Is the Cruise Business Crippled Permanently?

The coronavirus outbreak has so badly crippled the cruise business that it may not come back for months, or even years. The broader question is whether the industry will ever return to its previous size. The history of cruises is filled with the spread of flu on ships, and this dates back for years. The memory of the COVID-19 will keep people off ships and will heighten the memory of how dangerous these trips can be.

The cruise ship the Grand Princess, now anchored off San Francisco, has reported 21 confirmed cases. The more than 3,500 people on board have to be in a panic. The federal government is still at work to put these people into facilities onshore.

Cruise ship stocks have been decimated by this and other recent, nondeadly incidents. Carnival Corp. (NYSE: CCL) stock is at the lowest level it has traded since 2009. Royal Caribbean Cruises Ltd.’s (NYSE: RCL) stock is at the lowest point since 2016.

Just a week ago, a Royal Caribbean ship suffered from the spread of flu to 82 people. Eventually, none tested positive for the novel coronavirus. It was still a public incident that showed how quickly a disease can spread in a contained space.

A look at cruise ship illnesses back to 2014 finds many ships on which people were sickened, either by a contagious disease or by the food. These cases became a backbone of academic studies on how disease on ships is spread.

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The Caribbean Princess and Explorer of the Seas cut trips short at about the same time in 2014. Both ships’ passengers suffered from a form of gastrointestinal illness that caused vomiting and diarrhea. Between the two, hundreds of people were affected.

Ship Technology published a long article on illness aboard cruise ships last year. The article called norovirus “a formidable foe for cruise operators.” The research pointed out that the disease can be spread by food, water and infected people.

The cruise industry’s answer to these outbreaks is that only a tiny number of people out of all passengers get sick. However, cruise ship companies will find it much harder to make that argument successfully now that a deadly disease is part of those statistics.

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