Consecutive outbreaks, denials of docking, and global suspensions … bad news for the cruise industry followed.

Editor’s note: This article is from WeChat public account “Every headline” (ID: gh_f4fcadf489e0 ) , produced by “Daily Economic News” and Tencent News. Reporter: Zhang Yun, Xia Bing, Zhang Xiaoyin, Zhao Linan, Intern.

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On March 20, four passengers on the “Ruby Princess” cruise ship docked in Sydney, Australia were diagnosed with new crown pneumonia. Previously, nearly 4,000 passengers and staff had disembarked. New South Wales Minister of Health and Medical Research Hazard said other passengers may have been infected with the new crown virus without knowing it.

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Affected by the epidemic, major cruise companies have announced their suspension. Unfortunately, the crisis happened just in the “wave season” where it received the most orders. “In the past 55 years, we have never been through a severe test like the past 40 days.” Princess Cruises President Jan Swartz said: “A 60-day suspension is the toughest decision ever. We want to Replan the environmental conditions on board. “

“The cruise industry has a history of nearly 200 years, and 2020 will become the first year of global cruise suspension after WWII.” Professor Qiu Ling, deputy director of Shanghai International Cruise Economic Research Center and Shanghai University of Engineering and Technology, told the “Daily Economy” “News” reporter said.

The impact of the epidemic has also caused investors to panic. From January 1, 2020 to March 20, 2020, the share prices of Carnival Cruise Line (hereinafter referred to as Carnival), Royal Caribbean Cruises Limited (hereinafter referred to as Royal Caribbean) and Norwegian Cruise Line fell by 76.11% and 81.99%, respectively. And 85.07%, the market value has evaporated more than $ 50 billion.

The stock price plunge is not without reason. Before the opening of US stocks on March 20, Eastern Time, financial data released by Carnival Corporation showed that as of February 29, Carnival Corporation had a net loss of US $ 781 million in the first quarter of fiscal 2020.

No one can say when the industry will recover.

“Cruise is a special tourism consumption that is not just needed. The current market downturn caused by the epidemic is difficult to bring a compensatory rebound in the future market. The recovery period will be longer than other industries such as aviation and hotels.” Genting The cruise group told reporters of the Daily Economic News.

But others are optimistic.

“I believe that no winter will not pass, and no spring will not come. This is the control of the epidemic situation in China, and this is also the case for the cruise industry in China.” said Ma Ruizhe, Asia president of Costa Cruises Group.

Cruises of the cruise ship: Once rejected, the passengers “have trouble, some have called”

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The afterglow of the setting sun is projected on the sea, and the dark clouds appear to be gathering.

On January 12, “Costa Atlantic” was officially put into operation in the Chinese market. In a press release, the meaning of delivery was described as follows: “The delivery of the” Costa Atlantic “is a landmark in the history of China’s cruise ship, and it has established China’s importance in mastering the initiative of the cruise market and enhancing the voice of the international cruise market. Foundation. “

Yang Fan, who should have been a staff member on the cruise ship, told the Daily Economic News reporter: “Last year I got an offer (admission notice) through an interview. I was scheduled to board the ship on January 15 but wanted to go home Happy new yearIt was on February 15th, but the cruise was ‘blocked’ after the year, and my schedule was cancelled. “Now Yang Fan, who is still at home, does not know if he is lucky or unfortunate when talking about his experience.

Yang Fan failed to board the ship, and Li Cheng, who was on board the “World Dream” cruise service, told reporters about her special experience.

At 22 o’clock on January 19, “World Dream” departed from Nansha Pier in Guangzhou and returned at 8:30 on January 24. Another group of passengers departed for Hong Kong to board the ship. Before sailing, Li Le saw News of new crown pneumonia outbreak.

On February 3, the Guangdong Provincial Center for Disease Control issued a notice saying that several patients with new crown pneumonia had boarded the “World Dream” cruise ship.

“On February 4th, our cruise was refused to dock. Some passengers began to panic, some were noisy, some were calling.” Li Le still clearly remembers the scene at that time.

Ship personnel noticed the seriousness of the situation. Li Le said, “I keep washing and disinfecting my hands every day. Fortunately, a lot of masks and gloves are on board. I take my body temperature constantly. I also use disinfectant and disinfectant to treat each one. He was scared to take 6 baths a day. ”Li Le worked in the entertainment department of“ World Dream ”. After realizing the importance of epidemic prevention and control, the department held several group meetings. Check for colleague infections one by one.

“During this period, the company also formulated a plan to soothe and stabilize passengers’ emotions as much as possible, as well as arrange testing.” Li Le said.

On February 5, “World Dream” returned to Kai Tak Cruise Terminal in Hong Kong, China. All passengers and employees were not allowed to disembark until the quarantine work was completed.

“A sense of fear that comes from oppression. Especially when Hong Kong’s health protection department waited for the results after collecting samples, I couldn’t sleep at all.” Now looking back at the scene, Li Le felt as if he was Also experienced the baptism of growth.

“Although I am afraid, all my colleagues are in good physical condition, and then calmly analyze and judge later, then I will slowly relax.” Li Le told reporters. On February 9, the Hong Kong SAR Government’s Department of Health announced that the test results were negative, and everyone was relieved.

The minesweeper is over and passengers can finally disembark!

When reviewing these days, Genting Cruises Group said with relief that “there was no confirmed case on board.”

In the evening of February 9, Li Le and her colleagues sent off all passengers.

“The day when the ship broadcast informed us that we could lift the embargo and disembark, the crew and passengers were so happy to jump up.” Li Le recalled, the passengers were all heart-bound, packed their luggage, and measured the temperature ashore.

On the way, “Several passengers wanted to hug our staff, but the cause of the epidemic could not be approached, and some people kept taking selfies to take photos with us,” said Li Le. Some crew members had tears in their eyes, and several passengers is also like this.

“At the time, everyone was wearing masks, and they couldn’t see each other’s faces clearly, but everyone’s hearts were close. All the incomprehension, complaints, grievances, and at that moment, all resolved.”

After the last batch of tourists were disembarked, Li Le and her colleagues ended the customer service. During the period when World Dream had no passengers, it had drifted at sea for nearly 6 days and could not be docked. They continue to punch in to work every day, pay salaries as usual, and the Ministry of Entertainment needs to arrange for more than 1,800 crew members on board.

Because Li Le’s contract with the company expires at the end of March, on February 14th, she and all non-Hubei employees whose contracts have not expired were arranged to transfer to the “Pisces Star” cruise ship to wait for notice.

It is also fortunate that another group of passengers, due to the port’s concern about the risk of the new crown pneumonia epidemic, was rejected by multiple ports for the “Westerdam” cruise ship that drifted at sea for nearly two weeks before calling on Cambodia on February 13. Sihanoukville.

Change in stock price: The share price of cruise company plunged 80% and fell back to 2008 level

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Since late February, there have been more and more cruise-related outbreaks, and a storm is coming.

On March 3, a passenger who had boarded the Supreme Princess cruise ship in February unfortunately died of new crown pneumonia, and then the Supreme Princess returned early and stayed on the high seas near the west coast of the United States for nearly a week before arriving Ashore, at least 21 people on board were diagnosed with new crown pneumonia.

On March 13, the world ’s four largest cruise lines (Carnival, Royal Caribbean, Norwegian Cruise Line and Mediterranean Cruise Lines) announced suspension.

On March 17, the cruise ship “Ms. Bramar”, which was positive for the new crown virus test of five people on board, docked in the port of Mariel, Cuba, after being rejected by multiple ports.

On March 20, four passengers aboard the “Ruby Princess” cruise ship docked in Sydney, Australia were diagnosed with new crown pneumonia. Nearly 4,000 passengers had already disembarked.

Affected by the epidemic, from January 1, 2020 to March 20, 2020, the stock prices of Carnival Corporation, Royal Caribbean and Norwegian Cruise Line fell by 76.11%, 81.99%, and 85.07%, respectively. The stock prices of the first two companies have almost fallen back to 2008 levels.

“The cruise industry has a history of nearly 200 years, and 2020 will be the first year of global cruise suspension since WWII.” Professor Qiu Ling told reporters of the Daily Economic News that the new crown pneumonia epidemic has hit the global cruise market, Three majorEfforts will be made to improve epidemic prevention and control plans, standard systems and process specifications, upgrade cruise public health control measures, and comprehensively strengthen the health inspection and management of crew and passengers.

Operational analysis: High maintenance costs for buying new ships and existing fleets

Looking back at history, the cruise industry has also been hit hard.

P & O Princess Cruises is known as the originator of cruise ships. In 1844, P & O launched passenger routes, which was the first year of the cruise industry. For more than 100 years, P & O cruises have continued to grow. But in World War I, 85 ships were sunk by P & O, and in World War II, 179 ships were sunk, causing heavy losses.

P & O acquired Princess Cruises in 1974. Until 2000, Carnival and Royal Caribbean engaged in a protracted battle for Princess Cruises. Finally, Carnival gradually grew into the world’s largest cruise company through mergers and acquisitions.

Why did the outage caused by the epidemic cause such a big blow to the cruise company’s stock price? Perhaps a glimpse from the operating perspective of the cruise company’s high capital model.

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In recent years, with the increase in passenger capacity of Carnival, its operating income and net profit have steadily increased. Carnival’s annual report shows that it will carry 12.9 million passengers in 2019, compared to 8.52 million in 2009 10 years ago. At the same time, Carnival’s operating income also increased from USD 13.157 billion in 2009 to USD 20.825 billion in 2019.

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But from the perspective of free cash flow, in 2019, the net amount of cash flow from Carnival’s operating activities was about 5.475 billion US dollars, and the capital expenditure in 2019 was as high as 5.429 billion US dollars. Free cash flow was only $ 46 million. Carnivals can also be found back in previous yearsThe company has more free cash flow than in years when net profit was low.

What’s the problem? The reason is the high maintenance costs of buying new ships and existing fleets.

In 2019, Carnival spent $ 3.8 billion on new ships and $ 1.7 billion on the renovation and maintenance of existing ships. In 2017 and 2018, new ship construction expenditures were US $ 1.4 billion and US $ 2.1 billion, respectively, while existing vessel renovation and maintenance expenditures were US $ 1.5 billion and US $ 1.7 billion.

It can be seen that the cruise industry is inherently characterized by high capital investment and high operating costs. In other words, the fleet of the Carnival Company was suspended, but these costs were not “suspended”.

According to the latest financial data released by Carnival Corporation, as of February 29, Carnival Corporation had a net loss of US $ 781 million in the first quarter of fiscal 2020.

Prof. Qiu An analyzed that cruise companies are facing severe challenges in three aspects. One is the pressure of economic hardships. Cruise companies will face no income and high cost expenses (including company operations, ship docking, Expenses for daily maintenance of ships, etc.), staff salaries, additional epidemic prevention investment, etc., resulting in great economic losses, insufficient cash flow or facing bankruptcy. In addition, the huge depreciation of fixed assets will also affect the company’s net profit performance.

Second, market confidence has been hit hard. Consumers’ trust in cruise tourism has greatly reduced, and public health safety of cruise ships has raised public doubts. The restoration of market confidence will be a long-term process.

The third is the continuous loss caused by the uncertain return time. This is a huge test for cruise companies’ resilience, market forecasting ability and anti-risk ability.

Crew movement: Sea rafting for more than a month, looking forward to returning home soon

On March 18th, when the reporter of “Daily Economic News” contacted Li Le, this was the 33rd day she switched from “World Dream” to “Pisces”. . She told reporters that cruise ships cannot dock at the Kai Tak Cruise Terminal in Hong Kong, so they stopped at a sea near the port.

The sea drift for more than a month sometimes feels dull for Li Le, it is too long. But under the epidemic, she also felt lucky: her boyfriend happened to be working on the cruise ship and could spend this special time together.

On the other end of the phone, Li Le was a little excited. She could get off the boat and go home in a few days. The company had arranged for her to end the contract a few days in advance. She said, “It’s great. I really hope to go home soon, and finally I can see my parents.” Because of fear of parents’ concerns, Li Le said that she would avoid the stress of each contact with her family and only report her safety.

“The epidemic has made the cruise industry glamorous. But I really love this profession and hope that the cruise industry can clear up the haze as soon as possible.” Li Le said that she has already submitted a three-month dance class and worked hard Improve your ability to work.

Little A is EmperorSea ride on a Caribbean cruise ship. When the suspension was announced, his cruise was about to arrive in Miami. Little A was told that there would be no guests on board, and the cruise would set sail for the Bahamas at the scheduled time and leave all crew members on paid leave.

“This time, we can finally relax as a guest. Fortunately, we have an island where we can stop the boat, or we will float on the sea.” Xiao A said that during this time, they still need to “care” The ship was released until a new decision was made, but he also added that although it seemed easy, these days were difficult for all practitioners.

Yang Fan, who is still at home, will spend a lot of time browsing the news about the cruise industry on major websites every day, and then exchange information and experience with his colleagues in the post bar: “With many seafarers and stranded on the ship Compared to the passengers, I only postponed the schedule. Fortunately, I have not lost personal freedom. “He comforted himself like this.

But Yang Fan is still full of uncertainty. “Now the ships are stopped, and getting on the ship is also a risk. The family also asked me if the schedule would be cancelled due to the epidemic situation, but I am more worried about being cut without boarding the ship. However, I can only recognize it in this situation. . “

Speaking of this, Yang Fan’s tone started to show a little anxiety. “Haichen’s profession is a bit special.” Yang Fan said: “The usual work comes under a paper contract. The labor contract relationship only occurs when the ship is opened. There will be no responsibility. There is no basic salary and basic salary, so once the voyage is suspended, the employees who have not boarded the ship will lose their basic living security.

“At least I haven’t received a notice from the employer to cancel the offer.” Yang Fan comforted himself. He used this time to prepare for IELTS and TOEFL. For the future, he clearly realized the situation of the cruise industry. “Instead of Sighing and sighing, it is better to actively look for opportunities to counterattack after the crisis. “

The cruise industry has a high entry threshold, and practitioners must have a variety of capabilities. Perhaps fear of layoffs and lost employees is a test for cruise operators and cruise lines in the epidemic.

“The crew will be provided with the option of temporarily staying on board or returning home. The company is responsible for coordinating applications with relevant countries and ports, and bears the relevant transportation costs.” Genting Cruises Group told reporters.

Crossstar Cruises said that in addition to the expiration of the contract in accordance with the relevant national and regional regulations, the company is also actively doing logistical work to ensure the daily life of the working crew.

The operator said: Several cruise lines have filed a request for resumption of sailing, and they are eager to resume operations.

The epidemic in China is now under control. Professor Qiu Ling said that China is expected to become the first region in the global cruise market to resume operations, and Shanghai is expected to become the first city in China to resume cruise operations. At present, several cruise companies operating in China have put forward a request for resumption of navigation and are eager to resume operations.

March 11, Shanghai Baoshan District Leaders, Representatives of cruise port companies and cruise enterprises started discussions. Professor Qiu Ling told reporters that multi-party cooperation has begun to study preparations for resumption, and to explore countermeasures and measures in response to the difficulties and problems encountered by resurgence. It is expected that the cruise will be resumed from May to June.

Ma Ruizhe also said that China’s cruise market is developing rapidly. According to the travel situation in previous years, May will be a peak travel time, and it will be the peak tourist season in July and August. “I believe the cruise home port market in China will usher in wind and rain After the rainbow, we are also making active preparations for the resumption of the future. “

“I believe that no winter will not pass, and no spring will not come. This is the control of the epidemic situation in China, and the same is true of China’s cruise industry.” Ma Ruizhe said.

The reporter saw on the official website of Royal Caribbean Cruises Co., Ltd. that the most recent cruise was the “Marine Spectrum” departing on May 24. It will depart from Shanghai, pass through Osaka and other ports, and finally return to Shanghai.

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Image source: Screenshot of Royal Caribbean Cruises Ltd.’s official website

Dr. Liu Zinan, Chairman of Royal Caribbean Asia, told the Daily Economic News that Royal Caribbean has entered the Chinese market for ten years. The outbreak will not affect Royal Caribbean ’s future business layout in the Chinese market. The company Will always be firmly committed to the investment and development of the Chinese cruise market. In 2021, the company will usher in the “Marine Miracle”, while covering more diverse routes and innovative destinations.

For the judgment of the industry recovery, Genting Cruises Group believes that if the Chinese cruise market can resume operations from June, it is expected that the overall situation in the second half of the year will remain in a downturn, and recovery may take until next year. However, in the long run, the potential of the Chinese cruise market is still huge, and it is basically good. The company’s confidence in the Chinese cruise market will not change.

Tuniu Cruises person in charge Lu Fengyu told reporters that Tuniu made a pre-judgment on the cruise market before the Spring Festival. Considering that the home port cruise will be temporarily suspended temporarily, a sufficient number of customer service staff are deployed during the Spring Festival to assist customers. Withdrawal and reform, from the perspective of the cruise market, the market recovery period after the epidemic, how to do a good job of identifying ports and embarkation passengers, onboard safeguards and other tasks is a huge challenge to test the comprehensive capabilities of cruise companies.

The person in charge of the Mediterranean Cruise Line (Shanghai) Co., Ltd. told the reporter of “Daily Economic News” that in order to cooperate with the epidemic prevention work, the company has gradually stepped up since March.Resumption of work, this month also launched an online live course for travel agency partners, showing them Mediterranean cruises through online courses.

The Royal Caribbean said that, although the company has temporarily suspended, cruise is a highly planned industry, and many tasks need to be prepared a few months in advance. Therefore, based on the current observation of China’s home port market, we have started to arrange Work accordingly to prepare for market recovery.

Despite the eager anticipation of resumption, large cruise companies interviewed by reporters of the Daily Economic News have stated that at present, the prerequisite for business development is to protect the health of tourists and crew, and cruise companies always put safety first. . On the other hand, how to restore consumer confidence in cruise ships is crucial.

Gastida Cruises said that the current priority is to work closely with the Chinese government and port authorities, while strengthening cruise safety promotion, improving prevention and control systems, strengthening communication with consumers, and planning cruise layout and product upgrades. To increase consumer confidence in the market.

Ma Ruizhe said that one of the challenges facing the recovery of the cruise industry is to make tourists willing to continue to choose cruise travel as a way to enjoy vacations. This requires the concerted efforts of cruise brands and industry partners to turn the “frozen period” into an “opportunity period” to welcome the majority of tourists with the best attitude, so that the public can rekindle their enthusiasm and confidence in cruise travel.

How to restore consumer confidence in the cruise industry? Professor Qiu Ling also put forward three points of thinking: one is to innovate the international public health cooperation mechanism, the other is to build a complete emergency management mechanism, and the third is to build a cruise industry anti-epidemic community.

In particular, Professor Qiu Ling mentioned that the difficult problems encountered in the handling of international cruise outbreaks have once again made us realize the complexity of cruise tourism at the international legal level and the importance of cooperative handling of international public health events. The epidemic occurred on a special carrier of cruise ships, which involved not only a single issue of the law of the sea, but also the intersection of international health law and the law of the sea. The establishment of a rapid response international cooperation mechanism should be the inevitable response to the cruise epidemic select.

(At the request of the interviewee, Yang Fan, Li Le, and Xiao A are aliases in the text)

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Reporter’s notes 丨 The long wind and the waves will have time

March 14 is a record-worthy day in the history of cruise ships. Some people call this day the “global cruise suspension day.”

A “black swan” that soared into the sky, set off a stormy sea. It fluttered its wings to endure suffering, and brought a series of chain reactions. We were heartbroken to witness this,Praying.

But at the end of the manuscript, bad news came.

Princess cruise’s “Ruby Princess” found confirmed cases, and this is just a microcosm of the global epidemic of new crown pneumonia. Fighting the epidemic is no longer a matter of a city, a country, or a sea, but an international cooperation that truly implements the idea of ​​a community of shared future for mankind.

I hope the tragedy will not happen again, and everyone can return safely. “Guaranteeing the safety and health of all guests and crew is our mission, please be confident in us”, this is the word that the reporter heard most in the interview.

Unfortunately, overcome the difficulties together. Today, major cruise companies have begun to arrange for crew members to end their contracts to return to their homes in advance to leave, while some employees who are still on the job may face difficulties in shortening hours and reducing wages in proportion.

The epidemic will eventually pass and the cruise market will eventually recover. History tells us that every crisis is accompanied by the restructuring of the industry structure. Some companies will die out, and some companies will perk up. But there is no doubt that the cruise industry, which has gone through a century, has already gone through hundreds of battles, and one day it will start again after the pain.

We look forward to this day.