The cruise industry is among the swiftly growing industries all over the globe. This is particularly due to the rising inclination of people worldwide toward leisure travel coupled with the increasing per capita income. For decades, the cruise industry has been an integral part of the global travel and tourism industry which is evident from its 2018’s valuation of $150 billion (as sourced by the Cruise Lines International Association). The cruise industry is making continuous efforts to improve and evolve with the government standards. The industry has planned to deploy new technologies and cleaner fuels, which include LNG, shore-side power, and advanced wastewater treatment system, and exhaust gas cleaning system (ECGS). However, these growth projections seem to get disturbed due to the COVID-19 pandemic.
Talking about the near to COVID-19 scenario, the global economy was already plunged into financial crisis throughout 2019, as some of the countries witnessed subdue growth, while other countries were struggling with slowdowns. The heightened trade war between the US and China coupled with the rising trade uncertainty continues to exert adverse effects on the global economy. Moreover, the intensifying tension between the US and Iran along with the tightening sanctions on Venezuela by the US have had negatively impacted the global economic growth. All these factors resulted in the weakening of global GDP, as per the World Bank. On top of these, the first incident related to COVID-19 on a cruise ship was registered in Japan. Diamond Princess of Princess Cruises was quarantined at Yokohama from February 4, 2020 for a month. There were around 700 cases and 12 fatalities registered on the ship due to COVID-19.
Similarly, there were several other cruise ships that have registered positive cases of COVID-19 in March 2020. While the case of COVID-19 on cruise ships comprises small percentage of overall global pandemic, the cruise companies are in an especially precarious position. Cruise ships are particularly susceptible to outbreak as it is quite easy for the virus to spread on a ship. This is due to the closed environment, contact between travelers from many countries, and crew transfers between ships. The government is also warning Americans against travelling by cruise ships. Adding to this, the largest cruise companies across the globe were effectively forced to shut down operations in March 2020. So far, no re-commencement guidelines have been announced resulting in huge loss to the overall cruise industry.
This financial setback is clearly evident through the shares of the almost every publicly-traded cruise line companies, which have suddenly collapsed. Such a low market for cruise line will affect the cruise manufacturing industry. The low revenue generated by the cruise line industry will directly impact the cruise manufacturing industry. Therefore, the cruise manufacturing industry is expected to decline in 2020 due to the outbreak of coronavirus. However, with certain growth in the cruise line industry in 2021 and certain innovation planned by CLIA for the upcoming cruises, will offer a modest growth to the cruise line industry in 2021. Post 2021, the cruise industry is expected to regain its passenger base and therefore will project a considerable growth in the upcoming years.
