When will all of Carnival Corporation’s cruise brands be revived in the United States and around the world? Arnold Donald, president and CEO of Carnival, discussed these and other current topics of interest to travel advisors in an informal discussion yesterday and answered questions from John Lovell, president of the Travel Leaders Group.
US/global soft restart
When we start over as an industry and as a company, unfortunately it won’t be with a light switch, Donald said. Not gonna happen. The ships, well, they’re all here now.
Instead, he said: This will be a phased introduction to gradually add ships as not all destinations will open at the same time due to different local regulations and conditions.
Although Mr. Donald (pictured right) said he could not predict a date for the return to service, what I can predict is that by the end of the year most, if not all, of our fleet will, I am optimistic, be in service….. I think there’s a good chance all of this will come back early next year if things continue to develop as they are now.
He cited advances in the treatment of COVID-19, the availability of inexpensive and relatively accurate studies, multiple brands of vaccine, and the availability of a large number of vaccines that may become available in the not-so-distant future: I think the combination of all this bodes well… and puts us in a good position.
Add to that everything we’ve learned about how to advance all the protocols on board Ultimately, it’s about containing proliferation, Donald said. Carnival Corporation’s goal is to ensure that the risk of a cruise is no greater than that of similar land-based activities.
Consumers, especially former cruisers, are eager to go boating. Donald pointed out that our bookings throughout the [pandemic] period have been very robust, so there is clearly pent-up demand, especially for cruises.
He said past customers tend to come back every few years and don’t seem to have any bookings for future cruises: We are very encouraged by what we see, and very encouraged by the attitudes and surveys we have taken, and the experiences we have had with the clients who have contacted us.
Conclusion? We’re almost a full year behind, people can’t cruise anymore, so there’s a lot of catching up to do, Donald said.
When Carnival Corporation returns to the sea, it will also be reborn as a company with 19 fewer ships than in the past. The result? Donald believes the company will continue to experience strong consumer demand before and during the reboot that exceeds its capacity: We do not see a crisis in consumer confidence.
However, an important step after the initial relaunch will be to lay the groundwork for stronger sales: Consumers who have not traveled in the past and create messages to attract them.
Over time, some of that [the pioneers’ decision to book] will come naturally because they know people who have traveled and speak. You know you’re crazy, cruises are great, you should come, Donald thinks. The word in your mouth will be strong.
He also noted that all lines will talk about improved protocols based on the current risk of COWID-19 and how the community perceives it, Donald said.
Canada and Alaska Decision
Lovell (pictured right) raised questions about the potential loss of an important shipping season in Alaska in light of Transport Canada’s decision to ban cruise ships from Canadian waters and ports until the 28th. February 2020.
Could there be a partial season in Alaska if this Canadian order is changed or if the United States makes an exception to its laws prohibiting foreign-flagged vessels from sailing between U.S. ports without calling at foreign ports?
Do you think there will be an Alaska season in 2021, or is it a total bust at this point? Lovell asked.
Given the unexpected length of the [Canadian] order, we will need some time to evaluate whether there are options to keep part of the 2021 season in Alaska, and we are working hard on that, Donald said. We will of course consult with the US and Canadian authorities before taking further action.
He said he hoped that if the Canadian injunction was not lifted, a temporary exemption could be granted from the U.S. law that allows the company’s ships to sail from one U.S. port to another without calling at a foreign port.
Alaska needs it, Donald said. The people of Alaska need it, and so many people want to go there, and a cruise is the best way to get there.
He hopes that will change, but if it doesn’t, our brands will obviously have to cancel this year’s Alaska and Canada/New England seasons. However, Donald said the company plans to go onshore in 2021. This is the case with properties that attract visitors from Denali, Fairbanks and Kenai, among others.
Asked by Lovell about the Caribbean revival and zoning issues, Donald said: I don’t expect big defeats, but uneven.
He said that each nation and island has its own local rules and views, so we need to be flexible and adaptable, but that is still the case, because before COVID-19, Carnival Corporation ships sailed to 700 destinations around the world and transported 13 million people a year.
He has faith in our intentions, and I am sure the industry never wants to be in a situation [like the one we were in at the beginning of this pandemic]. Seats were closed while people were on board the ship, resulting in delays and cancelled itineraries. People didn’t know what to do, he admitted.
Instead, he said, the airline and its carriers would determine in advance with each destination what would happen in the event of COVID-19 symptoms or incidents on board, so everyone knows what’s going to happen – and in advance, so everyone’s vacation isn’t so disrupted.
CRC framework and progress
Donald stated that the cruise industry at the U.S. Centers for Disease Control and Prevention (CDC) is in the process of establishing the overall framework for a possible reboot in the future, and that the only active part of that framework is the breaking part where we have a crew on board.
Because ships are not planes that can be parked in a hangar, they have to stay in operation, he said, so that’s the part that’s in operation now.
As for the next step in the resumption of cruises, we are awaiting more technical advice and will have to wait and see what eventually comes out of the CDC.
Mr. Lovell specifically asked about the status of the trial sail mentioned in the CDC concept of conditional sail. Are there starting dates or deadlines? Donald responded in the negative, citing the change in administration, the new CDC director and the fact that even though they are trying to get the vaccine to market, there is a lot going on there and they have a lot of priorities. We are part of that, I hope, he added, pointing out that the company continues to work and communicate with the CDC.
While it is clear that it will take longer than any of us would like before there is a concrete plan and timetable, in the meantime the pandemic has grown more than anyone would like, he noted.
In addition to the CDC, other countries around the world have their own rules and regulations that must also be followed. Our top priority is compliance, environmental protection and the health, safety and welfare of all, Mr Donald said.
On the vaccine front
The vaccines have arrived very quickly, but still more slowly than any of us would have liked, he said, referring to the recent start of vaccine distribution. He says it’s just circumstances.
We’re all in this together, said Donald, who promised to continue working with the CDC, health authorities in other countries, and scientific and medical experts.
Will the company make vaccination mandatory for the crew? Carnival now sails from Germany without them, as Donald mentioned. Making a statement about the need for a vaccine when in fact there is no vaccine for the entire crew, we wouldn’t do that. And in some places, it would be illegal to sanction it. We have to let it go.
He stressed: I wouldn’t rule it out, but I wouldn’t say for sure today that we will, because it may not be necessary or possible. What we’re going to do is what we’re doing now – make sure that protocols and measures are in place to reduce the risk of the virus spreading.
Operating skills COVID-19
But I want to share with you that you see the light here, Donald told the audience. The conversations change. Knowledge about COVID has changed. The ability to manage COVID has changed and moved things in a more positive direction.
So the world is going through a severe storm, but we will weather it, and that’s the trick, because we just have to weather it, he said. I know it’s hard for the people there, and it’s certainly hard for us ….. On the other hand, it will be those bright and joyful days that we all look forward to.
Mr. Lovell explained how his organization and the various retail brands and business models it represents have made radical changes to our business model, to our financial model, have done everything to save money, whatever that may be.
It wasn’t easy, he said: It’s a lot of work, and it was very difficult. But he thanked and congratulated the board members who have worked so hard to build their business and keep it going. It seems so unfair, but I really sympathize with you.
Last year, Carnival Corporation took steps to honor the consultants’ reimbursement commissions and allow them to collect commissions on future cruises. Although there are different nuances from brand to brand, we tried to make the best of it, Donald said. In case of full payment, we will try to get a commission whether the cruise goes ahead or not.
Moreover, he added, each brand works with its partners to see what can be done. Unfortunately, we are in the same situation, he said, pointing out that while Carnival Corporation has raised a significant amount of money since the pandemic began, we unfortunately have a huge burn rate of $600 million per month.
So he said the cruise line is limited in what they can do beyond what has already been mentioned, but we are in the same boat. We want to hear it. There are ideas we might want to pursue, as travel consultants are very important to a company’s business….. We really appreciate it and want to work with everyone, but it is a complicated situation.
Donald concluded his remarks by explaining that travel brings people together and that cruises in particular have this effect. Our crew members come from 145 countries. We have guests from over 190 countries, he said. They are different, with different backgrounds and belief systems, but they discover what they have in common, and when they do, they learn to celebrate differences rather than fear them.
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