Tuesday, July 5, 2022
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Carnival’s Plans to Operate “Full Ships” this Summer at “110 Percent Occupancy” Is Foolish and Irresponsible

Carnival Corporation CEO Arnold Donald recently stated on the cruise giant’s second quarter and business update call that Carnival Cruise Line is expected to operate at “110 percent occupancy” for the summer season. He stated “Carnival Cruise Line also became our first brand to sail its entire fleet in May and is expecting occupancy to approach 110 percent during our third quarter.”

The cruise trade publication Cruise Industry News  talks about a so-called “strong North American cruise market” and said that Carnival is “pivoting to add more capacity in the form of two redeployed Costa Cruises vessels under the Costa by Carnival umbrella.”

Cruise Industry News failed to address the obvious fact that COVID-19 is currently surging and cruise guests and crew members are being affected by the continuing pandemic. New and more contagious variants, BA.4 and BA.5, are wreaking havoc on the ships. According to the CDC, 100% of the 94 cruise ships sailing from U.S. waters have COVID-19 cases. Zero ships are designated green. 91 are orange and have met the threshold for investigation by the CDC. Just two are yellow.

Many members of the public have scoffed at Carnival’s plans. First, many expressed skepticism that Carnival can actually fill its cruise ships. The reality is that families thinking of recreational cruises are facing 100% of cruise ships having COVID-19 aboard per the CDC COVID-19 dashboard.  Guest face the prospect of spending their cruise quarantined in their cabins or being forced to incur hotel expenses while quarantined ashore. Additionally, there is an industry-wide shortage of crew members due to the pandemic and the fact that many crew members are not willing to return to the cruise industry after being stuck at sea for months during the initial COVID -19 outbreak.  Many ships are short-staffed and lack adequate cabin attendants, bartenders, and waiters.  As a result, some cruise ships cannot provide basic cabin cleaning and dinner services or usual entertainment.

Readers of Cruise Industry News’ Facebook page pushed back on Carnival’s plans. Many left comments, such as:

  • Only inside cabins are available on older, smaller ships.
  • And just because they’re willing to run at 110% occupancy doesn’t mean the boats are that full either.
  • Some ships feel crowded at full occupancy. Can’t imagine at 110%.
  • All they can do is overbook like the airlines do.
  • Sounds like the crap the airlines pull, and we see what is going on there…
  • That’s not a good sign, especially being short staffed now.
  • In its dreams. Where are they getting the crews?
  • Without a full staff. Super fun times.
  • Carnival is a disaster, fires, fights, fumes, what else could go wrong. 110% LOL.
  • What could possibly go wrong?

Carnival is currently facing unprecedented financial problems due to COVID-19 with staggering debt of $35,000,000,000 (billion) and one analyst (at Morgan Stanley) stated yesterday that Carnival stock could go to $0. Its stock hit a post-COVID-19 low of just $8.10 this morning, which is lower than the previous post-COVID-19 low of $8.49 in April of 2020.

Carnival is obviously motivated to pack its cruise ships with paying customers irrespective of the fact that it cannot adequately staff its ships or the certainty that many of its guests and crew members will become sick with COVID-19, with the more contagious variants (BA. 4 & BA. 5) spreading.

Humongous ships operating non-stop and filled with paying customers have always been a cornerstone of the cruise industry’s business model.  Incorporating in foreign countries and registering ships in feckless flag of convenience countries like Panama and the Bahamas in order to avoid U.S. taxes, U.S. wages and labor laws, and U.S. safety regulations has been the other cornerstone.

Huge cruise ships packed with passengers seem to be one of the factors which led the CDC issuing its “no sail” order due to the pandemic back in early 2020. In its first no sail order in March of 2020, the CDC noted that the “high volume of people” who are assembled and intermingle together is a key feature of cruise ships which increases the risk of COVID-19 transmission.

Carnival had an occupancy of around a little under 70% in the last quarter. It is questionable that it can increase its occupancy by 40%. If it does, it will face a backlash due to poor services during the crowded cruises.

Carnival’s expressed goal of sailing with 110% occupancy as COVID-19 is again surging is foolish and irresponsible.

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Image Credit: Carnival fleet – Carnival Corporation Corporate Information

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