Has the cruise industry recover?

Cruise bookings this year are projected to come close to 2019 numbers but likely fall short of prepandemic levels until 2024, according to a new report from Phocuswright. The report, the U.S. Cruise Market Report 2022-2026, shows 2023 will be a significant year for the cruise industry's recovery.



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He added: Cruise is expected to recover faster than the larger tourism segment. Data found that global capacity is predicted to grow by 19 percent to more than 746,000 berths from 2022 to 2028. Research also showed that 85 percent of those that have cruised will sail again, six percent higher than pre-pandemic totals.

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CLIA forecasts passenger numbers will not only meet but exceed pre-pandemic levels by the end of 2023. And according to Cruise Industry News' cruise ship orderbook for ocean-going vessels, nearly 40 new ships are lined up to debut this year alone, with more than 75 vessels on order through 2027.

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Most cruise lines are now operating at full capacity, with the age of Covid restrictions in the rear view mirror. But questions remain.

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Revenue in the Cruises market is projected to reach US$25.14bn in 2023. Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 9.29%, resulting in a projected market volume of US$35.87bn by 2027. In the Cruises market, the number of users is expected to amount to 32.53m users by 2027.

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Carnival holds more than $4 billion in unrestricted cash as of the end of Q4. And since most analysts forecast a return to profitability by the second half of fiscal 2023, Carnival will likely survive. However, thanks mainly to the pandemic, it holds approximately $34.5 billion in debt.

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After gloomy performances during the pandemic, cruise stocks look poised to deliver gains for investors. Battered comps from slow travel make it easier for cruise stocks to achieve triple-digit year-over-year revenue growth. And some cruise companies have already reported that type of growth.

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One of the best changes to cruising in 2023, is the end of COVID protocols (on most cruises and destinations). This means that cruise lines no longer require their guests to take a COVID test before their cruise vacation. Passengers and crew are no longer required to wear a mask.

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Cruising in 2023 is mostly back to normal following the pandemic-induced changes implemented across the industry in 2021 and 2022. Pre-cruise testing has been almost entirely abolished, ships are sailing at full capacity, and new ships are being constructed.

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Royal Caribbean has a massive amount of debt on its balance sheet that it accumulated during the pandemic to stave off bankruptcy. At the end of Q2, the company had $18.7 billion in long-term debt and $1.7 billion in current debt (meaning debt due within 1 year).

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You absolutely do not have to do shore excursions on a cruise. You are free to come and go at will from most cruise ships while they are in ports of call. Shore excursions are simply one means to explore the areas visited by the ship and to participate in available activities off the ship.

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Cruise Fare Increases In 2023, the cheapest you can get an ocean view balcony is around $3,900. That's an increase of over 77%. Even if you plan a cruise for 2024, the cheapest you can get for a similar cabin is around $3,100, which is close to a 41% increase.

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The CDC's tally of norovirus outbreaks so far confirmed on cruise ships in 2023 is already higher than any annual outbreak tallies since 2012, when the health agency recorded 16 outbreaks.

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Over the past 100 years since the RMS Titanic sank in 1912, only 18 cruise ships and some ocean liners have been publicly known to have sunk. And, over the past 50 years, only four cruise ships have sunk while navigating on a cruise.

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Some of the environmental challenges that cruise lines need to address are air pollution from heavy oil, wastewater discharge issues, habitat disruption, and overtourism. The 'elephant in the room' is that cruise lines are currently using heavy oil – also known as the dirtiest of the dirty oils.

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How Much Debt Does Carnival Corporation & Carry? The chart below, which you can click on for greater detail, shows that Carnival Corporation & had US$33.8b in debt in May 2023; about the same as the year before. However, it also had US$4.47b in cash, and so its net debt is US$29.3b.

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