Cruise Line CEO Says People are Scared to Travel Due to Coronavirus

Norwegian Cruise Line Holdings CEO Frank Del Rio had words of concern and hope, both at the same time, late last week.

Speaking about the coronavirus, which has infected more than 77,000 people and caused more than 2,300 deaths, Del Rio was blunt.

“Business is soft, people are scared to travel,” Del Rio said, then added a qualifier – “until we see the leveling off of new cases.”

Fearful and optimistic.

Right now, cruise lines have no choice but to prepare for the worst and hope for the best. As the virus continues to grow, with concerns now shifting away from China and toward Europe, the re-named Covid-19 virus has already taken a bite out of the $45 billion cruising industry.

As Leticia Miranda wrote in a great online article for NBC News, Carnival, Norwegian and Royal Caribbean have already combined to cancel nearly 40 cruises and re-route more than 40 more. All three have taken a hit in the wallet, with stock prices down 10% to 16% among the big three since January.

But, to its credit, the cruise lines have responded quickly. After all, this is not their first rodeo when it comes to contagious viruses and health issues.

Cruise lines have increased their cleaning and safety measures, even going to the lengths of denying boarding to passengers who have traveled to infected areas.

“The industry is really erring on side of caution to reduce the risk of introducing (the) virus on board,” Brian Salerno, spokesperson for Cruise Lines International Association trade association, said.

But Salerno also noted that China is an emerging market for cruise lines, which impacts the bottom line for Chinese travelers who fly to Europe then board a cruise back to the mainland.

Still, as Del Rio noted, there is optimism.

“If you look at prior outbreaks what you see is kind of short-lived duration impact on booking trends in the cruise space followed by a return to normalcy over the subsequent months,” Sharon Zackfia, an equity analyst with William Blair, told NBC News. “The cruise industry is really resilient and I don’t expect we’ll be talking about this in 2022.”

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