Silicon Investor - Carnival Cruise Lines CCL

[Jon Koplik] WSJ Opinion -- U.N. May Make Ocean Cruises More Expensive .......................

Jon Koplik — 4/23/2026 12:36:10 PM

WSJ Opinion -- U.N. May Make Ocean Cruises More Expensive .............................

Opinion

Commentary

April 20, 2026

The U.N. May Make Ocean Cruises More Expensive

An emissions proposal from the International Maritime Organization endangers the industry -- and all of commercial shipping.

By Kate Farmer

The Royal Caribbean Freedom of the Seas cruise ship

Cruise companies are spending six-figure sums on consultants to read the tea leaves of an ambitious green-energy plan from the International Maritime Organization, the United Nations shipping agency. The framework was approved in April 2025, but after pressure from a U.S.-led bloc, a final decision was postponed until October. If there’s no agreement then, the cruise industry will be in regulatory limbo -- along with all commercial shipping.

Cruise ships are some of the world’s most expensive and complex ocean vessels -- small cities on water. Each costs $1 billion or more to build and takes five to seven years to design and build, twice as long as most large cargo ships. Now cruise companies are hedging by building ships for a greener maritime future that may or may not come to pass.

The IMO’s Net Zero Framework is an aggressive regulatory package designed to push global shipping to net-zero emissions around 2050. “The plan is momentous because it would be the first internationally enforced decarbonization program,” Ella Baldwin, an energy policy consultant in the Houston office of Rystad Energy, a Norwegian research firm, says in an interview. Beginning around 2028, vessels that exceed emissions-intensity limits will pay an effective carbon tax of $100 a metric ton of excess emissions for smaller violations or $380 a metric ton for bigger ones.

The revenue the IMO generates -- an estimated $10 billion to $12 billion a year -- would go into a Net-Zero Fund to support U.N. climate-related goals such as mitigating “negative impacts on vulnerable States” and supporting “innovation . . . in developing countries.”

Sixteen of the IMO’s 176 member states, including the U.S., voted against the current proposal -- with the Trump administration threatening retaliatory sanctions, visa restrictions and commercial fees on states that endorse it. The most likely outcome is a “gradual approach to transitioning shipping away from high greenhouse gas emission fuel,” but in a way that isn’t “as abrupt or as costly as what was being proposed,” says Brett Schaefer, a U.N. expert at the American Enterprise Institute.

Even a slimmed-down version of the plan could harm cruise companies. The industry has spent billions in recent years building green-friendly vessels, but the IMO plan will hurt their bottom line. Incorporating fuel flexibility into vessels and squeezing efficiency gains wherever possible saves money. But adding dual-fuel or “fuel ready” engine systems, which can be gutted and reconstructed later if regulators force a shift away from conventional fuels, costs about $10 million per ship. That’s not including the lost revenue from the space wasted.

Popular fuel alternatives, such as liquefied natural gas and hydrogen, require double to more than triple the tank size of oil. In an industry that monetizes every square foot of space, it’s a costly gamble for regulation that may not come to pass. If even a scaled-back version of the Net-Zero Framework passes, non-compliant ships could become too costly to operate -- an unthinkable outcome for a vessel built to last 25 to 30 years.

Come October, other maritime industries may face the same dilemma if there is no final decision on the IMO plan. Commercial shipbuilders worldwide will have to decide whether to build expensive fuel-ready ships now or proceed with standard models and hope the IMO -- and other green-thumbed U.N. regulators -- abandon the effort.

While the cruise industry can absorb some losses, America’s commercial shipbuilding industry can’t afford to lose ground because of a global wealth-redistribution ploy. U.S.-flagged ships already cost more than four times as much to build and operate as international ones. Rising costs would push the industry into deeper decline and widen the gap with China, which has more than 200 times America’s shipbuilding capacity and builds more than 1,000 commercial ships annually to America’s five.

President Trump last year created an Office of Shipbuilding and recently released his Maritime Action Plan, which envisions a “Maritime Golden Age” by reviving American commercial shipbuilding, rebuilding the maritime workforce and expanding the U.S.-flag fleet. Similar efforts, such as the bipartisan Ships for America Act, are under way in Congress.

Mr. Trump will have to keep a close watch on the IMO if he wants these plans to succeed. IMO regulators know his presidency is up in 2029, so they may wait to push passage of the framework. But unless Washington secures an agreement this year, shipbuilders will be without regulatory clarity, and America’s maritime dominance could be lost to history.

Ms. Farmer is a social-media editor for the Journal editorial page.

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[Jon Koplik] Cruise line stocks sink amid cautious industry outlook ............................

Jon Koplik — 11/24/2025 9:26:08 PM

Cruise line stocks sink amid cautious industry outlook ........................................................

Investing.com

Published 11/24/2025, 04:07 PM

Carnival Corporation (NYSE:CCL) stock sank 7% Monday, leading a broader decline in cruise line shares as industry executives expressed caution about near-term challenges. Royal Caribbean Cruises (NYSE:RCL) fell 3.3% while Norwegian Cruise Line (NYSE:NCLH) dropped 2.5%.

The selloff followed comments from Carnival management during a ship visit to the company’s AIDAdiva vessel. According to Barclays analyst Brandt Montour, executives conveyed an "incrementally cautious" tone regarding investor concerns about the U.S. macroeconomic environment and elevated Caribbean capacity growth.

Montour noted that management acknowledged the recent increase in Caribbean capacity represents "some degree of headwind" for the industry. However, he added that these comments weren’t "necessarily out of line with commentary from RCL last week on our group call or RCL’s recent earnings update."

Despite the cautious outlook, Barclays maintains an overweight rating on Carnival shares. Montour highlighted that Carnival’s "broader diversification, stemming from ~36% locally sourced Europeans, coupled with ongoing turnarounds at several brands, should collectively blunt any downside risk in the N.A. Caribbean market."

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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[Jon Koplik] CNBC -- Cruise stocks tumble after Commerce Secretary Lutnick signals tax crackd...

Jon Koplik — 2/24/2025 1:29:02 AM

CNBC -- Cruise stocks tumble after Commerce Secretary Lutnick signals tax crackdown ..................

CNBC

Feb. 20, 2025

Cruise stocks tumble after Commerce Secretary Lutnick signals tax crackdown

By John Melloy and Scott Schnipper

Shares of cruise lines tumbled Thursday after Commerce Secretary Howard Lutnick suggested the Trump administration would crack down on taxes paid by the companies.

“You ever see a cruise ship with an American flag on the back?” Lutnick said in an appearance late Wednesday on Fox News.

“None of them pay taxes ... every supertanker. None pay taxes ... all foreign alcohol. No taxes. This is going to end under Donald Trump,” said Lutnick.

Shares of Carnival dropped 5.9%, Royal Caribbean lost 7.6%, Norwegian Cruise Line fell 4.9% and Viking Holdings weakened by 3%.

Analysts at Stifel Financial called the selling in cruise stocks a “massive overreaction,” and recommended investors use the slump to buy the names “on weakness.”

[T]his is probably the tenth time in the last 15 years we have seen a politician (or other D.C. bureaucrat) talk about changing the tax structure of the cruise industry,” wrote analysts led by Steven Wieczynski. “Each time it was presented, it didn’t get very far.”

[F]om a tax standpoint the cruise industry is embedded under the cargo industry in the eyes of the Internal Revenue Service,” Stifel wrote. “That would mean the entire cargo industry would have to be turned upside down even before they got to the cruise industry, which is a sliver of the size of the cargo industry.”

The cruise industry might respond by moving their corporate headquarters outside the U.S., reducing the number of jobs kept in the U.S., the report said. “With 90%+ of their business being conducted in international waters, it would then be impossible for the U.S. (or any other entity) to target the cruise operators.”

Stifel has buy recommendations on six cruise industry stocks: Carnival, Royal Caribbean, Norwegian, Viking as well as Lindblad Expeditions Holdings and OneSpaWorld Holdings

“Cruise lines pay substantial taxes and fees in the U.S. -- to the tune of nearly $2.5 billion, which represents 65% of the total taxes cruise lines pay worldwide, even though only a very small percentage of operations occur in U.S. waters,” said the Cruise Lines International Association, in a statement. “Foreign flagged ships that visit the U.S. are treated the same for taxation purposes as U.S. flagged ships visiting foreign ports, which provides consistent reciprocal treatment across international shipping.”

© 2025 CNBC LLC.

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[Jon Koplik] Bloomberg -- Lutnick’s Tax Comments Give Cruise Operators Case of Deja Vu .........

Jon Koplik — 2/24/2025 1:21:46 AM

Bloomberg -- Lutnick’s Tax Comments Give Cruise Operators Case of Deja Vu ....................

Bloomberg

February 21, 2025

Lutnick’s Tax Comments Give Cruise Operators Case of Deja Vu

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Commerce Secretary warned cruise companies may face taxation

Analysts question feasibility of new taxes even as shares fell

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By Redd Brown

Cruise operators may yet avoid paying more US corporate taxes despite threats from US Commerce Secretary Howard Lutnick to close favorable loopholes.

Lutnick’s comments on Fox News Wednesday that that US-based cruise companies should be paying taxes even on ships registered abroad sent shares lower, though analysts indicated the worry may be overblown.

“We would note this is probably the 10th time in the last 15 years we have seen a politician (or other DC bureaucrat) talk about changing the tax structure of the cruise industry,” Stifel Managing Director Steven Wieczynski wrote in a note to clients. “Each time it was presented, it didn’t get very far.”

Industry shares fell sharply Thursday. Royal Caribbean Cruises Ltd. closed 7.6% lower, the largest drop since September 2022. Peers Carnival Corp. and Norwegian Cruise Line Holdings dropped by at least 4.9%.

All three continued slumping Friday, trading lower by around 1% each.

Cruise companies often operate their ships in international waters and can register those vessels in tax haven countries to avoid some US corporate levies. It’s exactly those sorts of practices with which Lutnick has taken issue.

“You ever see a cruise ship with an American flag on the back?,” Lutnick said during the interview
which aired Wednesday evening. “They have flags like Liberia or Panama. None of them pay taxes.”

“This is going to end under Donald Trump and those taxes are going to be paid.” He also called out foreign alcohol producers and the wider cargo shipping industry.

The vessels are embedded in international laws and treaties governing the wider maritime trades, including cargo shipping. Targeting cruise ships would require significant changes to those rule books to collect dues from the pleasure crafts, analysts noted. The cruise industry represents less than 1% of the global commercial fleet, according to Cruise Lines International Association, an industry trade group.

They also pay significant port fees and could relocate abroad to avoid new additional taxes, according to Wieczynski, who sees the selloff as a buying opportunity.

“Cruise lines pay substantial taxes and fees in the US to the tune of nearly $2.5 billion, which represents 65% of the total taxes cruise lines pay worldwide, even though only a very small percentage of operations occur in U.S. waters,” CLIA said in an emailed statement.

Should increased taxes come to pass, the maximum impact to profits would be 21% on US earnings, Bernstein senior analyst Richard Clarke wrote in a note. That hit wouldn’t be enough to change their product offerings, though it may discourage future investment. Recently, US cruise companies have spent billions beefing up their operations in the US and Caribbean.

Cruise lines already employ tax mitigation teams that would work to counteract attempts by the US to collect taxes on revenue generated in international waters, wrote Sharon Zackfia, a partner with William Blair.

Royal Caribbean did not respond to requests to comment. Carnival and Norwegian directed Bloomberg News to CLIA’s statement.

© 2025 Bloomberg L.P.

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[Jon Koplik] Barrons -- Cruises Are Beating Theme Parks. It’s All About Prices .................

Jon Koplik — 8/12/2024 9:53:50 AM

Barrons -- Cruises Are Beating Theme Parks. It’s All About Prices ..................................

Barrons

Aug 08, 2024

Cruises Are Beating Theme Parks. It’s All About Prices.

By Jack Hough

Royal Caribbean's Utopia of the Seas dwarfs the older cruise ship Vision of the Seas, seen docked at Perfect Day at CocoCay, the cruise line's resort in the Bahama.

Put off by high theme park prices? Try a floating one. J.P. Morgan reckons that cruises are 20% cheaper now than land-based alternatives, versus 10% to 15% cheaper in 2019. It predicts a market share shift in favor of cruising, which is part of why it just launched coverage of Six Flags Entertainment at Underweight, while adding Overweight-rated Royal Caribbean Group to its Analyst Focus List.

Your reporter noticed sharply higher prices for admission, hotels, and restaurants at Walt Disney World in Florida as the pandemic eased. Discounts grew skimpy. Perks that were previously free -- airport bus service, parking for hotel guests, a handful of daily chances to shorten ride waits -- took on big surcharges. Walt Disney was taking advantage of ravenous demand for so-called revenge travel, while covering for steep losses from its streaming services.

Disney World prices remain high, but more recently, discounts have grown larger, and there has been some surcharge backtracking -- parking is once again free for hotel guests, for example. It’s now clear why. This past week, Disney’s results for its fiscal third quarter showed meager growth in its Experiences division, which includes parks. Management foresees flat revenue and a small decline in operating profit there during the fourth quarter. Comcast reported weak results for its theme parks, too.

With theme park prices broadly up 37% since 2019, according to J.P. Morgan, there will be limited opportunity for companies to juice results by charging more. The silver lining for Disney in particular is that its streaming operations have now reached modest profitability, and its studios are riding a record-setting summer box-office haul from Inside Out 2, an animated film featuring personified emotions. Also, its Experiences division includes its small but fast-growing cruise operations.

The outlook for cruising is brighter than that for theme parks. There are new ships, but not too many; capacity will increase 5.6% this year but only 2.3% next year. Demand is strong, with passengers booking trips further out and paying up for them. Royal Caribbean in particular looks likely to beat Wall Street growth forecasts, says JPM. Its price target is $210 a share; the stock recently went for around $154, or 13.4 times this year’s earnings consensus.

The problem for Six Flags is that its own experiment with sharply higher prices produced a disastrous drop in attendance. Market share will now be difficult to win back without aggressive discounting. A recent merger with rival Cedar Fair could yield cost cuts. But Six Flags is also years behind on capital spending on its rides. Catching up there amid minimal ticket price growth won’t be fun, or flattering for free cash flow.

Write to Jack Hough at jack.hough@barrons.com.

Copyright © 2024 Dow Jones & Company, Inc.

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[Jon Koplik] WSJ : Carnival / booking further in advance and paying more .......................

Jon Koplik — 6/26/2024 1:19:59 PM

WSJ : Carnival / booking further in advance and paying more ................................

WSJ

June 26, 2024

HEARD ON THE STREET

Carnival’s Ship Is Coming In

Cruisers are booking further in advance and paying more as berths fill up

By Spencer Jakab

Still coming off a near-death experience as a result of the pandemic, it doesn’t take much to send cruise-line investors rushing for the lifeboats.

When a Bank of America analyst warned of “modestly softer pricing” for oceangoing companies on June 14, it knocked industry-leader Carnival’s shares by 7%. But on Tuesday the company’s fiscal second-quarter results assuaged those fears and then some. Carnival beat earnings and revenue expectations handily, raised full-year financial guidance and, perhaps most important, signaled that 2025, with modest growth in industry capacity, could look even better.

Carnival’s stock was the top performer in the S&P 500 on Tuesday. William Blair analyst Sharon Zackfia was among those raising forecasts. She noted that “demand trends bode well for considerable pricing power in 2025.”

“We are hitting records on top of previous records” a positively gleeful Carnival chief Josh Weinstein said on an investor call, noting for example that adjusted earnings before interest, tax, depreciation and amortization was the company’s highest in 15 years.

Look below the waterline, though, and Carnival is a different company than it was before the day that “Covid-19” entered our vocabulary. That is why its shares remain more than 60% below their January 2020 level. Long-term debt is almost triple, and shares outstanding nearly double their levels in those happier times. The important thing now is how quickly Carnival rights its balance sheet. While its debt is still in junk territory, it was upgraded Tuesday by Standard & Poor’s to BB, two levels below investment grade.

“There will be a transfer of the enterprise value from the debt holder to the shareholder,” David Bernstein, Carnival’s chief financial officer, said in an interview.

In other words, as the company’s free cash flow is directed solely at paying down borrowings or building up cash, the share price should benefit proportionately. Maybe even disproportionately: The impact might be better than cash going to stock buybacks or dividends since it will remove a discount that still weighs on Carnival’s valuation. Many institutional investors eschew companies that recently flirted with bankruptcy.

“There are a lot of portfolios that are hesitant to book companies that are incredibly leveraged,” admitted Bernstein.

Carnival and its competitors also took on a lot of expensive debt to stay afloat during the pandemic. Simply being able to refinance some of it more cheaply will benefit their bottom lines.

Getting a better return on their huge fixed assets will speed up that process. Carnival’s net yield, an industry measure of revenue less commissions and other costs per available cruise day, increased more than expected during the second quarter and the company raised its forecast for the back half of the year.

To get a sense of how important it is, Carnival estimates in a sensitivity analysis that a 1% increase in net yield would boost its net income by $97 million in the second half of fiscal 2024. And occupancy hit 104% during the second quarter compared with 98% a year ago (some cabins hold an extra passenger).

Especially encouraging is what Carnival and its competitors can’t do now that fares and occupancy are so high: order new ships. Many less-efficient vessels were scrapped, and there will be slow growth in 2026 and 2027 as the absence of industry orders during the height of the pandemic works its way through specialized shipyards. That will lead to record free cash flow for Carnival in coming years despite projects such as outfitting a Bahamian private beach, Celebration Key, as a cruise destination -- a cost-saving and revenue-raising measure.

Even after Tuesday’s 8.7% rally, Carnival’s shares only trade at around 8.4 times enterprise value to forward Ebitda. That compares with an average of about 9.6 times in the 10 years before the pandemic. The best time to buy Carnival’s shares was when their price reflected a real threat of bankruptcy. The second best time might be now.

Write to Spencer Jakab at Spencer.Jakab@wsj.com

Copyright © 2024 Dow Jones & Company, Inc.

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[Jon Koplik] Bloomberg -- Carnival puts Miami headquarters up for sale as FL real estate soar...

Jon Koplik — 4/11/2024 12:36:55 AM

Bloomberg -- Carnival puts Miami headquarters up for sale as FL real estate soars ..................

Bloomberg

April 9, 2024

Carnival Puts Miami Headquarters Up for Sale as Florida Real Estate Soars

By Natalie Wong and Anna J Kaiser

Carnival Corp. has listed for sale its sprawling headquarters on the outskirts of Miami, seeking to cash in on real estate the cruise giant has owned for roughly three decades.

The company is now looking to downsize to about 300,000 square feet (27,871 square meters) of new office space in the Miami area, according to a person familiar with the matter, who asked not to be named citing private discussions.

Carnival expects to remain at its current headquarters in the city of Doral for the next two years. The building dates back to the 1980s and encompasses 470,000 square feet. A spokesperson confirmed that the firm is “exploring options for new office facilities.”

Carnival hired brokerage Cushman & Wakefield Plc to handle the sale, a spokesperson for the brokerage confirmed, declining to add further details. The last recorded sale of the property dates back to 1983, when it was acquired for $16.6 million.

The decision to sell reflects a broader trend of companies reevaluating their office space needs in the post-pandemic era. While some tenants are looking to upgrade their facilities to entice employees back to the office, others are downsizing to reduce costs.

For Carnival, the sale is a chance to unlock a potential windfall from decades of real estate growth in Doral, where property values have soared alongside the area’s condo boom and the popularity of Donald Trump’s Blue Monster golf course. But it will also mean the company will be navigating a red-hot market to find new office space in the Miami region.

Currently, Carnival’s Doral headquarters is about 15 miles away on gridlocked highways from the port of Miami, where Carnival ships dock.

Royal Caribbean Cruises Ltd., which unlike Carnival is based inside the port, has recently broke ground on a new 10-story headquarters building in the vicinity. MSC Cruises SA, which is building a new cruise terminal at the port, said it will move its US headquarters to a downtown Miami office building near the port as well.

Carnival’s move to upgrade its headquarters underscores how well the cruise industry has done in recent years. Carnival, one of the largest cruise companies in the world, has seen bookings bounce back to a record since the pandemic. The company has 120,000 employees globally and serves about 13 million cruise vacationers per year.

© 2024 Bloomberg L.P.

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[Jon Koplik] 3/8/24 WSJ piece : cruise industry stocks, debts taken on during pandemic .........

Jon Koplik — 3/20/2024 12:01:28 PM

3/8/24 WSJ piece : cruise industry stocks, debts taken on during pandemic .........................

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to see a few charts / photos / etc. that do not copy here, go to :

wsj.com

or

archive.is

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Jon.

**************************************************

WSJ

HEARD ON THE STREET

March 8, 2024

Cruises Are More Popular Than Ever -- and Investors Are Late to the Party

This year’s ‘wave season’ will break revenue records for cruise lines, but investors are wary of massive debts the industry took on during the pandemic

By Spencer Jakab

Still looking for an amazing deal on a cruise?

Four years after Covid-19 shut the industry down, a brief golden age of uncrowded decks and deep discounts has come to an end. With ships sailing at capacity and prime cabins selling out quickly, grabbing an offer as the industry’s traditional “wave season” winds down this month might be wise.

Investors are in more luck than travelers: Even though the lowest prices are off the table, bargains remain available in the shares of cruise lines -- especially for those not put off by a bit of choppiness.

“Wave season” is the term for the window of time at the beginning of the year when the cruise industry offers its best rates. During 2023’s season, executives were all but shouting to Wall Street that they were seeing monster demand. Analysts were slow to take the hint: More than two-thirds of those covering industry giant Carnival, for example, rated its stock a “sell” or “hold” early last year. Its shares, along with Royal Caribbean and Norwegian Cruise Line Holdings, were the top three performers in the S&P 500 during the second quarter of 2023.

Since then, though, only Royal Caribbean has been able to keep rallying, coming close to erasing its pandemic losses. The other two are still down by more than half. Further gains look likely for all three as anecdotes trickle in about what is shaping up to be the industry’s best wave season ever.

“The wind is behind their sails -- pun intended,” says Michael Erstad, a senior analyst covering the consumer sector at research firm M Science.

Cruises have long been affordable compared with land-based alternatives. That is especially true during bad economic times due to the unique economics of cruise ships -- last minute deals abound because it makes no sense to leave cabins empty. Even today, though, cruises offer a lot of bang for the buck. The all-in cost of shore-based hotels, flights, restaurant meals and vacation rentals have all risen more.

“We are nowhere near our ceiling when it comes to the price environment” says Carnival Chief Executive Josh Weinstein.

And more of cruisers’ dollars are hitting the bottom line as operators have become leaner and smarter. For example, they have gotten better at selling onboard, high-margin goodies such as drinks packages and shore excursions typically responsible for more than a third of revenue -- often before the ship even leaves port. Royal Caribbean’s CEO, Jason Liberty, gushed to investors last month that his company had 40% more pre-cruise revenue booked in 2024 than in the same period of 2023.

Another way cruise lines boost sales while also cutting costs is directing ships to their own private ports or islands. Often located a short sail from Florida, ships burn less fuel and nearly every dollar spent on drinks or souvenirs is captured by the cruise line. With many older ships retired during the pandemic, their fleets are also more fuel-efficient.

The best way to compare today’s profitability with the carefree days before the pandemic is net yield -- money left over per available passenger cruise day after paying travel agents and other operating expenses. Royal Caribbean, which recently launched the world’s largest cruise ship, Icon of the Seas, says its net yield rose by nearly 18% in constant currency terms compared with 2019 during the fourth quarter.

Things should be even better this year as passengers cruise in record numbers. One sign of a tighter market is how early they are making reservations. For example, Royal Caribbean’s cruises were being booked 202 days in advance on a rolling 12 month basis in December, according to Erstad. That was 11% longer than in the same month before the pandemic. He says that, partly as a result, pricing began a sharp improvement during 2023’s wave season that has continued.

So what’s the catch? A big one: Cruise lines had to borrow heavily to stay afloat financially when their ships were idle or half-empty. Between 2019 and the end of fiscal year 2022, net debt on the three largest cruise lines’ balance sheets more than doubled to $63 billion. All carry junk credit ratings.

But as any sailor knows, exciting things happen when you release ballast. Carnival has a set of Wall Street-friendly financial targets dubbed SEA Change. The most interesting one, “E,” stands for a 50% bump in a company-specific measure of earnings before interest, tax, depreciation and amortization by 2026 compared with what the company had been expecting last June for all of 2023. Much of that would be available to pay debt because Weinstein says the company is only taking delivery of three new ships between now and 2027.

“That is a remarkably small order book for this corporation, and that’s a good thing.”

Carnival’s free cash flow was more than $2 billion last year. Analysts polled by FactSet see it more than doubling by 2027. If Carnival meets its goals and reaches investment grade in a few years then it can also refinance expensive loans more cheaply, though much depends on how quickly the Federal Reserve cuts interest rates.

The cruise line that has made the most progress on its balance sheet and that analysts single out for navigating the pandemic best is Royal Caribbean. Its debt has been upgraded twice by Moody’s in just the past year. Though it has fewer ships and less revenue, it has gone from a market value half as high as Carnival’s in 2018 to one-and-a-half times as high today.

Royal Caribbean has momentum and is the safe choice. Investors with strong sea legs should consider Carnival, the cheapest of the bunch on a debt-adjusted basis. All three large cruise lines still trade below their 10 year average prior to the pandemic as a multiple of forward Ebitda.

Write to Spencer Jakab at Spencer.Jakab@wsj.com

Copyright © 2024 Dow Jones & Company, Inc.

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[Harshu Vyas] Seems to me some (really) short-term puts on CCL wouldn't be a terrible idea. Th...

Harshu Vyas — 2/6/2024 1:02:12 PM

Seems to me some (really) short-term puts on CCL wouldn't be a terrible idea. The Houthi situation doesn't help CCL at all! And the technicals have looked terrible since the stock "double-topped." Is it really as simple as it looks? In the long-term, I love CCL but I can't buy on no support!

[Jon Koplik] WSJ / travel / comment from United Airlines CEO ...................................

Jon Koplik — 10/24/2022 1:01:16 PM

WSJ / travel / comment from United Airlines CEO ...........................................................

From :

WSJ

Oct. 22, 2022

What CEOs Are Saying: The Fed ‘Should Look Out the Front Windshield’

Leaders from Tesla, IBM, Goldman Sachs and others discuss the economic outlook, Fed policy and business trends

---------------------------------------------------

United Airlines Holdings Inc. Chief Executive Scott Kirby:

“There has been a permanent structural change in leisure demand because of the flexibility that hybrid work allows. With hybrid work, every weekend could be a holiday weekend. That’s why September, a normally off-peak month was the third strongest month in our history. People want to travel and have experiences.” (Oct. 18)

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One would think that this is also good for the cruise industry (?)

Jon.

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[Jon Koplik] Wash. Post -- Covid is spreading on cruises again. This time, they plan to keep ...

Jon Koplik — 12/31/2021 12:33:10 AM

Wash. Post -- Covid is spreading on cruises again. This time, they plan to keep sailing .............................

December 28, 2021

Covid is spreading on cruises again. This time, they plan to keep sailing.

Despite outbreaks on ships and the omicron variant’s rise, there’s no shutdown in sight for the cruise industry

By Hannah Sampson

The cruise industry thought it had adapted to covid-19. After emerging from a 15-month shutdown with a slew of new regulations approved by the Centers for Disease Control and Prevention, ships got back on the water in late June. Carnival Corp. CEO Arnold Donald said in a December earnings call that the company had established “effective” protocols for the 65,000 workers and 50 ships back in operation.

Now, though, the omicron variant of the coronavirus has changed the climate. Through Wednesday, 91 cruise ships carrying passengers in U.S. waters were reporting coronavirus cases onboard, the most since the comeback, according to CDC tracking data. The agency said Thursday cruise lines recorded 5,013 covid-19 cases between Dec. 15 and 29, more than 30 times the size of the figure from the two-week period before that.

Over the past week of holiday travel, stories of outbreaks, customers isolating in their cabins and ports turning away ships evoked conditions that brought cruising to a halt in March 2020, albeit without the severe cases or deaths that marked the first wave of the pandemic. Cruise lines have imposed stricter measures since the omicron variant’s discovery, and no industry-wide pause appears to be in sight.

When reached by The Washington Post early this week, the CDC said it plans to allow its conditional sailing order to expire as planned on Jan. 15. At that point, the restrictions imposed for pandemic-era cruising will become recommendations.

On Thursday, the agency announced it was escalating the travel health notice for the industry from Level 3 to Level 4, suggesting that all travelers -- even if vaccinated -- should avoid taking cruises.

“CDC acknowledges that it is not possible for cruising to be a zero-risk activity,” the agency said in a statement this week. “The chance of getting covid-19 on cruise ships is high because the virus spreads easily between people in close quarters aboard ships.”

In light of the most recent outbreaks, at least one lawmaker is calling for a second shutdown on cruises.

“Time for CDC & cruise lines to protect consumers & again pause docking their ships,” U.S. Sen. Richard Blumenthal (D-Conn.) tweeted Tuesday. “Cruises are repeating recent history as petri dishes of COVID infection.”

Our warnings have proved sadly prescient & continuously compelling. Time for CDC & cruise lines to protect consumers & again pause -- docking their ships. Cruises are repeating recent history as petri dishes of COVID infection. t.co

Richard Blumenthal (@SenBlumenthal) December 28, 2021

The steep rise in passenger ships with cases onboard -- up from 73 on Monday -- is a result of a couple of factors: Cruise lines are returning more ships to service, and the omicron variant is tearing through the population on land. According to Washington Post data, new daily coronavirus cases in the United States rose by 59 percent in the past week compared with the week before.

Cruise companies restarted U.S. trips in the summer with strict protocols they said should give passengers peace of mind. Those measures evolved especially after the emergence of the delta variant in late summer to include coronavirus vaccine requirements for most or all passengers, pre-cruise testing and masking in some crowded indoor areas, even for the vaccinated.

Omicron is forcing them to adapt as the highly transmissible variant causes the largest outbreaks the industry has seen in the United States since last year. But unlike 2020, when cruising shut down worldwide, the industry is not in a tailspin. Most of the recent infections detected onboard have been mildly symptomatic or asymptomatic, according to operators and the CDC.

“I think they’re in better shape than spring 2020,” Andrew Coggins, a professor at Pace University who teaches cruise industry management, said early this week. “Much more is known about covid and we have testing, vaccines and protocols.”

Cruise lines say they are reacting to the omicron variant with additional requirements, namely mask rules indoors for everyone unless they are eating, drinking or in their own staterooms.

MSC Cruises said Tuesday that it will add -- and pay for -- an additional antigen test for all new passengers, either as they are boarding or once they’re onboard.

“The new testing measure is part of our comprehensive protocol, which is designed to adapt its measures in line with the evolution of the pandemic ashore,” the company said, adding that this includes the current surge and omicron’s rise as the dominant variant in the United States.

Some lines, including Carnival, are prohibiting smoking in casinos in the near term. And while many are encouraging passengers to get a coronavirus booster shot, they are not mandating it. The world’s biggest cruise lines, Carnival and Royal Caribbean, said crew members are getting boosters once eligible.

Bari Golin-Blaugrund, spokeswoman for Cruise Lines International Association, said in an email that the industry’s measures include a focus on providing medical care, contact tracing, isolating potential cases and other efforts to keep cases from spreading.

In response to Blumenthal’s tweet Tuesday, Golin-Blaugrund said that cases on ships in recent weeks made up just a small percentage of the populations onboard and that no setting is immune from the virus.

The CDC is investigating dozens of cases on cruise ships and advising cruise lines to require masks indoors and outside in crowded areas.

Infectious-disease experts say the rules that cruise lines have in place are very good -- but not perfect.

An infected passenger might not have enough virus to show up in a pre-cruise test but could become symptomatic during a trip, said William Schaffner, professor of preventive medicine and infectious diseases at Vanderbilt University School of Medicine in Nashville.

“With a virus that’s so contagious as omicron, it can wriggle its way through some of these barriers that we put up,” he said. “And in a rather contained population where people have intensive face-to-face contact all the time, that’s an ideal environment for a virus like this to spread.”

Gigi Gronvall, a senior scholar at the Johns Hopkins Center for Health Security, said testing for more than one day in a row would be wise before passengers board. She said she was glad to see at least some cruise lines, including Disney, requiring children as young as 5 to be vaccinated.

Thomas Russo, professor and chief of the division of infectious diseases at the University at Buffalo, had a Baltic cruise planned for this August and September that he postponed a year due to ports closing and logistics concerns.

He said that although he enjoys cruises, now is not the time for anyone who is immunocompromised or at high risk of severe disease -- advice the CDC also gives.

“I think it’s a hard pass on cruises right now” for that population, he said. “Just be patient, wait until this current wave passes.”

Jessica Justman, an infectious-diseases specialist and epidemiologist at Columbia University, has a family member on a Caribbean cruise now.

“We talked about how breakfast and lunch were meals that could be eaten outdoors on the deck,” she said. “So the only time where you have to eat indoors is at dinner.” She suggested eating that meal quickly and then putting a mask right back on.

Justman said if she were considering a cruise, she would want one that mandated vaccination and boosters for everyone, as well as testing twice a week.

So far, cruise companies and observers say they are seeing some short-term cancellations in light of the omicron surge, but solid longer-term demand has persisted.

Colleen McDaniel, editor in chief of Cruise Critic, said members of her site’s active online community are “reevaluating” what they want to do.

“What we’re seeing right now is pretty substantial discussion about it,” she said. Some plan to still go, others are planning to reschedule until the summer.

McDaniel said most have concerns: “Am I going to have fun on a cruise? Am I going to be okay if I have to wear masks in public? Am I going to be able to return easily to the United States? Am I going to get turned away from the port I want to visit?”

Ilana Schattauer, a cruise travel blogger from Montreal who runs the website and YouTube channel Life Well Cruised, posted a video Sunday about her own upcoming cruise. She leaves Fort Lauderdale, Fla., on Wednesday on Regal Princess for an eight-day Caribbean cruise with her husband and 21-year-old son.

“Our biggest concerns are being stuck on the ship or testing positive, even if we are asymptomatic or have mild symptoms,” she said in an email. “We realize that this new variant is so contagious, and even being fully vaccinated we still have a risk of being exposed. We also need to head back to Canada after the cruise, which is another complication.”

Still, Schattauer said she didn’t want to cancel. She feels comfortable with the cruise line’s mask policy and other safety measures.

“Hopefully with the stricter protocols and mask rules, we’ll see less cases than we’ve seen on a few cruise ships that have recently been in the spotlight,” she said.

© 2021 The Washington Post.

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[Jon Koplik] Cato Institute -- Alaska Delegation Targets Cruise Ship Protectionism .............

Jon Koplik — 9/22/2021 7:05:01 PM

Cato Institute -- Alaska Delegation Targets Cruise Ship Protectionism ................................................

September 17, 2021

Alaska Delegation Targets Cruise Ship Protectionism

By Colin Grabow

After decades of maritime protectionism diverting Alaska bound cruise ships (and tourist dollars) to Canadian ports, some measure of common sense may finally prevail. Earlier this week Sen. Lisa Murkowski (R-AK) announced her forthcoming introduction of legislation to ease the burden of the Passenger Vessel Services Act (PVSA) on Alaska. In so doing, Murkowski will become the second member of Alaska’s congressional delegation to target the PVSA in recent months, with Rep. Don Young putting forth a separate bill in July to loosen the law’s shackles.

It’s welcome news. Legislation to pare back the PVSA is long overdue, particularly for Alaska.

Passed in 1886, the PVSA restricts domestic waterborne passenger transport to vessels that are U.S.-flagged, U.S.-built, and mostly U.S. crewed and owned (essentially the Jones Act but for cruise vessels and ferries). But none of the large cruise ships that transport passengers to Alaska from the Lower 48 meet those conditions and must stop in a Canadian port -- making the trip international rather than purely domestic -- to avoid running afoul of the PVSA.

While a boon to Canada’s tourism industry, the PVSA comes at the expense of passengers who would rather spend their Alaska cruise actually visiting Alaska. The forced stops are also a missed opportunity for Alaska’s tourism sector as well as cruise ship operators who bear the expense of an otherwise unneeded port call. But earlier this year the law went from costly annoyance to grave threat when Canada closed its ports to cruise vessels through February 2022 -- a move that effectively slammed the door shut on visits to Alaska by large cruise ships suddenly unable to dock at a nearby foreign port.

To salvage the state’s cruise season the three members of Alaska’s congressional delegation introduced legislation -- quickly signed into law -- that effectively suspended the PVSA for Alaska voyages on large cruise ships until Canada’s ports are re opened. Having now tasted the freedom of unimpeded cruise ship access between Alaska and other U.S. ports, Sen. Murkowski and Rep. Young have decided that the situation should be made permanent.

Sen. Murkowski’s apparent plan is to exempt Alaska cruise ships carrying more than 1,000 passengers from the PVSA. While Murkowski says the exemption would expire once a U.S.-built cruise ship enters the market, in practice it would likely be permanent given that no U.S. shipyard has delivered such a vessel since 1958.

Rep. Young’s bill, meanwhile, takes a different approach. Called the Tribal Tourism Sovereignty Act, it would grant foreign status to any port owned by a federally recognized Indian tribe, either in Alaska or elsewhere in the country. Essentially, the bill would deem domestic voyages by foreign vessels to be PVSA compliant so long as they include a stop at one of these ports.

Each bill has its pluses and minuses. One virtue of Murkowski’s bill is its simplicity: vessels carrying more than 1,000 passengers that visit Alaska are exempt from the PVSA’s restrictions. But the bill is scope is narrow, both in the types of vessels that it applies to as well as geographically. That’s unfortunate, as the PVSA is not only a problem for Alaska but the rest of the country as well. It means that cruises from California to Hawaii typically include a stop in Mexico. The law also makes it impossible for large cruise ships to offer purely U.S. itineraries along the East, West, and Gulf Coasts. It has even proved a headache for vessels on the Great Lakes.

Young’s bill, meanwhile, is more expansive but brings added complications that make its benefits less clear. How many Indian tribes control ports capable of accommodating cruise ships? And how many of those are located in areas of high demand for tourism?

Either measure, however, is preferable to the absurd status quo (Canadians feel differently). Beyond ludicrous outcomes such as the diversion of ships and passengers to Canada, the PVSA’s application to large cruise ships is protectionism for an industry that is nearly non existent. The entire fleet of U.S.-flagged such vessels consists of a single ship, the Hawaii based Pride of America. And that ship was delivered by a German shipyard and is only deemed PVSA compliant due to a special waiver.

It’s regrettable that Congress was not spurred to action until the combination of a global pandemic and this ancient bit of protectionism nearly proved ruinous for Alaska’s tourism industry. But if COVID-19 and its ensuing fallout help ease the PVSA’s burden on Alaska, then it will have succeeded where basic logic has thus far fallen short.

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[Jon Koplik] WSJ -- shipping industry / difficulty / 2050 emissions-reduction target ..........

Jon Koplik — 6/1/2021 3:15:23 PM

WSJ -- shipping industry / difficulty / 2050 emissions-reduction target ...............................

Shipping Matters

May 27, 2021

Shipping’s Carbon-Cutting Fuel Tanks So Far Remain Empty

The industry faces a 2050 emissions-reduction target with choices yet to be made on what clean fuels to use

By Costas Paris

Imagine going to a car dealership for a new vehicle that’s climate friendly and being told that it isn’t clear what clean fuels will be available to fill it up, or how much those fuels will cost. You probably would walk away or opt for a car that runs on gasoline.

That’s the dilemma faced by the shipping industry as it looks to shift to cleaner vessels to meet emissions reduction goals.

The industry has agreed to boost the global fleet’s energy efficiency by at least 40% over the next decade and cut overall greenhouse-gas emissions from ship exhaust in half by 2050 compared with 2008 levels.

The difference with cars is that a cargo ship’s lifespan is around 25 years and it takes around two years to build a cargo vessel. If the owners want to meet the deadlines without crashing their operating budgets they will have to start buying zero-emission vessels within a few years, but there is no consensus yet on how green ships will be powered.

“We can build green vessels, but with no consensus on what kind of fuel will be used, the deadlines are just a theoretical exercise that can’t be met,” said a senior executive at Korea Shipbuilding & Offshore Engineering Co., one of the world’s largest yards. “First you need the fuels, then the necessary volumes and a global bunkering network that will all have to come together at a competitive price. We’re only at the start of a long and expensive process.”

The focus on new fuel sources marks the biggest change in ship power since the sector switched from coal to the high-polluting heavy oil known as bunker more than 100 years ago.

The deadlines, set by the International Maritime Organization, the United Nations marine regulator in 2018, likely will become more stringent in 2023 when the body meets to review its strategy. Shipping services provider Clarkson Research Services Ltd. has estimated that it may cost the industry more than $3 trillion for ships to switch to new forms of power.

The choices by carriers will carry high stakes for shipping customers.

Shipping executives say they would seek to pass at least some of the costs of switching fuel sources along to cargo owners. That would drive up expenses in international supply chains for big retailers like Walmart Inc. and Amazon.com Inc., mining companies, and agricultural exporters moving raw materials in bulk.

Such companies also are looking to reduce the carbon footprint across their supply chains, so they may be able to incorporate some of the cutbacks in shipping pollution into assessments of their own operations.

If there is ample supply of new fuels, freight rates for transport on green ships may be similar to the price of shipping on vessels that run on traditional oil. But industry executives say they are bracing for higher costs.

“The tricky thing is that any zero-emission alternative is so far more expensive than oil,” said Lars Robert Pedersen, deputy secretary general of Denmark-based shipping trade body Bimco. “If you have to run a ship on fuel three times as expensive as bunker oil, you are out of business. The freight rates won’t cover it because cargo owners will go with the cheapest vessel.”

The alternative fuels attracting the most attention and investment so far include ammonia and biofuels. The International Energy Association said this month that if the global energy sector reaches net-zero emissions in 2050, ammonia could account for 45% of energy demand from shipping.

The Korean Registry of Shipping said earlier this month that more ammonia plants would come on line starting in 2025, allowing production of the chemical as a fuel at an estimated $650 to $850 per metric ton. By comparison, the bunker fuel currently used averaged $454 per ton for mid-May deliveries.

Ammonia is already a traded commodity, but there are complications with using it on ships.

“Ammonia is very toxic if it spills,” Mr. Pedersen said, “It also burns poorly and it’s difficult to ignite. The ratio of ammonia versus oxygen in the combustion chamber has to be very accurate. If not, the engine will cough and stall.”

‘If you have to run a ship on fuel three times as expensive as bunker oil, you are out of business.’

Lars Robert Pedersen, deputy secretary general of Bimco

An executive at a major state-owned shipbuilder in China said ammonia-powered ships would need special ventilation systems because of the chemical’s toxicity and because engine parts like valves can corrode quickly once exposed to ammonia.

“The ship must have gas masks and personal protection equipment for everyone aboard, in case it leaks,” he said. “This means the fuel won’t work for passenger vessels. It’s too much of a risk.”

Sustainable biofuels could provide about 20% of total shipping energy needs, according to the IEA. Danish shipping giant A.P. Moller Maersk A/S will add to its network what is expected to be the first ship that will run on biomethanol in 2023 and says it plans to make its fleet entirely carbon-neutral by 2050.

Biomethanol can be sourced from paper-mill waste and other byproducts, or by mixing hydrogen with carbon dioxide trapped from industrial exhaust systems.

Palm oil and sugar cane are main sources of biofuels, raising critical environmental questions because of the impact of sourcing the materials. Farming of those materials can involve cutting back rainforests, which can have a negative environmental effect and defeat the purpose of reducing CO2 levels in ship operations.

The U.S. and the European Union both are aiming to reach net-zero greenhouse-gas emissions by 2050 as part of their commitments to the Paris Agreement on climate change.

Net-zero emissions mean that the amount of greenhouse gasses produced will be equal to the amount taken out of the atmosphere.

“With climate change in the forefront, you would expect orders of green ships to be coming in,” the state shipbuilding executive in China said. “But it’s not happening. We got blueprints and some inquiries, but the orders are for conventional ships.”

Write to Costas Paris at costas.paris@wsj.com

Copyright © 2021 Dow Jones & Company, Inc.

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[Jon Koplik] Bloomberg -- CDC Says Cruises Possible by Mid-Summer as Tensions Boil Over ........

Jon Koplik — 4/6/2021 9:55:43 PM

Bloomberg -- CDC Says Cruises Possible by Mid-Summer as Tensions Boil Over ......................................

April 6, 2021

CDC Says Cruises Possible by Mid-Summer as Tensions Boil Over

By Jonathan Levin

Agency responds after Carnival threatens to relocate ships
Shares rise on optimism that companies can resume voyages

U.S. cruises could resume by mid-summer with restrictions, the Centers for Disease Control and Prevention said Tuesday after Carnival Corp., the largest operator, threatened to relocate ships to other markets.

The agency’s signal sent shares of cruise companies rising in after-market trading, with Carnival gaining as much as 4.9%. Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. also advanced.

The industry has been pressuring the agency, saying it is restricting their return to the seas even as other hospitality industries like hotels and theme parks reopen. Earlier Tuesday, Carnival threatened to move some U.S. ships to other ports, more than a year after the industry essentially went on hiatus over the Covid-19 pandemic.

The CDC technically lifted its ban on cruises in October but issued a so-called conditional order with a multi-step process that companies must meet to sail again. They claim the process is overly burdensome, that the CDC hasn’t met its own timeline, and that the whole process treats them more harshly than other tourism-related businesses. They need about 90 days to prepare ships to sail again, and the uncertainties of the process have left them in limbo.

“CDC is committed to working with the cruise industry and seaport partners to resume cruising following the phased approach outlined in the conditional sailing order,” CDC spokeswoman Jade Fulce said in a response to questions about Carnival. “This goal aligns with the desire to resume passenger operations in the United States expressed by many major cruise ship operators and travelers; hopefully, by mid-summer with restricted revenue sailings.”

‘No Choice’

Carnival warned that its namesake cruise line won’t sit by if the CDC’s process drags on.

“While we have not made plans to move Carnival Cruise Line ships outside of our U.S. home ports, we may have no choice but to do so in order to resume our operations, which have been on ‘pause’ for over a year,” Christine Duffy, president of the company’s namesake Carnival division, said in a statement Tuesday.

The brand is extending the suspension of U.S. operations through the end of June. But under current government restrictions, management essentially had no choice. The company’s Seabourn luxury division announced plans on Tuesday to restart cruises from Greece in July.

The cruise industry in recent weeks has called on the CDC to let voyages from U.S. ports resume by Independence Day, when President Joe Biden has said the country can return to a version of normal. Florida Governor Ron DeSantis, whose state is home to the major lines and a gateway port for Caribbean cruises, added to their voices.

Norwegian Cruise Line Holdings Ltd., the No. 3 player, said Monday it plans to start cruising from U.S. ports on July 4 with fully vaccinated guests and crew.

Cruise Lines International Association, the lobbying group that represents most of the companies, wants the CDC to drop the conditional framework completely and guarantee that sailings can start by July.

© 2021 Bloomberg L.P.

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[Jon Koplik] WSJ / "latest" on Royal Caribbean / Could Pay Down Debt After Share Sale ..........

Jon Koplik — 3/2/2021 1:01:08 AM

WSJ / "latest" on Royal Caribbean / Could Pay Down Debt After Share Sale .................................

March 1, 2021

Royal Caribbean CFO to Bolster Liquidity, Could Pay Down Debt After Share Sale

The cruise operator is offering 16.94 million shares at $91 apiece

By Nina Trentmann and Dave Sebastian

Royal Caribbean Group’s finance chief plans to use the proceeds from a $1.5 billion share sale to boost the cruise operator’s liquidity and, potentially, to reduce its debt, which ballooned during the pandemic.

The Miami-based company, which is nearing the first anniversary since it stopped sailings in North America, said Monday it has launched an equity offering of 16.94 million shares at $91 apiece. The sale is expected to close Wednesday and provide Royal Caribbean with additional funds, Chief Financial Officer Jason Liberty said.

“We are always evaluating and opportunistic about accessing the capital markets. We saw an opportunity here,” Mr. Liberty said.

The fresh capital could help the company pay down its debt, Mr. Liberty added, noting that “last year, we took on a lot of debt.”

Royal Caribbean’s net debt rose more than 42% to $16.45 billion in 2020 from the prior year, according to S&P Global Ratings, a data provider and ratings firm. The cruise operator, which ended 2020 with about $4.4 billion in cash, expects to burn through between $250 million and $290 million a month during the hiatus, Mr. Liberty said. Royal Caribbean last week reported a net loss of $5.8 billion for 2020, compared with net income of $1.9 billion in 2019.

Royal Caribbean has suspended sailings on most of its ships through at least April 30. Its peers Carnival Corp.’s Carnival Cruise Line and Norwegian Cruise Line Holdings Ltd. have scrapped U.S. sailings through the end of May. Mr. Liberty declined to comment on whether Royal Caribbean would extend its sailing suspension.

The timing for resuming U.S. voyages ultimately depends on obtaining a permit from the U.S. Centers for Disease Control and Prevention, which requires operators to conduct mock sailings and apply for permits at least 60 days before offering passenger cruises. Mr. Liberty said Royal Caribbean is in touch with the CDC, but declined to comment further.

A CDC spokesman last week said no cruise operator has held mock voyages or applied for a permit, as the CDC has yet to publish technical instructions for agreements between cruise operators and port and local health authorities.

Canada recently extended its cruise ban by a year to February 2022. Royal Caribbean is currently considering if and how it could offer travel to Alaska and New England despite the Canadian ban, Mr. Liberty said.

Mr. Liberty will see some more cash coming in when the company’s sale of its Azamara business closes. Royal Caribbean in January said it had agreed to sell the cruise line to private-equity firm Sycamore Partners for $201 million in cash. “Every dollar counts,” Mr. Liberty said about the transaction.

He declined to comment on how much Royal Caribbean would need to spend on health and safety measures once it resumes the majority of its operations. “The range is too extreme to provide an estimate for it,” Mr. Liberty said. Competitor Norwegian has said it has put aside about $300 million for health and safety efforts.

Royal Caribbean’s equity offering was received positively by S&P. The ratings firm said the stock sale would provide the cruise operator with “a liquidity cushion to support its ongoing cash burn while operations remain suspended and as they gradually resume.”

The proceeds also could help Royal Caribbean reduce its leverage levels, S&P said.

S&P last week downgraded its issuer-credit rating on Royal Caribbean further below investment-grade. Mr. Liberty said Royal Caribbean wants to return to an investment-grade rating, but didn’t provide a specific timeline for that.

Write to Nina Trentmann at Nina.Trentmann@wsj.com and Dave Sebastian at dave.sebastian@wsj.com

Copyright © 2021 Dow Jones & Company, Inc.

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[Jon Koplik] Bloomberg -- Billions in New Cruise Ships Are Ready to Sail, With Nowhere to Go ...

Jon Koplik — 11/17/2020 3:48:27 PM

Bloomberg -- Billions in New Cruise Ships Are Ready to Sail, With Nowhere to Go ................

November 17, 2020

Billions in New Cruise Ships Are Ready to Sail, With Nowhere to Go

Around the world, cruise lines are cutting the ribbon on extremely expensive new vessels -- then keeping them indefinitely docked.

By Fran Golden

Normally, when a new ship wraps construction at a shipyard, it’s cause for a party, with executives in sharp suits and free-flowing Champagne. But when the sparkling 596-passenger ultraluxury ship Silver Moon joined Royal Caribbean Group’s elite Silversea Cruises brand in late October -- the culmination of a $380 million, 20-month project -- there was little pomp and circumstance. No media were on hand at the Italian shipyard to ooh and ahh over such exquisite design features as bespoke Lalique panels in the French restaurant and handcrafted Savoir beds in the top suites.

This time, even Royal Caribbean’s top brass bowed out of the celebration and teleconferenced from Miami. And the ship’s handover, in Ancona, Italy, came with a cringe. After all, Silver Moon has nowhere to go. With border restrictions and a second wave of the Covid-19 pandemic freezing all kinds of travel, she may have to wait at least until spring to make her maiden voyage -- and start turning any kind of profit.

“It’s very painful in many ways,” says Jason Liberty, Royal Caribbean Group’s executive vice president and chief financial officer. “All this energy -- whether it’s design, creating unique activities and venues -- obviously you’re investing money as well, and you take delivery of the ship and you can’t do what you do best: delivering the best vacations in the world.”

Liberty isn’t alone in his frustration. At least 10 ships -- ranging in cost from $75 million to near $1 billion -- have wrapped construction amid the pandemic, representing an industry investment of more than $3.84 billion. Three additional vessels debuted at the beginning of the year. Most are stuck in holding patterns until the U.S. Centers for Disease Control and Prevention and its counterparts around the world greenlight a return to cruising.

All Dressed Up, With Nowhere to Go

At this point last year, 2020 had been predicted in the cruise world as the beginning of a boom decade for ship building. According to trade publication Cruise Industry News, the year started with 117 cruise ships on order by 2027, a new record in the history of cruising. After all, the industry’s fast-growing popularity -- 32 million projected cruisers in 2020, up from 30 million in 2019 -- made new tonnage feel like a foolproof bet. Now it just feels like a sunk cost, adding to billions of dollars in quarterly losses that some companies were already experiencing.

Entirely new brands, such as the adults-only Virgin Voyages and the luxe Ritz-Carlton Yacht Collection, may be among the hardest-hit. They’ve invested in multiple ships, with no previous revenue to defray costs, only to have their first planned year of operation wiped out. Worse, they cater to a new-to-cruise market that may be especially skeptical in the post-pandemic world. (Both debuts have moved to 2021.) Also launching next year is new luxury expedition brand Atlas Ocean Voyages -- which has added complimentary Covid-19 health insurance to its all-inclusive fares.

Boom Gone Bust

Of the 13 ships that have wrapped construction in 2020, few have carried guests. In addition to Silver Moon, they include the French-built, 2,918-passenger Celebrity Apex -- whose high-tech features such as an off-the-ship “Magic Carpet” platform drove the cost up to nearly $1 billion -- and the 100-passenger Silver Origin, which will sail the Galapagos region with butler-serviced suites.

Many of these debuts should have been media juggernauts for the ships’ parent companies, none more so than Windstar Cruises’ first “stretched” ship, set to debut later this month after being cut in half and getting stitched back together with 84 feet added to its midsection. The major transformation of the 312-passenger Star Breeze -- which adds 50 suites to each deck -- has been anticipated for two years; now, it will get shown off quickly via video feed and remain docked, indefinitely, at its shipyard in Sicily.

“Who would have thought a year ago that you would bring out a ship and not immediately put it into operations?” says Christopher Prelog, president of Windstar Cruises. Originally set to sail on June 29 before a delivery delay, Star Breeze will now be held in place until the end of March, costing Windstar roughly $1 million a week in lost fares.

Silver Linings

On the plus side, Prelog says that virtual handovers avoid the last-minute stress of scrambling to get a ship ready for guests. “The focus now is to maintain it so that when the guests do come on board, it still has that sparkly and newness factor to it.”

Then there are construction delays, which usually come as bad news. They’ve been common this year, because of temporary shipyard shutdowns -- good news these days, given that executives rarely sign the biggest checks until the job is done. Some vessels were delayed up to 10 months, with more than two dozen now slated to debut in 2021. That should help minimize cash drain until sailings resume, which may not happen until well into next year, depending on border reopenings and whether the industry can prove operations are safe before a vaccine is widely rolled out.

Plus, brands will be armed with plenty of buzz whenever it’s safe to set sail again. New ships such as Carnival’s forthcoming 5,282-passenger Mardi Gras, outfitted with the first roller coaster at sea, tend to draw loyalists who want to be the first onboard, as well as new-to-cruise travelers looking to try the latest and greatest.

Will all this new-ship buzz help the industry recover from last winter’s images of hazmat-suited health officials investigating shipboard Covid-19 outbreaks? Barbara Muckermann, Silversea’s chief marketing officer, says it will, and she'll have an unprecedented three ships to showcase next year. “New ships provide a lot of marketing excitement, and I think that’s needed,” adds Liberty.

Still, that’s only true if she and her peers can persuade the market that cruising is safe -- a looming question mark, given that at least three small-ship companies have already experienced Covid-19 outbreaks aboard vessels since resuming sailing this summer, even in the face of stringent precautions such as operating in a so-called “bubble” in which all guests quarantine and get PCR-tested before boarding.

Glitz and glamour is great, says Windstar’s Prelog, who adds that “safe to cruise has to be the main message.”

© 2020 Bloomberg L.P.

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[Jon Koplik] Bloomberg / For Carnival, ‘Death on the High Seas Act’ Protects the Bottom Line ...

Jon Koplik — 9/24/2020 3:17:19 PM

Bloomberg / For Carnival, ‘Death on the High Seas Act’ Protects the Bottom Line .................

Updated September 23, 2020

For Carnival, ‘Death on the High Seas Act’ Protects the Bottom Line

By Christopher Yasiejko

For passengers killed by virus, payout may be just burial cost
Century-old maritime law limits damages for shipping industry

Carnival Corp. is poised to dramatically curb monetary damages for passengers killed by the coronavirus under the latest court decision to side with the company.

If a ruling Monday by a Los Angeles federal judge is followed by others, it could offer the cruise line something of a safe harbor under the Death on the High Seas Act. The century-old federal law limits payouts for survivors to “pecuniary” damages such as how much the deceased contributed through wages or housework. One maritime lawyer said that in the case of retirees, who make up a large portion of Carnival’s customers, the recovery may amount to little more than burial costs.

The subject of the ruling was a 71-year-old man who died in April after allegedly contracting Covid-19 while cruising on the Coral Princess. His family was trying to keep its wrongful-death lawsuit in state court, where they were seeking punitive damages as well as recovery for other losses. But the judge said the only way to proceed was under federal law.

The ruling comes as Carnival and other major cruise lines including Royal Caribbean Cruises Ltd. are seeking a nod from the U.S. Centers for Disease Control and Prevention to return to sailing after the CDC’s “no sail” order expires at the end of the month. The industry, one of the most heavily battered by the virus, is putting in place new rules to entice vacationers back onto its boats, announcing through a trade group this week that it will require Covid-19 tests for guests and crew. Masks will be mandatory whenever social distancing isn’t possible.

Carnival’s Princess Cruise Lines Ltd. declined to comment on pending litigation. Shares in the company were up by as much as 4.44% after markets opened in New York and had leveled to $14.53 at 10:35 a.m. Before Wednesday, the stock had declined 72% this year.

“Princess Cruises has been sensitive to the difficulties the Covid-19 outbreak has caused to our guests and crew,” spokesperson Negin Kamali said in an email. “Our response throughout this process has focused on the well-being of our guests and crew within the parameters dictated to us by the government agencies involved and the evolving medical understanding of this new illness.”

Princess Cruise Lines already scored a significant victory in another case by convincing a judge that mere exposure to Covid-19 doesn’t give passengers grounds to sue for emotional distress.

In the case in which the court ruled Monday, the family of Wilson Maa tried to argue that the federal law didn’t apply because he died after returning to shore -- not while at sea.

1920 Law

But U.S. District Judge Dale Fischer agreed with Carnival’s argument that where he died was irrelevant because the alleged negligence occurred “on the high seas beyond 3 nautical miles from the shore of the United States.”

“It is clear from the face of the complaint,” the judge wrote in Monday’s ruling, that the deceased passenger “contracted Covid-19 on the ‘high seas.’”

Lawyers for Maa’s estate didn’t immediately respond to a request for comment.

“Basically, the question to the widow is, ‘What did it cost you to lose your husband?’” said Charles Naylor, a lawyer who specializes in maritime injury and death. “‘If it didn’t cost you anything, we don’t owe you a nickel.’”

Naylor, who in his own practice is not taking on Covid-19 cases, said the 1920 law is “very out of step with modern wrongful-death statutes.”

Naylor said that if the ruling survives a likely appeal, the vast majority of Covid-19 cases among cruise line passengers will proceed under the 1920 law, “which will strictly limit the damages.”

In another Los Angeles case over the virus outbreak on the Coral Princess, a North Carolina passenger contends Carnival had detailed knowledge of the threat posed by a contagion, but jeopardized public health when the ship “seeded the shores of California” with infected passengers.

That passenger says in her recently filed revised complaint that the Coral Princess has had “significant viral outbreaks at least eight times since 2004.”

The wrongful-death case is Maa v. Carnival Corp. & Plc, 20-cv-6341, U.S. District Court, Central District of California (Los Angeles).

© 2020 Bloomberg L.P.

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[Jon Koplik] ( long) Bloomberg piece / Ruby Princess / Spread Coronavirus Around the World .....

Jon Koplik — 9/24/2020 2:50:24 PM

( long) Bloomberg piece / Ruby Princess / Spread Coronavirus Around the World .............................

September 15, 2020

The Carnival Cruise Ship That Spread Coronavirus Around the World

How were hundreds of infected Ruby Princess passengers allowed to disembark in Sydney and return to homes from Tasmania to Florida?

By Matthew Campbell

At about 6 a.m. on March 19, William Wright, a retired Australian mortgage broker, woke up feeling a little off. He had a cough and his nose was running, though it didn’t seem too bad. In any case, there was no time to linger in bed. Wright and his wife, Lucia, had just docked in Sydney after a 10-day journey around New Zealand on the Ruby Princess, a 950-foot, 1,542-cabin vessel operated by Carnival Corp.’s Princess Cruises subsidiary. The couple’s disembarkation time was 8:05 a.m., so they quickly packed up and had breakfast. They arrived on schedule in the Explorers Lounge, the nightclub where they’d been told to assemble with other passengers leaving at the same time.

Unloading a cruise ship is a complex process, and delays aren’t unusual. But the Wrights waited only a short while before being told they could go. They made their way through the corridors, past crew members waving goodbye and offering high-fives. Getting through Sydney’s Overseas Passenger Terminal took only a few minutes. Despite the accelerating Covid-19 pandemic, Australian officials had cleared the Ruby to disembark without restrictions. Passengers didn’t even need to show their passport, let alone get their temperature checked. The only paperwork was an immigration form that border guards glanced at before waving people through.

By 8:30 the Wrights were on the street, where 2,600-plus passengers had begun filtering into taxis, commuter trains, and densely packed airport buses. “I am a regular traveler overseas by flights and cruises,” Wright later said in a statement to investigators. “I have never experienced something so fast.”

The decision to allow the Ruby to dock would have profound consequences. The ship turned out to be the single most important vector for the coronavirus in Australia, accounting at one point for more than 10% of the country’s cases. In Tasmania two cruisers were the probable source of an outbreak so severe it forced a major hospital to shut down. Other infected passengers flew to the U.S., where some ultimately died. The crew, meanwhile, became virtual prisoners on their own vessel, some unable to return home for months.

Although multiple cruise ships recorded large numbers of Covid-19 cases in the early stages of the pandemic, the Ruby was unique, and not simply because 28 people died of the illness, the most of any voyage. Two other notorious Carnival ships -- the Diamond Princess, which was sealed off for weeks on a Japanese pier, and the Zaandam, which sailed up the entire west coast of South America looking for a country that would allow it to dock -- were vessels that guests couldn’t leave. The Ruby was the opposite, the incubator of a devastating outbreak discovered only after passengers were on dry land.

In an emailed statement, Princess said that “our highest responsibility and our top priority is always the safety, health, and well-being of our guests, crew members, and the people in the communities we visit,” and that it fully complied with public-health guidance throughout the Ruby’s travels. “As new information became available from global health authorities, we continually adapted our policies and protocols to reflect the latest updated thinking with respect to Covid-19.” When the Ruby initially set sail, the company said, “there was no reported community spread of Covid-19 in Australia.”

That changed emphatically after the ship docked. Until then, the country, with its isolated geography and excellent health-care system, had seemed poised to escape the worst of the pandemic. The ensuing fiasco has prompted a series of efforts to figure out what went wrong and whom to blame. The New South Wales government convened a high-profile public inquiry, and police are in the midst of an investigation led by homicide detectives. Lawsuits by passengers are also under way. Everyone is trying to answer a central question: How, at a moment when governments around the world were on high alert, were hundreds of infected people allowed to stroll off a cruise ship and into the heart of Sydney?

Circular Quay might be the most spectacular place in the world to begin a sea voyage. Lying at the foot of Sydney’s financial district, it’s bound on one side by the Rocks, one of the continent’s earliest European settlements. Beyond that is the soaring arch of the Harbour Bridge and, just opposite, the white concrete sails of the city’s famed opera house.

None of the thousands of passengers who crowded the quay’s cruise port to board the Ruby on March 8 appeared deterred by the growing alarm over the novel coronavirus. Although Australians were getting nervous -- shops in Sydney had begun to run out of hand sanitizer and canned food, and arrivals from China, Iran, and South Korea had been banned -- the country had only a handful of cases. In New Zealand, where the 13-day cruise was heading, there were even fewer.

Stephen and Rosie Keal, retirees from Tasmania, arrived around 12:30 p.m. to start a voyage celebrating Rosie’s 70th birthday. Shortly after they reached the terminal, Princess made an announcement: Boarding would be delayed until at least the late afternoon. “We went up to Circular Quay and found a nice little pub,” Stephen recalls. “The whole discussion, as you can imagine, was about this virus. And we unfortunately took the attitude, ‘Oh, this won’t happen to us, the rates are very low.’ ” Rosie posed for photos with the Ruby’s bow overhead; Stephen wanted to edit them so the hull would read “Princess Rosie.”

What they didn’t know was that at dawn that morning, just after the ship pulled in from its previous cruise, a government epidemiologist named Kelly-Anne Ressler had boarded with seven other staff. They carried suitcases full of masks, gloves, and testing swabs. The New South Wales health agency wanted to screen arriving passengers who appeared to be at risk of having Covid-19, whether because they’d reported respiratory symptoms or had recently been in an affected country. Ressler was shocked by the number she found gathered in a dining room -- more than 300, in all. She and her team handed out masks, took temperatures, and asked about travel histories. They decided to test nine people for the virus and allow the others to disembark. Until the results came in, a doctor told the crew, new passengers shouldn’t be allowed on board.

At 5:30 p.m., the tests came back: all negative. The Ruby was cleared to depart on its next cruise. Boarding proceeded, and the ship left its berth late in the evening, easing past the Opera House and out of the harbor. Some guests watched from their balconies, the lights of the city fading as they reached the open Pacific.

Diane Fish, a travel agent from Delray Beach, Fla., would have been content to spend the two-day passage to New Zealand sleeping. She’d been on the road since late February, leading a group of clients through a packed itinerary around Australia. But the cruise was part of the trip, so she settled into her usual roles as tour director and social convener, checking out the onboard entertainment and making sure everyone was having a good time.

The bad news from overseas was mounting. Italy had imposed a nationwide lockdown on March 9, and President Trump soon imposed an unprecedented ban on European arrivals to the United States. Fish wasn’t too anxious, given that she was thousands of miles from any known outbreak. “It just did not occur to me that we weren’t safe where we were,” she says. But she did ask a colleague to be prepared to help rearrange her group’s travel if the cruise was halted in New Zealand.

There was plenty to occupy passengers on the way across the Tasman Sea. Launched in 2008, the Ruby was far from Princess’s newest or biggest ship, but it was still impressive. It had 19 decks, four swimming pools, and dozens of restaurants and attractions, many of them arrayed around a central atrium called the Piazza -- inspired, as Princess’s marketing copy optimistically put it, “by the vibrant squares of Europe.” The Ruby’s Italian captain, Giorgio Pomata, was the commodore of the entire Princess fleet.

After arriving in New Zealand, the ship passed first through Fiordland, a region of spectacular mountain bays in the far southwest, before stopping in Dunedin. The Ruby then began port-hopping northward, with the final stop, in the Bay of Islands, planned for March 18.

On March 15, the Ruby stopped in Napier, on the edge of North Island wine country, and throngs of passengers spilled into town, hitting souvenir shops and piling onto tour buses. The same day, Australia’s prime minister, Scott Morrison, announced that his country was significantly stepping up its efforts to keep out the coronavirus. Everyone arriving from overseas would have to spend 14 days in isolation, no matter where they were traveling from. Cruise ship arrivals from foreign ports would be banned as of midnight.

No one at Carnival’s regional office was sure what the announcement meant for vessels such as the Ruby, which was carrying a large number of Australian passengers. But that evening an announcement went out over the ship’s public-address system: The cruise would head straight back to Sydney.

Stephen Keal, an accomplished sailor, had been tracking the Ruby’s progress online, and he soon noticed the bridge crew was flooring it, traveling at 24 or 25 knots instead of the 18 or so on the way to New Zealand. In the aftermath of the Diamond Princess, Carnival managers were well aware of what could happen to the ship if it was delayed. “We don’t want to get yourselves stranded anywhere or have a protest at a port due to cruise ships in the region,” a Sydney-based executive wrote to Commodore Pomata.

The passenger experience, meanwhile, remained largely unchanged. With social distancing still a novel concept outside of China, restaurants, bars, and other attractions stayed open. Crowded St. Patrick’s Day celebrations went ahead.

Back in Sydney, officials were assessing whether and how to let the Ruby dock. The state government’s criteria for determining whether a cruise ship could be carrying the virus were based on where passengers had traveled previously, where they’d been on their current trip, and, crucially, what share of them had reported “influenza-like illness,” or ILIgenerally understood to refer to a fever and respiratory symptoms. If the number exceeded 1% of the guests and crew, and if onboard tests for influenza showed that not to be the culprit, a vessel might be deemed high-risk and everyone kept on the ship until coronavirus swabs could be tested by an onshore lab. A medium-risk landing -- such as the Ruby’s March 8 arrival, flagged in part because some passengers had been in Singapore -- involved a more flexible menu of responses, whereas in a low-risk scenario passengers could disembark normally.

On the morning of March 18, the day before the Ruby was due to arrive, Ressler, the government epidemiologist, was copied on an email from the ship’s senior doctor, Ilse von Watzdorf. It answered a list of questions about passenger travel histories and conditions, noting that medical staff had collected swabs for “a few cases of ‘febrile, influenza test negative’ individuals.” Von Watzdorf had attached the required spreadsheet listing the names, conditions, and temperatures of passengers with flu-like symptoms.

The decision on how to treat the Ruby lay not with Ressler, but with a separate panel of public-health experts. They didn’t find the numbers alarming. Many patients had come to the medical clinic during the journey back, but that might have been explained by announcements instructing passengers with coughs or other respiratory issues to get checked, rather than because the virus was spreading. No one had recently been to the highest-risk countries, and the ILI ratio was a bit below 1%, with a considerable number of people testing positive for the flu. The panel determined that the Ruby was low-risk but advised that swabs from some of the symptomatic passengers be tested for coronavirus, just in case.

On board, things were getting weird. As the boat neared port, Percy Anderson, a 75-year-old from Queensland, entered an elevator to find a heavyset younger man in a hoodie zipped all the way up to cover his mouth and nose. The woman with him was wearing a surgical mask, and both appeared to be having trouble breathing. Anderson and his wife, Esther, “exchanged a glance but didn’t say anything,” he later told investigators. Another passenger, Paul Reid, recalled going to the clinic with a cough and sore throat; he said a doctor swabbed his nose and soon told him “you don’t have corona.” Reid assumed that meant he was negative for Covid-19, but the medical team had no ability to perform such a test.

Fish was still hoping to relax. She booked a treatment at the spa in anticipation of the long journey back to Florida. Afterward she felt strange -- stiff and so tired that “I didn’t want to get up the next day.” She figured it was the fatigue of the trip catching up to her.

Late on March 18, a call came in to Vessel Traffic Services (VTS), the office responsible for managing movements in Sydney Harbor. Someone from the state ambulance service was on the line, requesting an update on the Ruby. A port manager, Cameron Butchart, found the call unusual. Ambulances were frequently dispatched to cruise arrivals, given the medical problems that could befall elderly passengers, but the office rarely got a heads-up. Butchart called back to find out more. “We’ve got two bookings here for Carnival Australia for a cruise ship that’s coming in at 2:30 with two suspected corona patients on board,” an ambulance coordinator told him. “We just wanted to know if the ship was actually coming into port, and if [they’re] allowed to disembark.” The ambulance official said they’d reached out to their contact at Carnival but got only voicemail.

Alarmed, Butchart hung up and started calling people at Carnival. No one answered. He emailed a colleague and asked him to stop the Ruby from docking. “Advise the ship that their booking is denied,” he wrote. “They’re to have their agent contact Sydney VTS urgently.”

Port officials ultimately reached Carnival staff. According to investigative documents, they said they’d requested the ambulances for a passenger with severe leg pain and another with cardiac trouble, not because of suspected coronavirus infections. Given that and the health agency’s designation, the port authority agreed that the Ruby was clear to land. At 2:30 a.m., it moored at Circular Quay. Disembarkation would begin first thing in the morning.

“I hear the lady in front of me cough. Two seconds after that, the guy behind me coughs. Then the guy to my right. And I said to my husband, ‘Everyone on this bus is sick’ ”

By 9 a.m. the sidewalk outside the terminal was dense with passengers. Anderson and his wife had a flight later that day to Brisbane, so they took a packed bus to Sydney Airport. They were in the check-in queue when they noticed a commotion behind them: A woman had collapsed. Anderson immediately recognized her and the man kneeling at her side as the pair he’d seen laboring to breathe in the Ruby Princess elevator. Paramedics soon arrived with a stretcher.

Fish had also boarded a bus to the airport with other passengers. “I sat down, leaving some space,” she says. “And I hear the lady in front of me cough. Two seconds after that, the guy behind me coughs. Then the guy to my right. And I said to my husband, ‘Everyone on this bus is sick.’ ”

Meanwhile, Ressler was waiting for the results of the swab tests from the Rubymost of them for passengers who’d already scattered. That afternoon she logged on to an online lab portal to check if they were done. They weren’t. They hadn’t even been registered in the system. She phoned the lab and was told they’d be tested soon.

Early the next morning she logged in again. Three of the swabs, she saw, were positive. One was from a crew member still on board. Another was from a Tasmanian guest. The third was from a woman named Lesley Bacon, who’d been one of the patients taken off in an ambulance, suffering from leg pain. (Von Watzdorf had told health authorities that both passengers also had respiratory symptoms.)

The Ruby, Ressler was learning too late, had been anything but low-risk. The state government rushed to deploy contact tracers while officials convened conference calls to figure out what had gone wrong. Time was growing short to contain the spread.

Toward the end of the day, Ressler noticed something odd: Some of the people who’d been tested for coronavirus weren’t on the list of symptomatic passengers and crew sent on March 18. By this point there were at least four positive results, including one for the other patient who’d left in an ambulance. Ressler sent a WhatsApp message to von Watzdorf. “Do you have an updated ARI log?” she asked, referring to acute respiratory illness. “Some of the later people swabbed aren’t on the one I have. Did you add any more patients after you sent it to me?”

Von Watzdorf responded six minutes later. “I’ll send it now. Sorry, I forgot that the last one was from the morning. It was so crazy.” The updated numbers weren’t drastically higher, but they did differ in one crucial respect: The ILI ratio was almost 1.3%, well above the 1% threshold that indicated a higher level of risk. The Ruby had also been updating a separate government platform with information on reported passenger illnesses until early evening on March 18, but Ressler later testified that she wasn’t aware of that data.

“I keep on asking myself what I could’ve done better to protect people,” von Watzdorf wrote to Ressler that night.

Ressler replied almost immediately. “Yeah, there will be more cases. Probably a lot.”

The Ruby’s passengers were all over Australia and beyond, having in some cases caught the final flights before international borders closed. Carnival had provided officials with a list of emails and phone numbers so everyone could be reached, but the details weren’t all correct, and some passengers didn’t pick up their phones or had turned them off. By the evening of Friday, March 20, contact tracers had managed to reach only 44 of the 570 international guests they’d tried. Over the weekend, Qantas Airways reported to officials that 170 “close contacts from the Ruby Princess” had flown to the U.S. on March 21. It was only the following night that the Australian Border Force put Ruby passengers on a list that would prompt a “do not board” alert at check-in desks.

Fish had been unaware of the positive cases when she boarded her flight back to the U.S. on March 19. She found out only when she landed in San Francisco for her connection to Florida and some of her group got contact-tracing calls. As it happened, she’d begun feeling sick herself. Really sick. The airport was almost deserted, and she found an isolated bench, laid down her head, and went to sleep. “I knew I had a fever. I just sat away from everyone else, and I wanted to get tested as soon as possible,” she says.

After getting home, Fish slept for almost 12 hours straight. When she woke up she found an urgent-care center that could test her. The results confirmed her suspicions: She was positive. Her husband turned out to be, as well. “I was in bed for 10 days,” she says. “It knocks you out. All you want to do is sleep and sweat.”

Positive tests from the Ruby were popping up all over Australia, too. Wright, the former mortgage broker, thought he had a cold when he reached his home, south of Sydney, so he took some flu pills and an antihistamine. Two days later a friend who’d also been on the cruise called. Her husband had been taken to the hospital in an ambulance, suffering from complications of Covid-19. The Wrights got tested; both were positive. They recovered without complications.

Another two Ruby passengers, Graeme Lake, a 72-year-old Vietnam veteran, and his wife, Karla, were self-isolating at home near Brisbane. They’d heard on March 20 that a friend who’d been on board had tested positive for the coronavirus. Karla had a dry cough herself, but that wasn’t unusual; it was a side effect of medication she took for her arthritis. Still, the couple went to a makeshift clinic outside a local hospital. The staff wouldn’t give Graeme a test, because he didn’t have symptoms, but Karla got one. She also had a fever, and the hospital kept her to wait for the results.

The next morning, Karla called to tell Graeme she’d tested positive. He soon noticed he was also getting sick“lousy, like a cold, heavy in the chest,” he later told police. It seemed to be getting worse, and the next week an ambulance brought him back to the hospital. He had the virus, too. The next day he was moved into the same room as Karla, who was “coughing terribly,” he said. “It was shocking.” Soon she was in the intensive care unit, where she could get more oxygen. Graeme moved with her, taking a bed a few feet away.

In the early hours of March 29, he stopped hearing the sound of her breathing. He got up and took her hand to feel for a pulse. “I could tell then that she had passed away,” he said. He stayed with her for a while, then went back to his own bed, unsure what to do next. “I had just watched my wife die, and there was nothing I could do.”

In Hobart, Keal, the Tasmanian retiree, had also tested positive. At home one day, he says, “I got up, had breakfast, and couldn’t lift my head off the table.” An ambulance brought him to the hospital, where doctors sent him to the ICU and put him on a ventilator. He has only vague memories of what followed, a period of heavy sedation and lurid dreams. At one point he woke up with doctors and nurses gathered around his bed. “I remember the fear around me, just the sheer panic,” Keal says. “I was almost crying, asking, ‘Am I going to be all right?’ And I could tell from the answers that I wasn’t.”

Keal’s wife, Rosie, and their daughter came to see him for what they feared would be the last time, donning gowns, masks, goggles, and gloves to enter the room. Their son was reluctant to come. He didn’t want his final memory of his father, an athletic man who’d competed nine times in the notoriously difficult Sydney-to-Hobart sailing race, to be of him hooked up to a ventilator, sensors, and IV drips.

Keal spent 11 days that way before finally recovering. Months later he still isn’t feeling like himself. He’s often short of breath, has trouble sleeping, and struggles with severe pain in his hands. “I reckon out of the six that we went with” on the cruise, Keal says, “I was the fittest. And yet look at how I came out.”

“We thought it was a holiday from then on. A cruise without passengers -- it was really exciting,” a crew member recalls. But soon, another said on Facebook, it felt like “a five-star floating prison”

Only one group aboard the Ruby was treated almost from the start as potential carriers of the virus. Its 1,000-plus crew members, many from countries like Indonesia and the Philippines, weren’t allowed to disembark in Sydney. “There are thousands of people, potentially, in cruise ships off our coasts that aren’t members of our state, and if we take them in, then that could well flood our system,” said Mick Fuller, the New South Wales Police Force commissioner. “It’s time to go to your port of origin.”

But that directive was all but meaningless for a company like Carnival, a tangle of financial engineering that’s incorporated in Panama and the U.K., operates out of Miami, and flags its ships in tax havens such as Bermuda, the Ruby’s nominal home port. For the moment, those on board would remain while the company figured out where it could sail.

With the passengers gone, the crew became, in effect, their own guests. On March 19 a “sail-away party” took place around one of the pools, with the Sydney skyline towering above. There was a dance performance, and an emcee promised “a great cruise” ahead. “It has been a challenging time, but you have done an amazing job,” he said. It seemed, to some at least, as if it were the beginning of a well-deserved break. “We thought it was a holiday from then on,” says Byron Sodani, an Italian fitness trainer who’d been working on the ship since January. “A cruise without passengers -- it was really exciting.”

But it was also a cruise without a destination. The Ruby soon left the harbor to wait offshore, where its medical staff attended to an increasing number of personnel with respiratory symptoms. A Filipino crewman, who asked not to be identified because he feared consequences for speaking to the media, recalls that more and more of his colleagues were being transferred from their cramped shared accommodations to passenger cabins where they could more easily isolate. There were several dozen on the first day of moving, then hundreds more over the next couple of days. “It was very scary, because you don’t know what’s going on,” the crewman says. Only the sickest staff were permitted to return to Sydney for treatment.

With opposition politicians and trade unions raising the alarm about conditions on the Ruby, Australian officials in early April allowed it to dock -- not at Circular Quay, where it would be in full view of much of Sydney, but at Port Kembla, an out-of-the-way industrial harbor. There, the ship became, as Paul Holmes, a British pianist on board, put it in a Facebook video, “a five-star floating prison.” Almost everyone was confined to quarters, permitted to open the door only to accept food or attend to medical needs. Police officers and soldiers guarded the pier. One night detectives came aboard in head-to-toe hazmat gear to seize the vessel’s black box-style data recorder and other evidence.

The state government was desperate to resolve the situation. “I’ve drawn a line in the sand and I want this ship gone,” Fuller told the Australian. But sending it back to sea full of Covid-19 patients would have been unconscionable. By mid-April more than 10% of the crew had tested positive. It took until late in the month to arrive at a solution. Everyone on board was tested, with a substantial number of those whose samples came back negative permitted to depart by air. Sodani disembarked within hours of being cleared for departure. He was taken to the Sheraton in central Sydney, where he remained until flying out to Doha and on to Rome.

Staff from poorer countries had a more difficult time. Despite protests by sympathetic groups who argued that Australia should help them get home, about 500 crew -- largely from developing nations with limited ability to organize repatriation efforts -- stayed on the Ruby to sail to Manila, the capital of one of the few countries admitting cruise ships to their waters. The Filipino crewman was relatively fortunate, permitted to disembark on April 23 so he could take a charter flight from Sydney; other staff endured the two-week boat trip to the Philippines, then waited weeks for permission to come ashore.

Even so, the crewman had to spend more than three weeks quarantined in a Manila hotel before he was allowed to begin the 18-hour ferry journey to his home province. He was quarantined for a further two weeks there. He was finally free on June 4, 77 days after the cruise’s guests disembarked.

The Ruby Princess is now anchored off the coast of Malaysia. It’s not yet clear whether anyone will be held to account for what happened on board. In all, at least 663 guests and 191 crew are known to have been infected with coronavirus. The 28 people who died20 in Australia and eight in the U.S.represent a toll twice as large as that of the Diamond Princess, the vessel that recorded the next-highest number of fatalities. Barring stupendous negligence on some future voyage, the Ruby is likely, when the history of the pandemic is written, to retain the distinction of having incubated its deadliest marine outbreak.

The New South Wales Police Force is still engaged in a lengthy investigation, while lawsuits in Australia and California are in their early stages. The public inquiry, led by a prominent Sydney lawyer, published its report on Aug. 14, finding that Carnival and the Ruby’s medical staff had generally complied with public-health requirements. It did say that von Watzdorf should have made sure public-health officials were aware of how many sick passengers had arrived after she sent her initial disease logan “oversight” that, if avoided, might have changed outcomes. Whether the company should have been operating ships at all, given what was already known about the virus and cruises, wasn’t part of the inquiry’s brief.

The report’s sharpest criticism was reserved for the process the government used to clear the Ruby to dock, which it said was marked by “serious errors.” It called the decision to deem the vessel low-risk “as inexplicable as it is unjustifiable.” Ressler, the state epidemiologist, had broken down in tears while testifying. “We did what we could,” she said, her voice unsteady. “If we could do it again, it would be very different.” After the report’s release, Princess issued a statement expressing “profound sorrow” about the deaths. New South Wales Premier Gladys Berejiklian said she wished to “apologize unreservedly” for “mistakes” by health personnel.

Nowhere were the tragic consequences more apparent than in northwest Tasmania, an economically struggling, largely rural corner of Australia’s smallest state. The first sick passenger from the Ruby Princess arrived at the North West Regional Hospital (NWRH), in the town of Burnie, shortly after the vessel got back to Sydney. Another was admitted about a week later. By early April, an investigation by the state health authority found, one or both of them had likely become “the original source” of a chain of Covid-19 cases among nurses and other care personnel. Some continued to work while experiencing symptoms, and the virus spread rapidly among departments, infecting staff and patients alike. Unable to contain the outbreak any other way, on April 12 the Tasmanian government announced it would shut down the hospital, ordering employees and their families into an immediate 14-day quarantine. Military doctors had to fly in to handle emergencies. In all, 138 people in the region were infected, 10 of whom died.

The outbreak was random in its cruelty. One couple, Bill and Adrienne Krist, had lived in the northwestern part of the island for more than 40 years. They’d met in Sydney when Adrienne was still a rebellious teenager hanging out in a red-light-district pub and Bill was in the navy. The bar was the first watering hole he’d spotted after his ship docked one day. They were soon married and later moved to Ulverstone, a midsize town about a half-hour’s drive from Burnie. They raised three daughters in a house with a view out to sea. Bill worked on a tugboat, and at the end of the day Adrienne could tell when he’d be home by how far out he was.

At 79, Bill was slowing down. He had emphysema and needed an oxygen tank to breathe comfortably. “Other than that he was in pretty good nick. He was still enjoying life,” Adrienne says. “We were enjoying our old age.”

In early April, Bill told Adrienne he wasn’t feeling well and ought to go get checked out. She drove, and as they left home she asked Bill whether he wanted to go left -- to Burnie and the NWRH -- or right, to a hospital in another town. He preferred the Burnie road, a scenic route that traces the edge of the Bass Strait, so “that’s the way we went,” Adrienne says.

The hospital admitted Bill right away. At first there were “no obvious virus precautions,” she recalls. But when he took a turn for the worse a few days later, she was told she’d have to go. “I said, ‘No, I stay.’ And then they put me in one of those yellow gowns, gloves, shoe covers, big goggles over my spectacles.” At one point, she says, “I bent down to kiss him, and a nurse came over and just about put her hand in front of my face.” Still, Adrienne refused to leave. “We’d made wedding vows, and we believed in what we said, so when they wanted to shuffle me out, I said, ‘No, I can’t go. If he’s dying, I have to stay.’ ”

Bill died on April 10, the day after the couple’s 57th wedding anniversary. Adrienne was told only near the end that he’d been diagnosed with Covid-19, almost certainly acquired while he was in the hospital“secondhand or thirdhand from the Ruby Princess,” as she now knows. At first, she found it hard to understand how the virus could have made it all the way to her isolated corner of the world. “I thought, ‘That comes from cruise ships. And we haven’t even been near a cruise ship.’ ”

-- With Jason Scott

© 2020 Bloomberg L.P.

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[Jon Koplik] Bloomberg -- How to Make Cruises Safe Again? Operate in a Bubble ..................

Jon Koplik — 8/21/2020 12:28:13 AM

Bloomberg -- How to Make Cruises Safe Again? Operate in a Bubble ................................

August 19, 2020

How to Make Cruises Safe Again? Operate in a Bubble

Lindblad Expeditions’ formula involves no human contact, no busy ports, and lots and lots of nose swabbing.

By Fran Golden

Adventure cruise operator Lindblad Expeditions thinks it’s cracked the code for safe cruising during a pandemic: Shelter passengers in a moving bubble of protection from viruses, prestart to finish. Chief Executive Officer Sven Lindblad says guests would not only travel together but also quarantine in the same hotel -- isolating for long enough to get two negative Covid-19 tests per passenger before departure. The company hopes to restart cruises in Antarctica as soon as November.

Lindblad is not the first cruise line to begin operations again, but it’s the most thorough in its approach. In mid-July, Norway’s Hurtigruten thought it had the magic ticket to return to sailing safely, only to have its public-health procedures immediately break down. After two weeklong, 400-passenger sailings to the Arctic, dozens of crew and guests tested positive for the virus.

MSC Cruises, meanwhile, returned to the Mediterranean Sea on Aug. 15, having required all of its travelers to undergo an antigen swab test directly before boarding. How that pans out remains to be seen.

As a purveyor of expedition travel, Lindblad is especially well-positioned to make its virus-free bubbles work. Its fleet of 10 small ships focuses on underpopulated, naturally pristine places, minimizing (or even eliminating) the need for human interaction at its various ports of call.

Constructing the Cruise Bubble

This is Lindblad’s plan: Say the Smiths, party of two, want to go on a once-in-a-lifetime cruise to see penguins, whales, and icy landscapes in Antarctica. They book a trip on the new, 126-passenger National Geographic Endurance -- a cutting-edge vessel noteworthy for its smooth ride, fuel efficiency, and reduced emissions.

Five days before they leave their home in the U.S. -- for logistical reasons, the cruises will only be available to Americans at first -- the Smiths will be required to have a PCR nasal swab test at a facility in their hometown, chosen with Lindblad’s help if necessary. Assuming their result is negative, they’d then travel to a jumping-off point somewhere in the 48 contiguous states, where, upon arrival, Lindblad would issue another Covid-19 test (either PCR or the quicker-but-less-reliable antigen test, depending on local turnaround times).

Their noses sufficiently prodded, the Smiths would spend a mandatory night at a designated hotel, where Lindblad would reward them with room-service dinner, allowing them to quarantine from their fellow travelers while they await next steps.

Having the second test before joining the group eliminates false negatives, says Dr. David Lorber, Lindblad’s consulting physician. And quarantining in between the two tests means anyone who does have the virus would not have interacted with other passengers. (Infected passengers would be sent home and likely refunded, though details are still being finalized.) Although it’s possible that someone could get a false negative on the second test and / or contract the coronavirus en route to the departure city, Lorber’s probability modeling shows it to be unlikely.

With their health clearances in order, the Smiths would ride in a carefully sanitized van to join their fellow vacationers on a private charter flight to Ushuaia, Argentina, where their ship to Antarctica awaits. Costs would be mostly unaffected by the privatized flights, which will average out to the same price as commercial or just slightly higher. Every aspect of the group’s travel would be tightly controlled, including by the Argentine government, which will have to open its borders to Americans for the trips to proceed.

All the same protocol would apply to the crew. “Any break, a crew member just zipping into a drugstore to pick up some shaving cream, that’s all it’s going to take,” Lorber says. “You can’t have that.”

Onboard Changes and More Testing

Lindblad’s ships will sail at about 80% capacity -- the volume determined by them appropriate for social distancing.

Still, the Smiths would be required to wear masks in public areas and when out exploring on Zodiacs (but not while paddling single or double kayaks). Some shipboard facilities would be closed, such as the buffet, hot tubs, and infinity pools. Dining, gym access, and visits to the bridge to hang out with the officers would be staggered. In addition to strict housekeeping standards, the facilities would literally clean themselves; Lindblad has coated its ships with ACT CleanCoat, a veneer that automatically breaks down microbes and allergens on contact.

There would be a physician on board and likely a nurse, too. And each day, guests and crew would be required to undergo temperature checks and fill out health questionnaires.

“You can count on everybody saying, ‘Joe, the waiter was coughing this morning,’ or you can ask Joe to fill out a form every day and make sure he isn’t coughing. But you want to encourage both,” Lorber says. Those with symptoms would be tested and, if the results are negative, tested again within a 48-hour period, using tests that can be analyzed right in the guest’s room.

At some point during the voyage, which could last anywhere from two weeks to 35 days and start from $15,000 per person / double occupancy, guests would likely receive at least one more round of testing -- with any positive results sending the guest and their close contacts into dedicated quarantine cabins.

Lindblad is still preparing for a worst-case scenario. As such, its ships will be equipped with a ventilator that the staff doctor will be trained to operate, and a medical evacuation plan -- currently being developed by the International Association of Antarctic Tour Operators (IAATO) -- will include prearranged agreements with local hospitals.

Of course, in Antarctica, there’s no such thing: Once you’re beyond the Drake Passage, the only air ambulance is from King George Island to Punta Arenas, Chile. In the event of a large outbreak, the ship would have to turn back.

No Local Contact

Staying away from people is easy in Antarctica. The only human interaction might come at research stations, which Lindblad used to include on weather-permitting trips. Now the company is planning not to visit them until scientists agree or the pandemic fully subsides.

In other destinations where Lindblad soon hopes to again operate its 48- to 148-passenger ships, such as Baja, Mexico, the Galápagos Islands, and Tahiti, civilization would be avoided -- which flies in the face of some of the line’s sustainability goals.

“It’s a conundrum,” says CEO Lindblad. “We want to provide [local communities] with some economic value.” Selling local artwork shipboard may be one way, he says; other ideas are under development.

These workarounds will likely be necessary well into 2021. Even if there’s a vaccine, it wouldn’t be 100% effective, explains Lorber.

And yet, about 40% to 45% of the company’s past guests have indicated they’re ready to cruise again. Says Lindblad: “I think there will be an acceleration of interest in places that are remote. That just naturally feels safer to people. Bouncing around big cities, not so much.”

© 2020 Bloomberg L.P.

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[Jon Koplik] Bloomberg -- The World’s Cruise Ships Can’t Sail. Now, What to Do With Them ? .....

Jon Koplik — 7/9/2020 8:36:07 PM

Bloomberg -- The World’s Cruise Ships Can’t Sail. Now, What to Do With Them ? ...............

July 8, 2020

The World’s Cruise Ships Can’t Sail. Now, What to Do With Them?

Hurricanes, humidity, expired permits -- they’re all costly threats to empty ships.

By Fran Golden

Hundreds of people lined the banks of Glasgow’s River Clyde a few weeks ago for the rare sight of a small, high-end cruise ship sailing upriver -- practically into the heart of the city. The Azamara Journey thrilled socially distanced onlookers by blasting its horn, typically a heralding of lively celebration. But this time nobody was there to wave on the deck of the 700-passenger ship, aside from the couple dozen members of its skeleton crew. This was no celebratory arrival, after all: it was a vessel on life support, just like every other ship dealing with the pandemic’s brutal wake.

Since mid-March, only a small handful of the world’s 400-or-so cruise ships have been able to accept passengers -- all on hyper-local itineraries. A few dozen are sailing the world with purpose, repatriating crew members from every corner of the globe. The rest are sitting idle in cruise ship purgatory, unable to sail commercially for the foreseeable future. (In the U.S., the industry has agreed not to resume business at least until Sept. 15.)

The problem for many cruise lines? Idling through the pandemic isn’t just bad for the company’s bottom line, it’s a potential death warrant for their costliest assets: the ships themselves. From mechanical issues to hurricane risks to regulatory hurdles that can constitute criminal offenses, it’s a quagmire that the industry has never faced on this scale before.

The expense is staggering. In a recent SEC filing, Carnival Corp. -- whose nine brands comprise the world’s largest cruise company -- indicated that its ongoing ship and administrations expenses would amount to $250 million a month once all its ships are on pause. With the company saying it’s unable to predict when cruises resume, that’s a long-term line item on a balance sheet that logged $4.4 billion in losses in the second quarter alone.

Here a Ship, There a Ship

As with airplanes, the first issue with maintaining an idle cruise ship is simply finding a place to park it. As many as 16,000 planes have been grounded in the pandemic, hiding out in dry and rust-proof places that range from hangars and airport tarmacs to desert boneyards. Ships are similarly scrambling to find the right conditions to weather the storm.

There’s not enough port space for every ship to dock at once, especially for huge ships that ordinarily carry up to 8,880 passengers and crew. This explains the celebratory sounds of the Azamara Journey’s “homecoming” in Glasgow (it docked at a cargo port rather than its usual cruise berth further outside the city). Less lucky vessels have had no choice but to drop anchor at sea, occasionally stopping into the nearest port for provisions and fuel.

This week, a cluster of 15 ships from Carnival Cruise Line, Royal Caribbean, and Celebrity Cruises was hanging out near the Bahamas, according to Cruisemapper.com, a ship-tracking site. The 6,680-passenger Symphony of the Seas, the largest cruise ship in the world, was off the Dominican Republic.

According to Bill Burke, a retired U.S. Navy vice admiral and Carnival’s chief maritime officer, getting the company’s 105 ships to their pause destinations -- 20 in the Caribbean, 40 in Europe, 35 in Asia, and 10 in the eastern Pacific -- is a process that will stretch into the third quarter of the year.

High Maintenance

Parking is just the first pain point. To keep things shipshape and avoid costly repairs (much like how your battery might die if you leave your car sitting too long), the vessels must also be kept operating.

“Modern cruise ships are not designed or built to just be turned off and left at a pier,” says Monty Mathisen, managing editor of Cruise Industry News. “You are talking about massive amounts of machinery, electronics, and even steel that needs maintenance, checking, and preventative work.”

That mostly involves one of two scenarios, referred to in the industry as “warm” or “cold” layup.

In warm layup, most systems are kept functioning; in cold layup more are shut down, such as ballast tanks, turbines, and gear boxes. Cold layups come with extra precautions, too, such as sealing off external doors and windows, moving linens to a dry place, putting mattresses on edge, opening all dresser drawers and closets, and sealing bathroom fixtures, to name a few.

An advantage to warm layup is ships can quickly be put back into operation. Once the word comes down, Burke says, the ship can resume carrying guests within weeks -- though it will still need to get a full crew onboard and sail to the appropriate destination.

But warm layup requires more upkeep, and therefore more staff. Each ship has a “safe manning” team -- about 120 crew members for a large ship. Among the necessary personnel, according to Carnival’s Burke: a deck crew to drive the ship, an engineering crew to run the electrical power and propulsion, a medical team to tend to staff needs (particularly in the time of Covid-19), security, and enough housekeeping and kitchen staff to keep everyone looked after and fed.

In the event of hurricanes or other bad weather, the ships have to be able to move. They also have to comply with environmental, safety, and other regulations or risk stiff fines, criminal charges, and other penalties, says Burke. In 2016, for example, Carnival received a five-year probation and a $40 million fine on a criminal pollution conviction.

But there’s a time limit on this half-on strategy: According to shipping analysts at maritime intelligence company Lloyd’s List, warm layup is only appropriate in the short term. After as little as six months, ships may lose certain certifications that allow them to sail legally.

A Ship Out of Water

Cold layups require fewer systems to run, and therefore, as little as 40 crew members: a bridge team, engine room operators, fire wardens, and hotel staff. But grinding operations to a near-halt makes it more difficult and expensive to restart. According to Lloyd’s Register’s layup guide, every corner of a ship, from the pump room to the living quarters, needs to be inspected for things like gas leaks and mold; electrical equipment, including the navigation systems, need to be removed from safe storage and reinstalled ; and dehumidifiers all need to be removed before furniture and soft goods can be cleaned and put back in place. That’s why cold layups are seen as advantageous only in the event of an outage stretching to many months.

Burke says Carnival could move in this direction in the long term. According to Mathisen, Royal Caribbean has already committed to this tact. Its fleet is largely being protected by dehumidifiers -- deployed everywhere from engine rooms to public areas.

When they’re ready to set sail again, the restart “can take weeks to months,” he explains, detailing delays that range from transporting crew back to the ship, going through bureaucratic recertification processes, or even financing expensive dry dock repairs.

A more drastic option is tying up the ship, shutting down all systems, leaving only some emergency generators running and a few fire safety crew and watchmen on duty. Cruise historian and writer Peter Knego paints a grim picture of what can happen in that scenario.

“The first thing that goes is the plumbing,” Knego says. “If you don’t have the plumbing active and somebody’s actually flushing toilets and running water through the system, rust sets in, the pipe starts to disintegrate, and then you have major problems.”

HVAC systems and wiring are next to go. “And then just the fact they are laid up in salt water, salt air, decaying everything very quickly,” Knego explains. “You literally have to tear the infrastructure to make repairs if a ship has been idle for too long.” With long-term layups, issues like rot start to crop up.

If that sounds like a slow and painful death, some companies are just ripping off the Band-Aid instead. In its second-quarter financial filing, Carnival said it plans to retire at least six older ships, which could potentially be sold another cruise company or for scrap -- usually for anyone’s best offer. Costa Cruises brand’s 24-year-old Costa Victoria is reportedly destined for a scrapyard. A ship out of water is, alas, worth less than the sum of its parts.

© 2020 Bloomberg L.P.

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[Internship] forbes article: Well, It displeases me utmostly to be the bringer of bad news, y...

Internship — 6/21/2020 2:27:47 AM

forbes article: Well, It displeases me utmostly to be the bringer of bad news, yet it seems that corona-cation will extend itself on a volunteer basis for at least 4 months again.

Cruise Lines, Facing Record Losses, Extend Suspension Of Sailing Until September

Sergei Klebnikov Forbes Staff
Markets
I cover breaking news, with a focus on money and markets.

TOPLINE While cruise stocks have recently been rebounding amid optimism about reopening the economy, the industry remains paralyzed by the coronavirus pandemic for the foreseeable future, with major cruise operators facing big quarterly losses and on Friday announcing that they’re extending their suspension of sailing.

Cruise operators are still hopeful that customers will return in 2021.

RHONA WISE/AFP VIA GETTY IMAGESKEY FACTS

Major cruise lines like Carnival, Norwegian Cruise Line and Royal Caribbean Cruises have voluntarily extended their suspension of voyages out of U.S. ports from July 24 until September 15, the Cruise Lines International Association announced on Friday.

Amid the shutdowns caused by the coronavirus pandemic, shares in the three major cruise operators have plunged between 55% and 70% so far this year.

Carnival, the world’s largest cruise operator, on Wednesday reported a record loss of $4.4 billion in the second quarter. Revenue fell 85% to $700 million from the same period a year earlier.

The cruise operator said that it expects to burn through about $650 million per month during the second half of 2020, but Carnival had $7.6 billion of liquidity as of May 31, which leaves it enough cash to survive into next year without resuming sailing.

The dismal financial results are yet another example of how badly the coronavirus pandemic has impacted the cruise industry, with fleets of all the major cruise operators under a no-sail order from the Centers for Disease Control and Prevention since mid-March.

Cruise stocks all plunged on Wednesday, for instance, after Norwegian Cruise Line first extended its suspension of voyages by two months, cancelling all departures until at least October 1.

But all the big cruise companies remain hopeful that customers will return in droves once lockdowns are lifted: Carnival, Royal Caribbean and Norwegian have all said that demand and forward bookings for cruises in 2021 remains strong.

CRUCIAL QUOTE“Although we had hoped that cruise activity could resume as soon as possible after that date [July 24], it is increasingly clear that more time will be needed to resolve barriers to resumption in the United States,” according to the CLIA’s press release.

WHAT TO WATCH FOR Many cruise operators are concerned about customers asking for refunds on cancelled voyages, instead of taking credits for future trips. With cruises having been suspended for months, big operators are now in survival mode, raising liquidity to cover their cash burns. According to Carnival, “approximately half of guests affected have requested cash refunds” as of May 31.

KEY BACKGROUND Over the last month, cruise stocks have rebounded strongly amid optimism on Wall Street over a reopening of the economy and faster than expected recovery. Carnival shares are up 28%, Royal Caribbean 36% and Norwegian 50%. But over the past week, cruise stocks have been hard-hit again, falling around 10% as investors grow increasingly concerned about a resurgence in coronavirus infections across the country. Some U.S. states reopening have recently reported record numbers of new cases, including Arizona, Texas, Florida and California.

forbes.com

[Jon Koplik] Bloomberg -- Cruises Are Coming Back. Here’s What They’ll Look Like ...............

Jon Koplik — 5/24/2020 1:11:27 AM

Bloomberg -- Cruises Are Coming Back. Here’s What They’ll Look Like ..................

May 22, 2020

Cruises Are Coming Back. Here’s What They’ll Look Like

Yes, cruising is returning -- as soon as June. But it'll sure look different.

By Fran Golden

While hotels across the world are struggling to keep the lights on, the cruise industry is already planning for initial trips to depart in several weeks. Amid the Covid-19 coronavirus pandemic, however, that will look considerably different from what regular cruisers have come to expect. Among other changes, pre-boarding health checks and masks will be in, and self-serve buffets will be out.

Perhaps most notable, the first itineraries won’t get you to a different country each day. Post-pandemic sailing will stay closer to home -- or at least, home port.

But first, given the early spread of Covid-19 among some ships’ passengers and crew, any line restarting cruises will have the daunting task of convincing customers that their health and safety will be sufficiently safeguarded.

Cleaner, Safer, Smaller Cruising

The Centers for Disease Control and Prevention (CDC) currently has a no-sail order for U.S. waters aimed at ships carrying more than 250 passengers and crew, in effect until at least until July 24. This means that smaller, boutique ship companies will get to blaze a trail ahead of the major players.

“The fact that we only sail on domestic rivers has definitely provided a greater opportunity to resume our operations in a responsible, safe, and timely manner,” says John Waggoner, the founder and chief executive officer of American Queen Steamboat Co., whose American Duchess carries only 166 passengers and 70 crew down the Mississippi.

In announcing the company’s plans to return in late June with “Antebellum South” itineraries, Waggoner detailed new safety protocols that include pre-boarding temperature checks, limited-capacity shore excursions, and an end to self-serve buffets. These changes are likely to be echoed by big-ship cruise companies that have yet to reveal their plans. But guests on American Queen’s riverboats will have an additional benefit: quick, guaranteed access to regional U.S. health-care systems. Passengers who become sick or feverish at any point during their trip will be removed from the ship and transferred to a local hospital, ensuring better medical care and minimizing risk for other passengers.

Competitor American Cruise Line is also looking for a June restart on the lower Mississippi and along the Columbia and Snake rivers out west -- initially operating two boats at 75% capacity with new health protocols in place, according to a spokeswoman. Those protocols include hourly sanitation rounds and the availability of full personal protective equipment, including face shields and gloves, for all passengers and crew. The company plans to sanitize all luggage before it comes on board, shift all dining away from buffets, and provide disposable covers for much-touched items such as TV remotes.

Cleaning standards reflect the most improvement, industry-wide. Colorado-based Avalon Waterways, which focuses on river sailings in Europe and Asia, is eyeing a September return; its ships have taken installation of electrostatic and UV disinfection systems that will help crews sanitize public spaces hourly. In Norway, Hurtigruten, whose ships also carry cars and cargo to remote coastal communities, says the line will add “hundreds of small and larger measures” to keep guests and crew safe and healthy -- including reduced guest capacity, to allow for social distancing, and strict hygiene protocols. (The specifics of those measures have yet to be disclosed.)

The first and only big ship company to lay out enhanced health measures thus far has been Hong Kong-based Genting Cruise Lines. In April, it announced that its Star Cruises and Dream Cruises ships, which may start sailing as soon as July, will have infrared fever screening and sanitizing fogging protocols, whereby entire rooms will be sprayed with disinfecting mists. In addition, guests aged 70 and older will be required to have a doctor’s certificate stating they are fit to travel. (Crystal Cruises, also part of Genting’s portfolio, may set sail as soon as August, though it has made no announcements regarding health procedures.)

New, Limited Routes

The U.S. focus on Mississippi River trips is part of a broader trend of regionalized, limited itineraries. In Europe, expect to see tried-and-true itineraries cut down to component parts. On the Danube, for instance, trips may stop short of Bratislava and Budapest, sticking to reopened Germany and Austria. Even some ocean voyages will focus on a single country, such as Norway, where they’ll spend more time at fewer ports or out at sea.

[ Note from Jon : "more time at fewer ports or out at sea" -- is this some kind of I.Q. test trick question ? ]

Across the board, the details of where people can sail and what they'll be able to do in the process are still being ironed out.

The focus on cruising in just one country isn’t entirely a response to border closures, though they present ongoing challenges. (In an extreme example, the Seychelles, off Africa’s east coast is banning cruises until 2022.) The first players returning to sea are reckoning with sparse air connections, which means cruisers eager to hop aboard need to be close enough to drive to departure points.

“It’s a lot like what happened immediately after 9/11,” says Andrew Coggins, a cruise expert and professor of management at the Lubin School of Business at Pace University. “Back then, ports of call suddenly became home ports because people were reluctant to fly.” In other words, cruise companies are diversifying departure points so more consumers can board a ship without having to board a plane.

Border closures present thornier issues for the industry’s giants, which helps explain why the most familiar names will take longer to return. A majority of these companies' ships are registered outside the U.S., which subjects them to a 100-year-old U.S. law called the Jones Act. Under those provisions, foreign-flagged ships must include at least one international port of call for every U.S.-based voyage. That means that destinations that cruisers may feel comfortable with, such as wide-open Alaska, will remain inaccessible, thanks to border closures in Canada, where such trips need to touch land.

The Big Unknowns

While its operations remain grounded, the world’s largest cruise brand, Carnival Cruise Line, has also been busy developing its own approach to America, planning to link three Florida and Texas home ports to any Caribbean destination it’s allowed to visit. But that’ will depend on the CDC lifting its cruising ban in July -- and Caribbean ports welcoming the vessels.

Both are questionable. Thus far, Carnival and its competitors, including Royal Caribbean and Norwegian Cruise Line, have been mum regarding their onboard health plans -- or how they might handle future outbreaks. The CDC is expected to collect proposals from these companies about post-pandemic protocols before it issues new guidelines.

Pace University’s Coggins says the lines are probably watching as restaurants and movie theaters set the tone on best practices. Sit-down dining may replace buffets, and show productions may add matinees to allow for social distancing in shipboard theaters, he says. To deal with the possibility of a second wave of Covid-19 infections, “they may have to set up some kind of flying [medical] squad that can be airlifted to the ship,” Coggins adds.

Looking for “Normalcy” in Europe

In Europe, where border restrictions are starting to loosen, ocean sailings may resume with short itineraries no longer than a week, focused more on days at sea than visiting many ports. That’s according to Jens Skrede, managing director of Cruise Europe, a business-to-business network of ports and destinations.

Local and national authorities have yet to sign off on such plans. Even as international flights begin to connect the EU’s Schengen countries, ocean cruising remains at a standstill. Skrede predicts that Baltic and Scandinavian ports will be among the first to turn on the lights. “In general, the Northern part of our region seems to have the Covid-19 situation a bit more under control,” he says, adding that sailings may not reach a critical mass until 2021.

Norwegian line Hurtigruten hopes to be the exception; it seeks to open tourism in its home country by mid-June and in the Arctic before the end of summer. “Step by step, the pandemic is being brought under control,” said CEO Daniel Skjeldam in a prepared statement. “Gradually restarting operations within Norwegian waters are natural first steps towards a normalization for us.”

The same is true for German line A-Rosa, which is looking to re-launch Rhine and Danube itineraries in June. Boutique line CroisiEurope may also fire up its 22-passenger barges in mid-July, focusing first in France, its home country. Says Michael DaCosta, the company’s general manager for North America: “As the year goes on, we will be able to open up more ships. But that depends on border restrictions, local guidelines, and -- of course -- customer demand.”

© 2020 Bloomberg L.P.

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[zax] Carnival's stock follows biggest-ever quarterly selloff with a 23% plunge finan...

zax — 4/1/2020 5:53:18 PM

Carnival's stock follows biggest-ever quarterly selloff with a 23% plunge

finance.yahoo.com

Shares of Carnival Corp. plunged 23% on heavy volume Wednesday, as cruise operator followed up its worst-ever quarterly performance with its biggest one-day drop in two weeks. Trading volume swelled to 84.9 million shares, already nearly double the full-day average of 42.8 million shares. On Wednesday, Carnival said it launched a $1.25 billion public offering of stock, and offerings of a total of $4.75 billion worth of notes. Carnival's stock had plummeted 74.1% in the first quarter, much worse than the previous record quarterly decline of 48.1% over the first quarter of 2000. Wednesday's selloff comes as part of a sharp selloff in the broader stock market, as President Trump's warning that a "very, very painful" two weeks lies ahead sent the Dow Jones Industrial Average tumbling 820 points, or 3.7%. Other cruise operators also took a beating, with shares of Royal Caribbean Cruises Ltd. shedding 14% and Norwegian Cruise Line Holdings Ltd. losing 9.2%.

[zax] Rating Action: Moody's downgrades Carnival's senior unsecured rating to Baa1, ra...

zax — 3/11/2020 8:19:38 PM

Rating Action: Moody's downgrades Carnival's senior unsecured rating to Baa1, ratings are on review for downgrade

moodys.com

11 Mar 2020

New York, March 11, 2020 -- Moody's Investors Service, ("Moody's") downgraded the senior unsecured rating, and senior secured revenue bond ratings of Carnival Corporation and Carnival plc (together, "Carnival") to Baa1 from A3. At the same time, Moody's placed the company's ratings, including its Prime-2 short-term rating for commercial paper on review for further downgrade.

"The downgrade reflects Moody's expectation that soft booking trends and increased cancellations related to the global spread of the coronavirus (COVID-19) will significantly impact Carnival's earnings in 2020, resulting in metrics outside of levels appropriate for a single A rating," stated Pete Trombetta, Moody's lodging and cruise analyst. "Following earnings pressure in the second half of 2019 due to the ban on travel to Cuba and European pricing pressure, Carnival entered 2020 with metrics that were slightly within the range for an A3 long-term credit rating with minimal cushion to absorb a shock such as COVID-19," added Trombetta. While the cruise industry has seen past cyclical downturns including recession and terrorist attacks, Moody's believes that the COVID-19 coronavirus will more significantly pressure the cruise companies' earnings, cash flow, and liquidity as compared to previous cycles.

The cruise industry has been one of the sectors most visibly impacted by the spread of COVID-19, with quarantined ships due to confirmed cases of infected passengers prominent in global media coverage that could cause some customers, especially first time cruisers and older passengers, to pull back from cruising altogether. With COVID-19 cases increasing exponentially and global countermeasures becoming increasingly severe and restrictive, Moody's sees scope for a significant drop in cruise passenger volumes and net yields in 2020 as well as the potential for a reduction in demand for cruises beyond 2020. The industry's seasonal peak in the third quarter of 2020 will be impacted, and as the virus continues to spread across North America over the coming months, we expect to see lower demand and pricing pressure into 2021 and possibly beyond. While cruise demand has proven to be resilient following previous challenges, the eventual return to a more normalized state is likely to take longer than in the past and could alter the trajectory of demand in the industry.

</snip> Read the rest here: moodys.com

[zax] [graphic]

zax — 3/10/2020 11:01:22 AM

[zax] Look out below. -20% today alone.

zax — 3/9/2020 2:07:22 PM

[Jon Koplik] WSJ -- Coronavirus Cruise Passengers Face Infection Worries, Blown Travel Plans ...

Jon Koplik — 2/6/2020 1:41:16 AM

WSJ -- Coronavirus Cruise Passengers Face Infection Worries, Blown Travel Plans and Boredom

Feb. 5, 2020
7:24 am ET

Coronavirus Cruise Passengers Face Infection Worries, Blown Travel Plans and Boredom

About 3,700 passengers and crew are on board, some in windowless cabins

The Diamond Princess, off the shore of Yokohama, south of Tokyo, is under two-week lockdown after a passenger tested positive for coronavirus. Photo: Hiroko Harima/kyodo/associated Press

By Alastair Gale, Suryatapa Bhattacharya and Miho Inada

TOKYO -- As the 116,000-ton cruise liner Diamond Princess started chugging toward Yokohama earlier this week, passengers savored the last few days of an Asian journey at buffet restaurants, theaters and the ship’s nightclub, which is called Skywalkers.

Then came the two-week lockdown.

An 80-year-old man who left the vessel in Hong Kong earlier in the trip had tested positive for the novel coronavirus that has killed around 500 people and infected more than 24,000 others around the world. Japanese authorities quarantined the ship and found 10 other people with the virus who were sent to hospitals back on land.

The rest now face two more weeks holed up on the ship—the quarantine period for the virus—worrying about infection and scrambled travel plans, as well as battling boredom. About 3,700 passengers and crew are on board, some in windowless cabins.

Passengers were startled from their slumber at around 6:30 a.m. on Wednesday by a broadcast telling them to remain in their rooms. Later, the captain announced: “The ship is under quarantine and it is expected to last at least 14 days.” Crew members in protective medical gear fanned out to wipe doorknobs and other surfaces clean with disinfectant.

Life on a Cruise Ship Struck by the Coronavirus

About 3,700 passengers and crew on a cruise ship docked in Japan are being quarantined on the vessel after 10 people tested positive for the novel coronavirus. A passenger talked about his time aboard the Diamond Princess. Photo: Behrouz Mehri/Getty Images

Rebecca Frasure, a 35-year-old passenger from Forest Grove, Ore., said her husband noticed some movement in the hall when someone tried to get a bucket of ice. The passenger was asked by a crew member to return to his room and told that ice would be delivered.

Mrs. Frasure said she and her husband are worried about their prescription drugs running out before they are released from quarantine. They hope to talk to their doctors in the U.S. about how to stretch out supplies.

“We both brought just enough to see us through,” said Mrs. Frasure. In an announcement on the ship later Wednesday, the crew said they would collect requests from passengers for prescription medication.

A similar scene is also playing out in Hong Kong. About 3,600 passengers and crew on a cruise ship haven’t been allowed to disembark in the city as planned on Wednesday pending health checks, a city official said, after eight passengers who took a previous trip on the ship were confirmed to have the virus.

Tammy Smith, a 73-year-old retired elementary school principal from Southern California, aboard the Diamond Princess. Photo: Provided by Tammy Smith

The novel coronavirus threatens to deal a blow to the cruise industry, which attracts travelers across Asia, the center of the viral outbreak. Princess Cruises, the operator of the Diamond Princess, said it has canceled two other cruises from Japan, while Royal Caribbean Cruises Ltd. said on Tuesday it would cancel eight cruises out of China.

Food was an immediate concern among passengers on the Diamond Princess as the restaurants were closed and crew members delivered meals to each cabin. Tammy Smith, a 73-year-old retired elementary school principal from Southern California, said she was served a breakfast of yogurt and fruit after 1 p.m. on Wednesday, followed by a turkey sandwich for lunch about an hour later.

Princess Cruises, in a statement, said it was working to keep all guests comfortable and was bringing supplies onboard. The ship was scheduled to arrive in Yokohama on Thursday morning after a detour out to sea to dump wastewater.

Mrs. Smith has had to cancel a tour of Tokyo and Kyoto and her flights to the U.S. “We can’t make plans now until we know more about when we will get off the ship,” she said. She is spending her time texting with family and friends, watching movies and talking with her roommate.

“Korona,” who is the unofficial quarantine mascot aboard the Diamond Princess, according to passenger Tammy Smith. Photo: Provided by Tammy Smith

British passenger David Abel, who is traveling on the cruise with his wife for their 50th wedding anniversary, took to Facebook to publish a series of videos about his experience. “The meals have completely changed. We’re definitely not on a luxury cruise now,” he said in one of his posts.

Adding to the uncertainty, only 31 test results for 273 passengers feared to have the virus because of symptoms such as fever have so far become available, meaning there could be additional cases on the ship. Of the 10 already people confirmed to have the virus who were brought to shore for treatment, nine are passengers -- two Australian, three Japanese, three from Hong Kong and one from the U.S. -- and one is a Filipino crew member, according to Princess Cruises.

Officials on the Diamond Princess cruise ship, nine passengers and one crew member have been confirmed as having the virus. Photo: handout/Agence France-Presse/Getty Images

The first passenger to contract the virus left the cruise ship on Jan. 25. When the ship arrived in Okinawa in southern Japan on Feb. 1, several passengers were found to have a fever but none said they had been to Wuhan, nor had they had contact with people from the central Chinese city, and the cruise was allowed to continue on to Yokohama. On Feb. 2, the captain of the ship was told that the first passenger had been confirmed to have the virus. The ship was put under quarantine on Feb. 3.

The ship published an entertainment guide for passengers on Wednesday as it had for other days during the cruise, including an afternoon line dancing class and karaoke session. But socializing with other passengers is now out of the question.

Mrs. Smith says she and her roommate have decorated a yellow rubber duck with a surgical mask similar to those worn by people concerned about contracting the virus and have named it “Korona.”

“This is our quarantine mascot,” she said.

-- Joyu Wang in Hong Kong contributed to this article.

Write to Alastair Gale at alastair.gale@wsj.com, Suryatapa Bhattacharya at Suryatapa.Bhattacharya@wsj.com and Miho Inada at miho.inada@wsj.com

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[Jon Koplik] WSJ -- Trick to Making a 180,000-Ton Carnival Cruise Ship Feel Cozy ...............

Jon Koplik — 12/18/2019 1:40:06 PM

WSJ -- Trick to Making a 180,000-Ton Carnival Cruise Ship Feel Cozy ...................

Travel
The Middle Seat

Dec. 18, 2019

The Trick to Making a 180,000-Ton Carnival Cruise Ship Feel Cozy

The company is re-imagining small and large spaces while building its largest ship ever, the Mardi Gras, which can hold 6,641 people

How to Fit More Than 6,000 Guests Onto a Ship and Not Feel Cramped

Cruise ships are getting larger and the activities on board more extreme. WSJ’s Scott McCartney visits a shipyard in Finland to see how the cruise operator Carnival is able to pack so much on a ship -- including a roller coaster -- and still have it float.

By Scott McCartney

Where does replacing a nightstand with a small tray for phones give you a shower door instead of a clumsy curtain that sticks to you? On a cruise ship.

Cruise ships are getting bigger and more popular. Yet even with their massive size, every little bit of space counts, especially in small cabins. Sometimes saving inches bedside allows for a significant bathroom upgrade.

Cramming in as many people as possible -- with at least a modicum of comfort -- is the major challenge of travel, whether on planes, trains, hotels or ships. Individual space is on the decline as travel companies try to boost profitability. Think of the shrunken airplane bathroom.

Cruise ships, which now cost upward of $1 billion to build, present a significant challenge: Repeat customers and social media reviews are crucial to the business. So comfort for the masses actually matters, and it drives ship design.

Carnival, the largest cruise company, is building its largest ship, a 180,000-ton floating town three football fields long with 18 decks and even the first roller coaster at sea. The Mardi Gras, which will sail late in 2020, will carry a maximum 6,641 passengers in 2,641 cabins.

“It’s not really packing more in. We are already dense,” says Ben Clement, Carnival Cruise Line’s senior vice president for new builds, ship refurbishment and product innovation.

With ships, like planes, bigger size not only allows more features but also brings more restrictions. The size of large rooms or cabin layout on a ship is limited by requirements for fire doors, for example. More weight means it takes more fuel to move, and fuel represents one of the biggest costs. A big ship still has to be fast enough to complete voyages on time.

In addition, a vessel that’s too large can’t sail under some bridges or use certain ports. The Mardi Gras, for example, will be too big for its namesake port, New Orleans.

“You cannot put a ship in a copy machine and press size two,” Mr. Clement says. “If you double the size of the ship, you cannot double the size of the entertainment, of the dining room.”

Figuring out how to make a bigger area feel small and small spaces feel big are the challenge of many travel companies. Carnival let me explore Mardi Gras in the shipyard where, unfinished, she reveals some of the secrets of putting 6,000 customers on a single boat and not making it feel crowded.

Some spaces become multi-functional. Most big cruise ships have a large atrium in the middle of the ship, a public square to add a feeling of openness and grandeur.

With Mardi Gras, Carnival decided to move the atrium to one side, creating a first-ever three-story glass wall with ocean views. At night, the atrium transforms into a show lounge for 600 to 800 people, featuring everything from acrobats walking on the glass wall with ceiling-mounted rigging to stand-up comedians and musicians. Screens can descend from the ceiling and rise from the floor to turn the atrium into a giant Super Bowl watch party. Benches and chairs, all fixed to the floor per regulation, have been designed for double duty.

The strategy is to make the atrium a more useful space day and night to help disperse passengers throughout the ship. But the placement, crucial for the ocean views that Carnival hopes will make it a popular resting place during the day, became an engineering challenge.

“It’s a rather large hole in the side of the ship,” says Katja Lankinen, the principal engineer on the Mardi Gras project for Meyer Turku, the Finnish shipbuilder. The open space meant one side of the ship would be heavier than the other -- that’s why atriums have traditionally been put in the center of the ship. And the three-story glass wall meant little structural support in a crucial area.

The solution: lighter insulation and other weight-saving moves on one side of the ship, and strengthened pillars in walls and horizontal girders in floors to compensate for the glass wall.

Standing in a long line waiting for food would only cement that overcrowded feeling. To disperse hungry passengers, Carnival is strategically placing restaurants in six different neighborhoods-themed zones where it hopes people will not only go to eat but linger. That’s in addition to the big, traditional seated dining room.

The French Quarter, for example, will have an Emeril Lagasse bistro as well as a jazz club, street entertainers, a fortuneteller and a cooking school. It will be packed into two decks, with a portion of the upper deck cut out so you’ll see people either above you or below you.

“It’s more open, yet you get twice as many things in,” says Brett Vitols, Carnival’s director of new builds.

Another neighborhood will have a brewery and barbecue restaurant. The brewery makes beer on board, a source of fascination for some passengers, but doesn’t take up much space.

The growth rate for the cruise industry tops just about anything in the travel world. Last year, 28.5 million people took a cruise, nearly 7% more than in 2017, according to the Cruise Lines International Association. The growth rate in North America was 9%.

A total of 19 new ocean ships are expected to sail in 2020. CLIA says the global passenger count should reach 32 million.

Some of the higher passenger numbers come with the increasing popularity of shorter cruises -- three- and four-day escapes. And some has come by filling bigger boats. Royal Caribbean’s Symphony of the Seas, launched last year, is the largest in the world at 228,000 tons, more than 20% bigger than Mardi Gras, with 118 more cabins.

Mardi Gras will represent a significant step up for Carnival, one-third bigger than Carnival’s current largest ship, Panorama, launched earlier this month out of Long Beach, Calif. The passenger capacity will be 50% larger, 6,000 compared with 4,000. (Its total capacity is 8,376, including 1,700 crew members.)

Carnival Corp. , the Miami-based parent of Carnival, Princess, Cunard, Costa, Holland America, Seabourn and other cruise lines, won’t say how much Mardi Gras will cost to build. The company does say when Mardi Gras opened for booking, cabins were reserved for the initial sailings seven times faster than Carnival’s last new class of ships, which includes Panorama.

Mardi Gras will float for the first time at the end of next month. The steel is all in place and workers are installing heating and air-conditioning ductwork and electrical wiring. Cabins built in a nearby factory are being hoisted onboard intact, slid in through the side of the ship.

Those cabins got their own Marie Kondo-type redesign. An English design firm worked to make them feel more spacious in the same square footage.

Bathrooms grew, largely a result of the bedside table change to trays mounted on the wall. Instead of a coffee table in front of the couch, an Ikea-type ottoman is used. The padded top comes off to reveal additional storage space, and flips over if you want a flat tabletop.

Right angles were largely eliminated -- a wall enclosing the bathroom is curved to give a more open feeling. Lighting was redesigned, with large, round lamps instead of small spotlights. The closet has a pullout shoe rack and more storage space. It’s Container Store at sea.

“Everything we have,” Carnival’s Mr. Vitols says, “we try to use efficiently.”

Write to Scott McCartney at middleseat@wsj.com

Copyright © 2019 Dow Jones & Company, Inc.

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[Jon Koplik] WSJ obituary / Edwin Stephan / Founder of Royal Caribbean ........................

Jon Koplik — 11/15/2019 5:56:12 PM

WSJ obituary / Edwin Stephan / Founder of Royal Caribbean ..........................

Nov. 14, 2019

Edwin Stephan Sold Sea Cruises to Middle-Class America

Founder of Royal Caribbean persuaded Norwegian shipowners to finance his vision

By James R. Hagerty

He grew up far from the sea, in Wisconsin, didn’t particularly like to travel and was prone to seasickness. Yet Edwin Stephan, who died Nov. 8 at age 87, was among the first entrepreneurs to see the vast potential for Miami as a base for cruises in the Bahamas and Caribbean.

Founding what is now Royal Caribbean Cruises Ltd. in 1969, he joined two other outsiders -- Knut Kloster of Norway and Ted Arison, an Israeli -- in persuading middle-class Americans that cruises weren’t just for the idle rich, or the “overfed and nearly dead,” as one of Mr. Stephan’s aides put it. Serving a mass market that didn’t exist in the 1960s, Royal Caribbean is now the world’s second-largest cruise operator, after Carnival Corp. , founded by Mr. Arison. Norwegian Cruise Line Holdings Ltd., founded by Mr. Kloster, is third.

World-wide, cruise lines carried about 28.5 million passengers last year. About 40% of those passengers were on Caribbean, Bermuda or Bahamas voyages.

Mr. Stephan, the shy son of an insurance salesman, had wavy hair and movie-star looks when he arrived in Miami Beach in 1954. He was looking for a bit of peace and warmth after a hitch in the U.S. Army, fighting in the Korean War and earning two bronze stars.

Once his money ran out, he went to a hotel school and worked as a bell captain in the Casablanca Hotel in Miami Beach. He later gained management experience at the Biscayne Terrace Hotel in downtown Miami. By 1965, he was general manager of a tiny cruise operator, Yarmouth Cruise Lines, operator of the Yarmouth Castle, a 38-year-old steamship partly made of wood.

Around 12:45 a.m. on Nov. 13, 1965, the Yarmouth Castle caught fire en route to the Bahamas. Most of the approximately 550 passengers and crew members were rescued before the ship sank, but 90 died. Gordon Lightfoot wrote a song about it.

youtube.com

In Miami, Mr. Stephan, then 33 years old, was besieged by questions from reporters and Coast Guard investigators. “The airlines would be set up for something like this,” the Miami News quoted him as saying several days later, “but for a cruise liner to catch fire and sink -- this was a shocker.” A Coast Guard report in February 1966 criticized officers of the ship for failing to sound a general alarm and take firm action in organizing the crew to isolate the fire.

Mr. Stephan moved on, working with a partner to set up Commodore Cruise Line before leaving to found Royal Caribbean. Haunted by the Yarmouth Castle disaster, Mr. Stephan believed a cruise line should have new ships, designed for cruising in warm waters and built for safety.

In the cruise business of the 1960s, “nobody really had new ships,” he recalled later. He couldn’t afford them, but a ship broker introduced him to Sigurd Skaugen, who headed I.M. Skaugen & Co., a Norwegian shipowner. Mr. Skaugen agreed to provide funding for the first of several cruise ships to be delivered to Royal Caribbean in the early 1970s by a Finnish shipyard. As the cost of building ships grew, two more partners -- Anders Wilhelmsen & Co. and Gotaas-Larsen Shipping Corp. -- invested in the cruise line.

Early seven-day cruises on Royal Caribbean cost as little as $368 a person. Onboard entertainers included the comedian Henny Youngman and the opera singer Patrice Munsel. “It was sort of a Catskills at sea,” said Rod McLeod, who headed marketing. To bring in more customers, Mr. Stephan organized charter flights from California.

There was glamour: Ingrid Bergman christened the line’s second ship, the Nordic Prince.

And romantic comedy: “The Love Boat,” a TV series introduced in 1977, spurred interest in cruising. In the late 1970s, Royal Caribbean cruises were selling out so fast that the line expanded two of its ships by having them cut in half so that a new middle section could be inserted, increasing capacity to more than 1,000 from about 700.

Viking Crown lounges, wrapped around the ships’ funnels, provided 360-degree sea views and spurred drink sales. Mr. Stephan, who designed the lounges, said he got the idea from Seattle’s Space Needle.

The ships kept getting bigger. Royal’s Sovereign of the Seas, launched in 1988, could carry 2,690 passengers and had two swimming pools and a five-story atrium. Today the company’s ships can carry as many as 6,680 passengers each.

Carnival tried to take over Royal Caribbean in 1988 but was thwarted when Anders Wilhelmsen and the Pritzker family bought out other investors and secured control. Royal Caribbean went public on the New York Stock Exchange in 1993.

Edwin William Stephan Jr. , known as Ed, was born Dec. 15, 1931, in Madison, Wis. He studied mathematics, accounting and economics at the University of Wisconsin but didn’t finish his degree before being drafted into the Army.

At Royal Caribbean, he held various titles, including chief executive and vice chairman. When he retired in 2003, there was little fanfare. “It’s about time,” he told the Miami Herald. “I’m happy to see the company still in existence.”

Mr. Stephan was married to the former Helen Morin, his onetime secretary. She survives him, as do four children and three grandchildren. He enjoyed demonstrating his hook shot with a basketball and was a dedicated runner. One of his goals was to compete in a marathon at age 90.

He kept business trips as short as possible. In the 1970s, he flew to a board meeting in Oslo and insisted on boarding his return flight the same day.

Write to James R. Hagerty at bob.hagerty@wsj.com

Copyright © 2019 Dow Jones & Company, Inc.

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[Jon Koplik] WSJ -- Change in maritime regulations boosts demand for liquefied natural gas .....

Jon Koplik — 9/4/2018 11:34:28 PM

WSJ -- Change in maritime regulations boosts demand for liquefied natural gas .....................

Aug. 23, 2018

The New Gas Market: Shipowners Needing Cleaner Fuel

Change in maritime regulations boosts demand for liquefied natural gas

By Paul Garvey

The global shipping industry could become a new market for liquefied natural gas, thanks to a drastic change in maritime law that aims to curb air pollution.

Major cruise liners and the world’s biggest freight companies have ordered 125 new LNG-powered vessels and another 119 are already in operation, according to current figures from maritime consultancy DNV GL. That is partly because new regulations taking effect in 2020 will reduce the maximum amount of sulfur permitted in the oil used by ships from 3.5% to 0.5%.

LNG is gas that is super-cooled until it turns into liquid. While LNG use as a shipping fuel is still too small to affect its prices, the projected uptake is supporting the outlook of companies like Royal Dutch Shell RDS.A 0.05% PLC that LNG demand will continue to grow.

The shipping industry currently consumes about 5 million barrels a day of oil, and most of the industry is expected to meet the new obligations by either switching to more expensive low-sulfur fuels or installing ”scrubbers” that clean sulfur out of exhaust fumes.

But the rule changes will make LNG a cost-competitive option for shipping fuel. Analysts say that just converting 5% of the global fleet to run on LNG would create a new market equivalent to the fifth-largest in the world, behind major consumers Japan, China, Korea and India.

Carnival Corp.’s CCL -0.47% AIDAnova is currently under construction at a shipyard in Papenburg, Germany. When the 1,106-foot vessel launches later this year, it will be the first cruise ship fully powered by LNG. Carnival, the world’s largest cruise company, plans to take delivery of 11 new LNG-powered ships between now and 2025.

Cruise passengers will be able to enjoy the difference of journeying under LNG power, Steve Hill, a vice president at Shell, said in an interview earlier this year.

“If your customer proposition is to have people lying on the deck and enjoying the sun, it’s much nicer to not have pollution from fuel oil being spread all over them all day,” he said.

Carnival isn’t alone: Swiss-based MSC Cruises said in June it ordered what will be its fifth LNG-powered vessel. Royal Caribbean also said this year that it has two LNG-powered cruise liners on order.

In freight, Siem Industries is building LNG-fueled car carriers for Volkswagen AG . France’s CMA CGM SA has ordered nine new ultra-large LNG-powered container ships and has struck a 10-year LNG supply deal with French oil and gas producer Total. Teekay Corp. , one of the biggest shipowners, and Sovcomflot, Russia’s largest shipping company, also have LNG vessels in order.

LNG does faces challenges in the maritime industry. Credit Suisse oil and gas analyst Saul Kavonic said many shipping companies would meet the emissions rules by fitting their vessels with scrubbers. Carnival, for example, will use scrubbers on 69 of its 103 ships.

“Only a very small percentage of the international shipping fleet will adopt LNG as a fuel over the next five years,” Mr. Kavonic said.

The lack of ”bunkering” -- the infrastructure for storing and refueling LNG -- is likely the biggest hurdle. LNG requires dedicated facilities to store the fuel at the temperatures needed to maintain its liquid form and load it onto vessels.

LNG fuel tanks also take up almost twice as much space as their oil equivalents, which would impact the design of new vessels. Ships powered by LNG are also more expensive than traditional vessels. Introducing LNG to a fleet requires retraining of engineers and crews.

Shipping companies are also used to working in the highly liquid oil market, where supply is easy to source and deep futures and hedging markets help manage their exposure. In contrast, until recently LNG has been dominated by decades-long contracts and its futures market is still nascent.

But short-term, more flexible LNG sales are becoming more common. Producers are increasingly willing to trade single LNG cargoes. The percentage of LNG cargoes sold on the spot market has grown from just over 10% in 2010 to almost 25% in 2017, according to Shell.

Tom Strang, who has been leading Carnival’s LNG strategy, said the nature of the LNG market requires longer-term contracting and planning.

Still, LNG producers are eyeing the industry as a promising new source of demand. Shell’s Mr. Hill said the energy giant is betting LNG will grow at a faster pace than oil. Shell is working with Carnival to source LNG and developing bunkering facilities for its cruise ships.

“Historically LNG has struggled to compete with heavy fuel oil which is cheap,” said Mr. Hill. “But in this new world, where the costs of the alternatives are a lot more expensive, LNG will be a lot more competitive. We’re starting to see a lot of interest and a lot of activity.”

Write to Paul Garvey at paul.garvey@wsj.com

Copyright © 2018 Dow Jones & Company, Inc.

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[Jon Koplik] WSJ -- The Debate Over Cruise Vacations: Wonderful or Torturous ? .................

Jon Koplik — 8/14/2018 9:37:10 PM

WSJ -- The Debate Over Cruise Vacations: Wonderful or Torturous ? .................................

Travel
Off Duty Travel
Love / Hate Relationship

Aug. 14, 2018

The Debate Over Cruise Vacations: Wonderful or Torturous?

High-seas holidays have as many boosters as they do detractors. Two savvy travelers debate the pros and cons

By Mark Childress, William Sertl and Sara Tucker

Why We Love Them

I am a Travel Loner. When the crowd heads off to see the sunset, I go east. Once, before a Costa Rican volcano tour even reached the volcano, I paid a taxista $100 to take me back to the capital, far from the chatty tourists on the bus.

I spent a lot of years dragging my suitcase up those long stairways to European train platforms because I thought cruises were stupid. I was entirely sure that only old folks and sheep go on cruises. Who wants to board a gigantic floating condominium? Who would choose to be trapped inside a hotel that wallows in the waves? Then we have “The Poseidon Adventure” factor: I can swim, but so could Shelley Winters! And we all saw the pictures of that Italian cruise liner beached on its side on the rocks -- who wants a holiday like that one?

Then, an incredibly cheap deal on a cruise from Valparaiso, Chile, to Boston lured me in. Seventeen days, through the Panama Canal. How else would I ever get a chance to visit the remote western coast of South America? I jumped.

Aboard the ship, I unpacked. Once. (Unpacking just once is the first great thing about cruising, I’ve come to realize.) I put my socks in the drawer, stowed the suitcase, and brought my room along with me on a journey of 4,790 nautical miles, 12 ports-of-call. I had a tiny bathroom, a desk, a balcony about the size of a lounge chair. A rectangle of blue Pacific to call my own. A vacation, to me, is best spent reading long books and not wearing a watch. There’s no better place to do that than a lounge chair with the ocean rolling by at 15 knots. (Knots are miles per hour plus the glamour of the open sea.)

What about the herd of sheep? Turned out to be a wildly eclectic mix of European bargain hunters, South American wanderers, North American party animals, couples young and old, families, large friend-and-family groups -- and I learned the second great thing about cruising. You can find your people, or no people at all. You can slip through the crowd unnoticed with your Proust and your tea, or party the night away with 20 hedonists who won’t be going to yoga at dawn. If you choose the party option, you are never farther from your room than an elevator ride, and you won’t meet law enforcement on the way.

No other mode of transportation allows time to read David McCullough’s “The Path Between the Seas” as you approach the Panama Canal, then to watch the canal’s spectacular machinery from the deck while an expert narrates everything over the ship’s PA in satisfying detail. Ocean travel is all about time. And a day aboard ship can seem endless, in the nicest possible way. The horizon, like the vacation, goes on forever.

-- Mark Childress

Why We Hate Them

In the glory days of oceanliners, your fellow passengers might have been actresses, CEOs, spies or card sharks. The glamour was self-perpetuating. Then magazine ads for Cunard began promising a bit desperately that “getting there is half the fun.” The jet age was dawning, and steamship companies knew how things were going to end: Travel-hungry Americans would opt to fly to Europe to spend as much time there as their vacations allowed, foregoing the sheer pleasure of a trans-Atlantic crossing. But even without the threat of jets, a cloud hung over the liners as they steamed across the Atlantic, the legacy of the Titanic.

As a kid in 1956, I was mesmerized by TV coverage of the sinking of the Andrea Doria off Cape Cod on its way to New York. While my parents read danger on the screen, all I could see was adventure -- scary, sure, but also thrilling. As I grew up, that changed. “Ship” came to mean “cruise.” While it was great to be on the water, no cruise ever met my expectations. The only people I met onboard were unglamorous strangers who refused to remain strangers forever.

Cruise fans insist there’s a lot to do onboard, but if I wanted to see a Broadway show, I’d stay in New York. If I wanted to learn Spanish (or Urdu or Mandarin), I’d stay in New York. Should I decide to climb a wall, what better place to struggle upward than my walk-up apartment in New York?

What about those small luxury cruise ships, full of like-minded folks, headed far up a lazy river? Sounds good, but I have a problem with them too. I am by nature an Existentialist. I need chores -- a rock to roll up the hill every day -- to give my meaningless life meaning. I ride my bike to the grocery store, the post office, the farm-stand. When cycling just for the sake of cycling, with no destination in mind, I end up asking myself the same question I do on a cruise: “Why am I doing this?”

I’ll admit to taking one cruise -- from Lisbon to London -- that I thoroughly enjoyed in spite of myself. On the way to the Thames, we traveled up the Gironde Estuary to Bordeaux and up the Seine as far as Rouen. I was enchanted as rural France rolled slowly by, so close I could almost milk a cow. For the grand finale, Tower Bridge triumphantly opened to welcome us. Passengers stood on deck cheering, as jubilant as a conquering army. We could see the HMS Belfast, a warship-cum-tourist-attraction from World War II that is permanently moored by the bridge. We had tied up right beside her. I went back to my stateroom to grab my luggage. To my surprise, when I opened the door, no expanse of ocean greeted me through the window. Instead, I looked across the cabin at huge antiaircraft guns from the Belfast, aimed straight at my balcony. I threw up my hands in mock surrender and cried: “I confess. I loved it. Let me go, and I’ll never do it again.”

-- William Sertl

Copyright © 2018 Dow Jones & Company, Inc.

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[Al Greenleaf] With two additional ships experiencing major failures, CCL is all but dead. The...

Al Greenleaf — 3/19/2013 1:44:22 PM

With two additional ships experiencing major failures, CCL is all but dead. The biggest damage is yet to come. As their ships sail nearly empty (who would TRUST them now???) there is no way they can make money. IMO the only way for them to survive is to be bought our by another cruise line. But who would do that? Who would take on all that negative goodwill, not to mention the training, repairs, and reorganizations costs for a cruise line with so many ships. I am making a killing right now on PUT spreads, beginning with buying the April 34 put and selling the April 31 put. I'd use leaps, but in that amount of time, some fool COULD buy them. My target price is the 2012 low of about 30, and if that support is breached, then the 2009 low of 20. FWIW....

[Sr K] bloomberg.com

Sr K — 1/14/2012 8:28:53 AM