavirus in mainland China and another 120 on Friday. The number of cases now stands at 63,851, with 1,380 deaths.

Royal Caribbean Cruises canceled 18 cruises in Southeast Asia on Thursday after canceling eight trips to China last week. He joined industry leader Carnival to warn that the epidemic would affect annual profits.

Graphic: cruise ships in the Asia-Pacific region

The big three in the cruise industry - Carnival, Royal Caribbean and Norwegian Cruise Line - have nearly 200 ships in their global fleet. Norwegian declined to comment on the long-term impact of the virus on its business. Carnival and Royal Caribbean did not immediately respond to requests for comment.

Graphic: Cruise companies listed in the United States

Each of these companies derives a significant share of their annual revenues from the region. China, in particular, has developed as a cruise market in recent years due to its large middle class population and the expansion of international tourism.

Graphic: Cruise companies - Asian exhibition

Carnival, which sees China as its biggest long-term growth opportunity in Asia, has been in the eye of the coronavirus storm.

The Carnival Diamond Princess has been docked in Yokohama, Japan, since February 3 after a man who landed in Hong Kong was diagnosed with the virus. With 218 passengers and crew members infected, the British-flagged vessel is home to the largest group of infected people outside of China.

Another Carnival ship, MS Westerdam, was trapped in the sea for about two weeks after several Asian countries prohibited it from docking at their ports. The ship finally docked in Cambodia.

Carnival has already suspended its cruise operations in Chinese ports. The company estimated that its profits for 2020 would drop from 55 cents to 65 cents a share if it were forced to suspend operations in the rest of Asia.

Fear of the virus has plagued the actions of all cruise ship companies in the past few months.

Graphic: the cruise company shares

Cruise ships, which gather large numbers of people in overcrowded and semi-enclosed environments, can sometimes facilitate the spread of contagious diseases such as norovirus and other gastrointestinal diseases.

The average age of a cruise customer in 2018 was 46.7 years, according to Cruise Lines International Association. The average age of people who contracted coronavirus is 55.5 years, according to a study of 99 patients in a single hospital in Wuhan, China, from January 1 to 20, as reported in the medical journal Lancet.

(Report by Saqib Iqbal Ahmed, additional report by Uday Sampath Kumar in Bengaluru; edited by Megan Davies, Ira Iosebashvili and Richard Chang)


Please enter your comment!
Please enter your name here