LAST UPDATED AUGUST 24, 2020 - YOUR QUESTIONS ARE LISTED FROM THE TOP DOWN IN ORDER RECEIVED
Q - This news about the problems faced by Genting Kong Kong, Crystal Cruises owner, is really worrisome. We are booked on a Crystal Riverboat sailing along the Rhine next summer and we have paid a substantial deposit. Perhaps more urgently, we were booked on the Crystal Symphony this June in Europe. We have not yet received our refund for that cruise. My question has to do with the insurance I took out for our Rhine cruise. If Crystal were to declare bankruptcy or. somehow go out of business, would the Travelex insurance policy I took out cover me under the terms of what they call "Supplier Default"?
A - The Supplier Default provision of the highly-rated Travelex insurance policy, only applies if you have taken out the insurance within 21 days of your initial deposit. Crystal was a covered cruise line so that insurance coverage would be valid. Crystal would not have to technically declare bankruptcy to make a claim but they would have to have gone through certain measures indicative of an inability to operate their cruises as described in their brochure fine print.
So yes, if you took out the policy within 21 Days, you can initiate a claim. But be aware that before a claim would be considered, the insurance company will request that you first try to have your credit card company reverse the original charges. That is the first step before a formal insurance claim will be processed. As always, we urge you to verify the above with Travelex directly as we are not licensed insurance agents and we cannot offer specific advice in this area. Read your policy carefully and then contact Travelex. You can reach them at 8-867-6880.
The following definition of Financial Default might be helpful:
“Financial Default” means "the total cessation of operations due to insolvency, with or without the filing of a bankruptcy petition by a tour operator, Cruise line or airline."
Q - We are booked on the Ponant Line next year sailing on an expedition that will circle Iceland. Like so many of your clients and online followers, we are concerned about whether or not our cruise line, and many others, will still be in business next year.
A - There is no indication, at this time, that Ponant is in any imminent financial danger. The company headquarters are in Marsailles, France so accurate financial data is not plentiful. Ponant has long-term charter agreements with Tauck, Abercombie & Kent, and other major suppliers so there is heavy demand for their product and they are on an expansion tear. 2021 bookings for their full and partial charter products are quite solid. There are no current advisories or financial alerts related to this company that have appeared in the industry press. Major travel insurance carriers have not issued any alerts regarding Ponant. They continue to be endorsed and sold by the major consortium travel groups with whom they work.
Q - The news about Crystal has us concerned as we are planning to sail aboard the Endeavor to Iceland next year. There is not much we can find about the Hong Kong owners. Please consider including material from Asia that might help us understand the real financial condition of this company. Your efforts to inform are truly appreciated.
A - This piece from Bloomberg New Asia Financial Desk is one of the least biased summaries we've seen to date:
About a month ago, Genting Hong Kong Ltd. restarted two- and three-day excursions around Taiwan, exclusively for residents of the island that’s seen success in containing the coronavirus outbreak. Genting is the only liner to have resumed operations in Asia among members of the industry’s trade group, according to the Cruise Lines International Association.
Genting’s Dream Cruises said about 900 passengers are booked on each of its trips in July and August, hitting the 50% maximum capacity allowed for social distancing. This month, it announced its ship, Explorer Dream, is reopening the casino, which may help bring in much-needed revenue.
“The Taiwan sailings prompt the investor or creditors to believe that Genting is still running the cruise business with open casino and this may be an important asset for the company to negotiate with creditors and investors for proper restructuring,” said Banny Lam, head of research at CEB International Investment Corp. “Reopening helps boost sentiment and hope, but doesn’t solve the problems.”Genting isn’t alone. The cruise industry is among the hardest-hit by the global health crisis, with many ports still closed to the luxury liners due to continued concern about Covid-19 infections while travel restrictions and curbs on flights have forced the industry to suspend operations. Controlled by Malaysian tycoon Lim Kok Thay, Genting now joins industry giants such as Carnival Corp. and Norwegian Cruise Line Holdings Ltd. in seeking capital to stay afloat.
Norwegian, Carnival, and COVID19
Norwegian Cruise Line has raised about $3 billion after initially expressing concerns it may not survive in May. Carnival, the industry’s biggest operator, has also raised almost $9 billion during the pandemic.
This month, Genting warned it expects a net loss of at least $600 million for the first half of the year due to the suspension of operations across its cruise businesses. The company said it’s working with advisers to raise funds. News that the company has stopped payment to creditors sent shares tumbling 38% on Thursday in Hong Kong before rebounding 5% Friday.
The single cruise and casino operations around Taiwan covers only a small revenue share of the entire company, Lam said.
Genting Hong Kong is likely to reach a “pragmatic agreement” with creditors and get additional financing to stay afloat until it can fully resume cruise operations, UOB Kay Hian’s Kuala Lumpur-based analysts Vincent Khoo and Jack Goh wrote in a research note.
The company’s debt restructuring only applies to financial creditors of Genting Hong Kong and business for Dream Cruises will be unaffected, the cruise line said in a statement.
Genting’s Dream Cruises line made headlines when it resumed sailing July 26, becoming one of the few internationally to restart operations while most of the industry has pledged to suspend cruises until Oct. 31. Genting will continue the sailings, dubbed as “island-hopping” excursions, which were previously planned to continue through Oct. 16, according to a Dream Cruises representative.
Social Distancing Aboard Ship
Kate Lee, a 33-year-old blogger from Taiwan and her husband, said they booked the last available room on an Explorer Dream cruise earlier this month after another trip they preferred was full. Despite no buffets and the need to wear masks in public areas, the couple enjoyed their very first cruise on a half-empty ship with no lines at restaurants.
“It was very comfortable, not odd,” she said. “I liked the social distancing.”
Before restarting operations, the company said the ship underwent a deep cleaning, along with a slew of health measures, including a 14-day quarantine of crew before the voyage. The ship is equipped with 22 negative pressure rooms that can be used for quarantine, plus an emergency plan to deal with a Covid-19 outbreak, according to the company.
Genting Hong Kong, formerly known as Star Cruises, operates the Star Cruises, Dream Cruises and Crystal Cruises lines as well as a casino in Manila and a shipyard in Germany — businesses that have seen plummeting revenue during the pandemic, the company has said.
The company has been angling for Asia’s fast-growing and competitive cruise market driven mainly by Chinese tourists. Plans for expansion included two gigantic so-called “global class” ships that were due for launch next year. The Global Dream was billed to feature an amusement park and the largest cinema at sea.
Those ambitions, and the pandemic, led to trouble.
The company said its subsidiaries Dream Global One Ltd. and Dream Global Two Ltd. failed to pay fees of about 3.7 million euros ($4.4 million) on Aug. 17 related to the “financing of the construction of certain ships,” and said the non-payment would constitute a default as per the units’ finance documents. Genting Hong Kong guarantees the payment of the fees."
Q - We are booked on Oceania, not Crystal but the news boards on Facebook have made us really nervous. How do people like us keep up with the latest cruise line financials? How do we know that what is happening at Crystal Cruises won't also be happening at Oceania.? And, why hasn't this been on the evening news?
A - The debt restructuring of a Hong Kong-based cruise corporation is newsworthy in the financial pages, but it can hardly compete with our Presidential Election, Hurricane and flood damages, and the fight of our lives dealing with Covid in this country. So no, the evening news may well skip this story. Hopefully, your travel advisor is keeping you updated. For information, we would suggest that you read "Cruise Industry News" and "Travel Weekly" for the latest industry coverage regarding the relative health of the major lines.
This case is a bit unusual in that unlike the three major cruise brands, Crystal is not owned by a US-based firm. That changes many of the financial reporting dynamics.
Q - As you know, we are booked on Crystal in 2022. Now, we are reading online that the company is in a situation where the company might have to sell some of its ships. We realize this is a constantly changing situation but we would like to know how worried you are and what you think may happen. We've sailed Crystal seven times previously and we're not going to lose hope that all will turn out well unless you strongly suggest we do so.
A - This is fast-breaking news and anything you see in writing from any source is likely dated information. The fact is that Genting, Crystal's owner, suspended all payments to its creditors other to maintain what it describes as "critical" services. Debt restructuring is normally not held in the glare of publicity, particularly when the bankers and lenders are based abroad. Crystal owns extremely valuable and profitable assets. Any number of lines would like to partner with the Crystal brand and we know that bookings for 2021 were quite strong based on pent-up Covid demand. As Crystal loyalists you might want to wait this out to see how it develops. Some financial white knight may be waiting in the wings. But you also have to be realistic that refunds to booked guests would likely not be a top priority in a bankruptcy reorganization plan.
We will be sending all of our booked guests updated coverage of Crystal's current financial outlook later today.
Q - We have just heard from friends here in Philadelphia, who are booked with us, that Crystal Cruises is having financial issues. We are under deposit to sail with them out of Barcelona in June. We booked our cruise with Crystal about two weeks ago. We follow this site and really need some advice as we're sure it is affecting many of your followers. Thanks so much.
A - Yes, Crystal is undergoing some rather serious financial turmoil as the line's Hong Kong-based owner, Genting, has suspended payments to creditors of almost $3.4 Billion. The pressures on Genting's worldwide operations are, of course, linked to the Covid-19 crisis. Crystal Cruises, based in California, has responded that it is "still solvent" after its parent company has revealed, in the past 72 hours that it has defaulted on its debt payment.
Crystal has informed guests, travel agents, and creditors, that "the company is not going out of business". Crystal further announced that "whatever option our parent company pursues, it will allow Crystal to operate its business."
In your specific case, here is what we would advise you to do:
01 - Since you booked with Crystal less than 21 days ago, you should immediately contact the line and have the booking turned over to a trusted travel agency/advisor who can act as your advocate and who can provide updates to you should they become available. You do not want to be working with Crystal on your own because you represent far less revenue to the company than would a high producing agency. There are a number of travel agencies in the Philadelphia area that are affiliated with one of the better luxury cruise consortiums like Virtuoso, Travel Leaders, and Signature. Choose one of them as you will then be able to receive proper counseling as well as potential on-board benefits when your cruise operates.
02 - If you are uncomfortable proceeding with your cruise arrangements see if you can get your credit card company to reverse the charges you made for deposit. This may be easier because your reservation was made so recently. But before taking this action, discuss it with your travel consultant because once you deal with the credit card company and dispute the charges the travel advisor is normally removed from the equation and you will no longer be processed for a refund through normal channels. It will become an issue between your credit card bank and Crystal's bank.
03 - If you followed our recommendation to not take out the cruise line's insurance and, instead, purchased a private insurance policy for your trip, you may well be covered for "supplier default". This would mean that if Crystal goes bankrupt, you would be covered.
Q - This must be a question you get all of the time, but we would really like to know if the press reporting about Covid-19 aboard cruise ships is, in any way, exaggerated? We are considering cruising again next April but we just don't see the statistical evidence to justify it. Are they really floating Petri dishes?
A - We think that the honest answer is that some of them really were. The CDC directives, the new protocols, and the suspension of cruising as we know it, were all justified based on the number of outbreaks. But there were some major reporting errors and biases which seem to always come about when journalists with no cruise industry experience are trying to describe what has taken place aboard a ship at sea.
The big story missed involved a failure to identify the difference between mass-market and smaller, upscale luxury lines. Here is the heart of the evidence that just was never mentioned in mainstream press reports:
A search of CDC records only shows 1,142 cases of norovirus reported in North American waters in 2019. The cases were on eight ships, including three incidents on ships of a European cruise line.
In 2019, an estimated 14.5 million passengers cruised in the major North American sailing regions – the Caribbean, Alaska, Mexican Riviera, Bermuda, Canada and New England, Hawaii, Panama Canal, and on rivers, according to the 2020 Cruise Industry News Annual Report.
That means the norovirus incident rate on cruise ships was 0.008 percent in the region.
By comparison, the CDC also reports that some 20 million Americans shoreside get sick from norovirus each year for an incident rate of approximately 6.1 percent.
Cruise Ship Norovirus Rate Last Year 0.008%
Non-Cruise Land Infection Rate 6.100%
Of course, the other "forgotten" portion of the cruise story is that not a single cruise line on cruisetruth.com's rankings of the world's top ten cruise lines had anything like a serious Covid-19 Outbreak. Not a single one.
Have you read that in any of the mainstream consumer travel media?
Q – We are, like many of your clients I suppose, going a bit stir crazy. This is written in early June and we are anxious to get away with the family, our two teenage boys, for about a week during this summer or later in the year during the Thanksgiving Holiday. This is all about getting my family a trip they can look forward to and our being together as a family. Whether it is a cruise or a tour does not really matter. What does really matter is the health and safety of my family. We know Covid is real, it is not a hoax as some of the idiots on TV are suggesting So, my question is how do we plan an upscale vacation, with whom, what conveyance, and what is the first step? We live in Ohio and we would love something beachy or visiting islands if possible. We’re not big on cruising. Could anything work this August that would meet my safety requirements?
A – We do think that August is pushing it a bit. We want to suggest that you look closely at a Villa rental with housekeeping included. This is one of the hottest current vacation options because it eliminates most of the need for social distancing. You can consider any of the islands in Hawaii, and there are some lovely villa options that are beachfront in Mexico or the Caribbean, particularly the British Virgin Islands. The first step might be to go the web site of the best Villa rental organization, Villas of Distinction. It can be booked through your travel consultant on a complimentary basis but you should review the site first (www.villasofdistinction.com) For your family, this is, in our view, the best option. Beaches and day trips will certainly be available but you will still be able to do the necessary social distancing to achieve your comfort level.
Q – We are planning a road trip to several American cities before we embark on a longer cruise sometime in late 2021 or early 2022. We will, of course, as avid followers of your work, be staying at Mandarin Oriental, Four Seasons, and St. Regis type properties. We keep hearing about “post Covid new normal” but we can’t put our finger on exactly what changes will occur in the guest experience after we check-in other than the fact that the staff will all be outfitted in masks like the Lone Ranger. Can you give us a quick glimpse at what the coming hotel stay changes might involve? Thanks. So appreciated.
A – This is a rather fascinating challenge for the hospitality industry. In recent years, major brands have tried to walk a very thin line between differentiating properties while meeting expectations in terms of accommodations and policies. But now, the Covid response has to be unified across the brand so guests know exactly what they can expect.
We can get a glimpse into the new hotel normal from some of the policies being discussed by upper management at the Four Seasons in New York and other major lux chains:
- The number of “object touch requirements” will be reduced. That means mini-bars will be removed as will extra linens, pillows, and hangers.
- Room service, for now, is a not too distant dream.
- Restaurant buffets, including breakfast, will become a relic of “past ages”.
- Communal shared tables will be removed.
- Restaurants will be operated at far less than 100% capacity.
- Arriving guests may be subject to temperature checks. They will be given PPE equipment.
- Early arrivals will likely be given a “Welcome Breakfast Basket”
- Spacing in all public areas will be re-designed to provide social distancing.
- Room keys will disappear to be replaced by key card entry.
- Some properties will begin requiring corona-free certification certificates when they come available.
- Gyms and Spas will be re-evaluated with new cleaning and use initiatives. Many will simply be closed.
- Room filtration systems will be enhanced and new procedures for cleaning each room are being developed to adhere to current CDC guidelines.
Q – I am in the investment and securities business. Just wondering if you could give me one fact that I might use in a report that will demonstrate the effect Covid has had or will have on the travel industry. We all know it is substantial but it is hard to drill down to get specifics. Looking for your take on the one fact that “says it all”. Thanks so much and trust this is not an imposition.
A – The one that struck us occurred during the week of April 12th when Covid chaos seemed to reign. The Airline Reporting Corporation processes airline tickets for travel agencies. Comparing the one-week sale of airline tickets for future travel in April 2020 with April figures for the same week in 2019, ARC found a 93.8% decline in the total number of airline tickets sold. These were the “The days that thoughts of travel died”. The miracle is just how quickly that trend has been reversed.
Q - I think I just came across a bit of a Covid rip-off and was wondering what you thought before I go off the deep end. Received a mailing from Crystal and they are offering some incredible rates, it says, on a variety of seven-night itineraries including the Rhine, Danube, and even Tulip cruises round-trip out of Amsterdam. The catch is they want all of their money upfront and there is no refund if I cancel. I like a deal like the next person and I know I will find them in Europe if I keep looking, but this pay in full – no refund deal seems like Crystal has decided to cash in on this Covid crisis. Is this something I should be considering or do you agree with my concerns?
A – Not only do we not agree with your concerns -we can’t find a single statement in your e-mail with which we can agree. We can’t speak for Crystal, but it strikes us that you may be more comfortable traveling with another company – why not wait until Wal Mart starts a riverboat line?
Here are the facts: Crystal has been offering two-for-one rates which brings the price of a one-week river cruise on the top-rated line to somewhere in the vicinity of $7200 per person. Crystal is an all-inclusive line.
There is a current promotion that you are referring to that is priced at half the two-for-one rate. That means you can sail Crystal at a rate of just under $3700 Per Person. To qualify for this rate you are required to pay in full and the fare is non-refundable. We have, quite frankly, never seen a two for one applied to an existing two-for-one offer. These are obviously an attempt to fill Crystal’s riverboats in advance of the 2021 season and it is working. The offer is capacity-controlled and many dates are sold out. One of the components of the offer is that you get upgraded to the best deluxe stateroom available.
Is this Covid pricing? We suppose it is. There will be a glorious bouquet of early booking offers arriving in the next two months. In order to keep investors, crew, and shore personnel happy and employed, these boats, as well as ocean-going ships, need to go out at capacity. With offers like the one above, that should not be particularly challenging.
Q - We are 90 days out from our Uniworld Enchanting Danube trip which I’m confident will be canceled. The first Enchanting Danube cruise listed on the updated Uniworld site starts on September 6. We were wondering what our best option is. I believe if we cancel with Uniworld within 90 days, we get 80% back. Would that be a cash refund?
At this point, as much as we love Uniworld, we are concerned about a different cruise experience or their solvency…. It was recommended that it would be wisest for us to wait for Uniworld to cancel. Does that still hold true considering their cancellation policy?
A - We want to be sure that you are clear that if you cancel today you would lose 35% of the cost of the cruise fare as well as your insurance. However, Uniworld is not going to keep that 35% - instead, they will retain it as a future credit. This is much more generous than many of their competitors are offering.
If you cancel within 89-60 days from the departure date you will receive 65% of the fare back to the credit card with which you paid and 35% (the “penalty”), will be held as a Future Cruise Credit. The entire penalty schedule is as follows:
- 119 - 90 days 20% of the fare
- 89 - 60 days 35% of the fare
- 59 - 30 days 50% of the fare
- Less than 30 days 100% of the fare
They do have another offer that may work very well for you. If you choose to move your current sailing and cabin category to the same sailing next year, they will honor 2020 prices and allow you to switch with no increase in fare. In fact, you can switch to almost any comparable seven-day sailing (other than September 2021) and book it at 2020 fares.
We don’t have the financial crystal ball your question requires but we can tell you that Uniworld is part of a large, successful travel group: The Uniworld Boutique River Cruise Collection is located in Los Angeles and the company operates a fleet of 21 river-cruising cruise ships along the rivers of Europe, Russia, Egypt, and China. Uniworld also has operational offices located in the Netherlands, Switzerland, France, and China. The company is part of The Travel Corporation group, which also includes businesses such as Trafalgar Tours and Contiki Tours.
The consumer media is not reporting one important aspect of this situation. Riverboat bookings in Europe in 2021 are currently running 6-9% ahead of this same time last year. At Churchill & Turen, we are running into any number of sold-out or category unavailable situation in prime season Rhine and Danube sailings. That leads us to not worry very much about the riverboat sector as opposed to Meeting Planning or Business Travel operators.
On the other hand, it appears that Uniworld has furloughed about 50% of its US staff. It is difficult to get anyone to answer their phones and refunds, please note, are taking as much as three months to process.
So what do we think you should do? Given the stress this has caused you, together with the fact that the cancellation fee will be set up as a future credit anyway, we would forego the extra 10% you would save by waiting and go ahead and cancel now. But, again, understand that the refund will take several months.
Q - We've traveled, with your assistance, via Tauck several times in the past (including China, Australia/NZ, Spain/Portugal). One of the favorites was Africa (Botswana, SA, Zambia). We enjoyed it so much we'd like to do it again --- say September of next year to Tanzania, Kenya, Rwanda. As I'm just starting to even think about this, I first checked out your website here. I noticed that you told someone you wouldn't suggest an African safari trip unless it was with one of eight or so companies. That list did not include Tauck. Can I ask why?
The real question, of course, is air. We live in the DC suburbs and wonder if post Covid the airlift to Africa will still exist. Any idea how we would fly? Should we be worrying at all about the virus for a September trip next year? We read something about Africa being “next”. Thanks so much for these Q and A’s. Extremely helpful.
A – Let us respond to the second portion of your question(s) first. Travel to Africa at any time in 2021 should not be an issue. If Covid does hit the southern hemisphere it is predicted to occur this summer. By September of next year, you can almost count on a vaccine or appropriate medication.
The routes to Africa have generally been quite profitable for the airlines and slots to fly routes to the continent often take years to materialize. Non-stop service from JFK in New York to Nairobi, a 13 hour, 45-Minute ride on Kenya Airways, will make the trip over easier.
Regarding your choice of tour operators for this journey: There are two sides to any response. The first is that we would have a level of comfort recommending Tauck to you as you used them in South Africa and loved the experience. We can promise you the same general kind of experience with Tauck in East Africa. Tauck’s standards are maintained on virtually all of their programs. So that places your question in a unique context.
If you had not experienced Tauck, they would not be our first recommendation. Here is why:
01 – They are not considered a top-tier Africa operator.
02 – They outsource their arrangements throughout Africa and have no on-site offices.
03 – They do not own their own training facility like Micato or A&K.
04 – Their groups are larger.
05 – Given the fact that they do no private arrangements of any kind, their own connections regarding accommodations are on a group basis. Most of the better camps will not allow groups to book their properties. No upscale lodge in Africa wants to be known as a group property.
06 – In terms of medical or other emergency needs, we think that Tauck, with no real office or staffing presence, might not handle things as well. That is not to say we have any concerns about a professional response. It has more to do with the fact that other top operators in East Africa are better connected to the medical community.
07 – The top tier operators tend to attract a more upscale clientele – but that is partly due to the cost.
08 – If there is an issue – Tauck is a big corporate entity in almost every part of the world. A company like Micato does Africa – period. You can reach the CEO on the phone.
09 – The leading Africa operators are tied in to the local communities in ways that Tauck is not. Their charity work is legendary and that makes for all sorts of local contacts.
10 – Many of the guests on Tauck Africa choose the program based on its lower group cost.
Do we think you should not do Tauck again? Absolutely not. We think you should strongly consider them as you know exactly what you will be getting and it is still going to be a truly memorable journey. But we would not suggest you move forward before spending some time on the Micato or A&K Africa web sites and discussing your options with your consultant.
Q – We would appreciate a bit of crystal ball gazing – what do you imagine our new world of travel will look like going forward? More specifically, what can we expect to start seeing in 2021 when we are planning two likely overseas trips?
A - Covid-19 will create systemic change in our industry and it will accelerate some predictable future changes in the way we do business.
To succeed going forward, agency groups and suppliers will need to design a new triangular approach to business. The three components are:
- Trusted and certifiable cleanliness standards in all aspects of the vacation experience
- Privatized luxury in a self-contained setting. Travelers will be increasingly seeking a state of “Splendid Isolation”.
- An avoidance of parts of the world that are “over-touristed” in favor of new, secondary destinations that have largely been undiscovered. “We were able to be by ourselves with no crowds” will be the expression travel consultants will most want to hear.
A growing number of potential travelers will stay at home and travel virtually as the technology and AI improve to the point that sight, sound, and smell are all part of a virtual walk practically anywhere Google can map. Virtual taste is a very long way off – but know that it is coming.
Hotels will need to dramatically increase the percentage of in-house bookings at the expense of OTA’s. They will do this by eliminating some services, such as the check-in desk or sit-down restaurants while making Frequent Guest amenities exclusive to those to book direct.
Airlines will not be able to maintain profitability while eliminating approximately one-third of their seats from inventory. New cleanliness guidelines and the hiring of additional staff to thoroughly clean each aircraft at the end of every segment will require significant price increases. Direct flights will begin to disappear with a growing percentage of travelers required to take connecting flights.
Industry Marketing professionals will be tasked with convincing the public that their brand is more dedicated to maintaining a germ-free environment than others. This is new territory and some critical mistakes will be made.
The World’s Top Ten cruise lines will begin to discuss on-board health standards, a once-taboo advertising topic, in creative ways to fight the “Petri Dish” stereotype. Newly constructed ships will be defined by the possibilities they present for private-time onboard luxury.
Escorted tour companies will face some of the most serious challenges going forward as a 45-Passenger tour bus provides less space per guest than virtually any other form of travel. Look for some tours to include several buses rather than one, service that will have to be reflected in the price.
We could go on and on but we hope the above is useful. Of course, the really worrisome thing about all of this is the unprecedented level of uncertainty and the fact that facts don’t seem to matter to a growing portion of our population. In the most recent study, a majority of Americans cited Facebook as their primary source of news. Given that, it is hard to predict future travel behavior.
Q – We do want to get away from our mask-wearing neighbors and the idiots who can’t afford them to see some part of the world this coming September or October. Wondering how you might rank the safest places to visit right now given the Coronavirus stats. We understand that there may be some cases but we are looking for possible destinations that are safer than staying here in the States.
A – The list is actually growing as we speak but it is wise to remember that the current outlook could change if there is a resurgence of the virus in the Fall with no vaccine yet available. These are some of the destinations we think you should consider:
- New Zealand
Q – We’re going slightly bonkers – a nice retirement had just begun, I was doing at least 18 holes a day, and then Covid and a college son and daughter are now back at the homestead here in North Carolina. That leads one to begin imagining travel next year, likely back to Italy, this time concentrating on the major cities, Rome, Florence, and Venice where we hope to spend four nights in each. We would likely plan the trip for May if things look good for the vaccine or, perhaps, early October, a time you seem to recommend to your clients for Italy. So while we research – one important question: “What is the current and likely future status of the restaurant scene in these cities? Assuming there is some good vaccine news just prior to the election, will Italy be back to “normale” by the time we travel?
A – This is actually a rather complex question as it is reflective of the uncertainty surrounding upcoming travel for tens of millions of home-bounds seeking to escape. There are signs that dining will return but in some different ways. Previously, Italians in major cities we dining out just about a third of the time. But now, about a third of those people are saying they do not feel safe enough to sit in a restaurant. Like the States, only those restaurants that have been able to design a successful take-out alternative will be able to survive. In Italy, the percentage of small, privately-owned restaurants is much greater than it is in our country. The loss of this summer season combined with a serious drop in local business support has placed numerous restaurants in a position where survival is unlikely. There are few government programs to save these small restaurants and even three-star Michelins are struggling. Our guess, and it is only that, is that the attrition rate when this is all over will hover somewhere between 30-40%. Most of those failing food enterprises will, however, likely be taken over by a new generation eager to take advantage of some good locations and available equipment. So, yes, you will see some closed doors but, hopefully, some exciting new ones will open. The great thing Italy has going for it is an economy with a centuries-old food chain and much of the product produced in-country. You will dine well – we promise.
Q – Wonder if you can help us with an apparent “disconnect”. As we ponder future travel, we see great optimism in the flyers and magazines that arrive in the mailbox every day. There are some great offers and everything seems to be headed in a positive direction. No mention is made of Coronavirus until you turn on the news. We want to plan something wonderful – we need it like everyone else. But there is this lingering suspicion that maybe everything is not so safe and we should forget about this year’s Christmas Market River Cruise or the trip to Africa we want to plan for next year. We appreciate the candor on your web sites and wonder if you are advising your clients to stay home for the foreseeable future?
A – We are advising those who ask to remain to delay travel abroad until about the first of November. The real “comfort date” for us, when we would send our own family abroad, is Thanksgiving. Allow us to give you a brief rather than a lengthy response to your question, one that we are asked almost daily:
There are two facts worth remembering:
01 – The United States ranks 84th on the latest ranking of the earth’s safest countries. That means that 83 countries in the world are safer to be in than our own. Now we fought that stat, wanting not to believe it, but it is true.
02 – We have the most deaths and the most Covid cases in the world. The most.
One may conclude from these facts that traveling within the United States is less safe and riskier than traveling to a great many countries overseas.
It is always a heart – head decision. We are not salesmen here. You have to do what you feel is best for you. But if it is a “head” decision, travel overseas to a “safe” place may actually be prudent rather than risky.
Q – We are, as are many of your clients we are sure, going off the deep end with our stay-at-home orders here in Connecticut. We have spent a good part of our time reading travel books and wondering when we should plan on being able to get away with everything, more or less, falling into place including cruise line schedules, hotels, and airlines. What are you currently, as of May 26th, advising your clients concerning travel overseas?
A – Our unofficial start-up date for the resumption of carefully planned travel is much later than the travel industry is proposing. The industry is seeing July 1st or, at the latest, August 1st as the date when international travel via ship, tour, or independently should resume. We’re not there. We think that will be too early and we are advising our guests to look at Thanksgiving as a more reasonable and safer date to use as a starting point for future travel. We foresee additional testing and vaccine delivery delays as well as confusion regarding air schedules and new entry requirements as reasons to put off travel for six more months. We understand that ours is a minority and a rather conservative view and that it runs counter to the general health of a travel industry that seeks to re-boot as quickly as possible. But think our advice is sound.
Q – We are booked on Scenic – that is to say we were booked on Scenic. They canceled our program in Portugal and we now have been offered a Future Credit. We were paid in full and they then canceled because of Covid. I assumed we could get a full refund and now am being told that we can first apply for a cash refund on June 30th, 2023. That is not a misprint. 2023. I think that is outrageous and am wondering what my alternatives might be?
A – It is an unfortunate policy but Scenic isn’t the only line with the “delayed refund” component. The idea is that they really want you to use the credit and they figure that by giving you more than two years you will eventually come around to their thinking. At this point, you should write a letter to Scenic’s Guest services department and offer specific reasons why you need the cash refund promptly. If you are comfortable doing so, you might want to mention financial needs. This is an obvious cash-flow ploy and for those who are not considering re-booking a really frustrating policy. Send a copy of the letter to your travel advisor so they can advocate and follow-up on your behalf. The fine print allows companies to adjust their refund procedures in extraordinary circumstances so there really is no legal option. Scenic’s policies have been noted on www.riverboatratings.com The line has been downgraded given concerns generated by policies of the kind you have pointed out.
Q - We are scheduled to fly to Germany next April to join a cruise on the Crystal Ravel along the Rhine. We keep hearing about airline changes and were wondering what we should do in terms of a timeframe to book our air.
A – We think that September 30 may be a critical date in modern travel industry history. That is the date that the major airline restrictions on trimming staff expire. Airlines had to agree to maintain staffing levels until then to get the government’s loan program.
On, or immediately after September 30th, we will likely see American and United cut staff including pilots and flight attendants by approximately one-third. Entire aircraft fleets will be retired. Delta will take three aircraft types completely out of service and will likely sell them. Overseas non-stop routes will be heavily affected.
The changes this kind of airline restructuring will produce are significant and will, going forward, change the travel landscape as some hassle-free routes and flight options quickly disappear.
In your specific case, we would book your flights sometime around October 15th with a plan to reconfirming all arrangements just after the first of February, Given some of the upheaval we are anticipating in terms of aircraft substitutions, canceled routes, and schedule changes, we highly recommend that you engage the services of a Flight Monitoring firm. In late 2020 and 2021, international air travelers will really need this service. The good news is that Germany and Europe in general should have fewer air-related schedule issues than some other regions of the world.
Q – We understand that insurance, specifically travel insurance, will not cover a pandemic of the type we are currently experiencing. We will, as you know, be going on an extended trip next winter that will include time in Bali, the Philippines, Hong Kong, and Japan. But what about a policy for medical evacuation of the type offered by Med-Jet, a company you have recommended in the past. If we get sick, due to the virus, in a remote part of the Philippines, would our Med-Jet policy allow for them to come to get us and medically evacuate us as they would for any other type of illness?
A – No. A Virus outbreak such as Covid-19 is not a covered inclusion in a Med-Jet policy. We are not aware of any of the top-tier insurers who cover this type of virus. Of course, if you were hospitalized with the virus, it is unlikely your local doctors would permit you to be flown home anyway and their authorization is always required for any medical evacuation.
Q - Fascinated by the coverage of NCL as we have an Oceania cruise in the med scheduled for next April, 2021. Is there any information you can share that might help me ease my wife's family's concerns about the financial safety of Oceania?
A - All future and potential 2020/2021 Oceania and Regent Seven Seas cruisers should watch the video linked below. It will give you an insider's look at the real picture of NCL's current financing:
Q Thanks for all this information that we haven't seen elsewhere. Wondering about the financial failure of a cruise line. We are booked on a Silverseas cruise, which I believe is now owned by Royal Caribbean, one of the cruise lines as being in financial difficulty. We took out the recommended insurance through Travelex, a company we have used before with very good results. Our cruise is several months away. If Royal Caribbean were to go under, would our insurance cover us under the "default" provisions? In other words, it seems that insurance companies are not covering pandemic-related cancellations. But what about if the pandemic causes the cruise line to go under?
A - Glad you like the site but we still need to point out that your question is less than fact-based. Royal Caribbean has secured additional funding including a sizeable investment from Sadi Arabia's Royal Family which now owns over 8% of the cruise line. Most analysts feel they are well-positioned to deal with this financial crisis well into next year. Given their many years of outstanding past returns, the acquisition of additional capital is not seen as a major problem going forward. The Travelex insurance you took out should offer the following financial coverage for supplier default. You will not that there are two primary timeframes within which coverage is offered. This is fairly standard among the leading trip insurance providers:
Trip Cancellation/Interruption due to Financial Default Coverage
- Financial Default of an airline, Cruise line, Common Carrier or tour
- The operator provided that:
- (1) The insurance was purchased within 21 days of Initial Trip
- Payment; and
- (2) Financial Default occurs more than 14 days following an
- Insured's effective date for the Trip Cancellation or Trip
Q - Call us crazy but we really need to get away and we will be wanting to do a cruise to the Med in the early fall. Is there a list you can provide that explains which cruise lines have canceled their sailings through September and October? We don't believe much of what we read in the media and we are not at all afraid to fly. It doesn't seem that any of these Corona cases started on ships or planes. May we book it with your firm if things work out? We've not been isolating at all and we're fine, in our sixties, and I work out on the beach every morning, here in Jacksonville surrounded by friends. No one has a right to take away our liberty to stay open for business or to congregate where we please. Sure you would agree with that.
A - Sorry, we'll take a pass on your business. We have an IQ minimum.
Q - We are scheduled to sail the Oceania Marina next March. We are worried about some of what we are reading in the "fake news" and are wondering if ya'all think cruise will actually come to pass. We've been looking forward to it. Thank you. Enjoying all the free information and advice.
A - We think you can look forward to your cruise with some degree of confidence. Norwegian, Oceania, and Regent Seven Seas now have enough liquidity to sustain operations for at least a year on the assumption, false, that they will have zero income.
Q - Wondering if you would step back and do a bit of "Big Picture" update instead of answering specific questions posed by visitors to your sites as well as Churchill & Turen clients. Where the hell are we at the moment? We are watching the news, in between episodes of "Tiger King" on Netflix, and the travel-related reporting is kind of depressing. Should anyone be planning a cruise at this time?
A - Interesting you reference "reporting". The media has, so far, failed to report that not a single cruise ship ranked in the "Top Ten" has had a Corona-related outbreak, although Silversea had some specific cases on two of its ships. We are always wondering how many of the, quite serious people writing and speaking about the cruise industry have actually experienced a top tier product?
To try to address your broad question:
- The airlines are always going to react to demand. Schedules are flight departure increases are, therefore, almost impossible to predict. We do know that the Europeans will begin traveling again this summer. No one we know thinks that will translate to a huge uptick here.
- The alternative to a cruise vacation on an upscale cruise ship is a pack and unpack vacation using hotels whose cleaning standards are likely going to be less stringent than any of the major lines. There are villas - yes, and private jet vacations which some of our guests prefer. But for most, the alternative to a cruise is a tour and that means bus transportation from place to place. The tour industry has, thus far, escaped industry scrutiny. But consumers are smart enough to give all of the available options a good look as we move forward in a travel age of new realities.
- We think that planning an overseas vacation should begin now but we would recommend putting off travel until after our National Election with the exception of destinations that are on a current downswing in new Covid cases like New Zealand.
- Given the huge profits generated by the three major cruise lines during the past seven-year period, we see the potential of new investment in this sector of the industry. We are more optimistic than most about the recovery of the cruise industry, an optimism based entirely on current 2021 booking trends being reported by travel firms throughout the United States. Our concern is not that the travel industry will not come back but is, instead, more about the desire on the part of some to rush the process. This is a great time for dreaming and for refining one's bucket list - it is not the right time to be traveling.
Q - We have a Covid question - we are booked on a Rhine cruise with Crystal in November. We think everything will be fine by then and that America will, hopefully, be back to work. But most of this cruise is in Holland and Germany and we're not sure how quickly Europe will be able to recover. We are thinking about canceling and just staying home where the health care is good and we can eliminate worries about traveling. We are in our early seventies and this would have been our first trip to Europe. We've paid a hefty deposit and we are wondering how we can get a full refund of our money since we are so far ahead. We went on the Crystal web site but it wasn't very clear.
A - We wish you could take this trip. It might be eye-opening. Actually, Holland and Germany have fairly good healthcare systems in place and their management of the Covid outbreak is being applauded in most quarters. The web site is a bit confusing because Crystal has different cancellation policies for cruise ships, Expedition and Yacht cruises, and riverboats. Your cancellation cost should be $500 Per Person if you cancel in the next two weeks.
Q - We have been on fourteen cruises, twelve of them on smaller ships such as Windstar, Lindblad Expeditions, and Sea Dream. We are not seeing much news about these companies. Wondering how well prepared they are, financially speaking, to weather this Covid thing. Our next scheduled cruise is on Lindblad next February.
A - There are so many variables floating past in your question that we will need to offer a more generalized response than you are probably wanting. Of the lines you mentioned, Lindblad seems to be the most proactive in describing its financial reserves and lines of credit. When the big money folks set up equity loans that offer future income potential, stock ownership, and, sometimes, a seat or two on the Board, they are thinking about taking advantage of low stock prices with the possibility of a real upside down the road. A smaller operation, with just a few ships and a few hundred total berths, may not have the kind of potential financial outcome they are seeking in a "bail-out". On the other hand, the smaller the line the less they need to survive on a one-year basis.
Personally, given depressed stock prices and huge potential upside in recovery, we think the big three will eventually be considered "attractive investments" by some of the major financial groups. But they are clearly not at this time. It will take several months until 2021 first-quarter estimates are available. We think they may be favorable if anti-Covid drug regimens are announced and available this fall. But this is a rather huge "If".
Q - The news about our upcoming Regent cruise in October is obviously not encouraging. Is there any late news as of May 6th? We have final payment due in July. Really concerned about the possibility of financial failure, the looming possibility that Covid-19 will still be with us in the fall, and the likelihood that our United flights will not actually operate. Not at all in the mood for this vacation. How do we get our money back? Truly appreciate this site and your willingness to share information we can't find elsewhere.
A - The news regarding the ability of Norwegian Cruise Line Holdings to weather the Covid-19 storm is encouraging. But several more positive things would have to come together for you to have a viable vacation option in October. We don't think you should wait.
At this point, you have the following options:
01 - Cancel your cruise and lose the insurance (if purchased through Regent). If you cancel soon, you will be in 25% penalty which is just about the value of your deposit. Assume that Regent will be enforcing its cancellation penalties. Cash flow is critical at this time.
02 - Gamble that Regent will end up canceling your sailing. They will have your money but you will likely be offered a full refund or a future credit of 125% of your cruise fare.
03 - Your final option is a bit of a long shot but you will get a same-day response. Choose the same or any 2021 or 2022 voyage you like and have your travel consultant try to get Regent to move the money over to your new booking.
The option you want - a full refund with no questions asked is not available. If you want to pursue the matter we suggest a well reasoned personal letter to the one department at most cruise lines able to skirt stated policy. Send your letter to Guestrelations@RSSC.com We suggest a calm request rather than a rant. Do try to point out why you might be considered an "influencer" who can bring Regent new business with the knowledge that they responded well. If they do get back to you with the refund you are seeking, in violation of company policy, we suggest that you sell the letter on Amazon. There will be heavy demand.
Here is why this sometimes works. Your consultant has clout representing hundreds of clients for the line. But if Regent makes an exception for one of the firm's clients, that sets a precedent for others and can create tension in the relationship. But if you communicate quietly with Guest services, you are an individual and you may get consideration because you are representing a single booking rather than hundreds. We hope this helps.
Q – It would be extremely helpful if you would share some opinions on those cruise lines or tour operators who seem to be having the most financial difficulty. I realize from a prior response that this is not something you are comfortable doing but there are a lot of us out here who really have no place else to turn. It’s not like we can call these cruise lines and get a straight answer regarding their financial status. Understand this is quite complex stuff, but a reading of the field would really be helpful to a great many of your readers. If this is an off-base request feel free to ignore.
A – If we felt we could give you a totally accurate answer we would. Here are a few observations we hope will be useful:
- We are less worried about the “Big Three” than most. The CEO of Norwegian Cruise Line (Owners of Oceania and Regent) received annual compensation last year, 2019, north of $18 Million. He earned that by turning in outstanding profits. So when a company like Norwegian goes looking for short-term debt forgiveness or secured loans, they are going to encounter any number of large financial entities that are interested. That can also be said of Carnival and Royal Caribbean.
- Our concerns are more centered on smaller or new-to-launch lines such as Sir Richard Branson’s Virgin Voyages. Branson is using his beloved private Neckar Island as collateral to secure a loan in the U.K. The new, Scarlett Lady is tied up and when she sails she will embark on some rather standard Caribbean itineraries with a bunch of untested concepts like an onboard tattoo parlor and evening entertainment and dancing hosted by resident drag queens.
- Sea Dream Yacht Club only has two older 100-Guest ships. We worry about them.
- The big hotel chains will likely survive but there are thousands of small, independent hotels around-the-world that face economic uncertainty.
- We think the Airbnb concept is going to have to overcome some deep-seated uncertainties regarding vacations based in the homes of strangers.
Q – We are going on a seven-night cruise to the Eastern Caribbean over the July 4th Holiday. Will MSC require that we wear facemasks aboard the ship?
A – You should certainly bring masks but don’t plan on actually sailing in early July. You can wear the masks in the terminal building.
Q – We are scheduled for a trip to Lima and then Santiago in late October. Is it likely the airlines will be flying at that time and how do we protect ourselves with alternative flights should we run into issues?
A – It is impossible to tell you, as of today – April 28th, who will and won’t be flying during the last week in October. Our guess is that you will be fine but understand that, at this moment, 15,500 aircraft are parked in remote locations around the world. This represents about 60% of the worldwide fleet that is no longer flying. So it could take several months for crews, schedules, and local officials to reinstate commercial aviation in many countries. For this trip, you need to be working with a flight Concierge service that is monitoring your flights.
Q – We are scheduled to sail in August on Regent Seven Seas. It would appear that Norwegian, the company that owns them, has closed down many sailings and is in some level of financial trouble. For passengers, how much of a concern should this be?
A – There will be small, many small, and some large travel-related entities that will not survive the current and coming economic crisis. In may cases, these will be marginal companies and those firms with huge capital outlays and debt not accompanied by a consistent record of solid stock prices and admirable annual profits (The three largest cruise lines have that kind of record).
Q – Are cruises going to be operating normally in the near future?
A – No. Ships are, at this moment, being tied up for a sustained drydock period. There are currently eight ships en route to Asia carrying crewmembers home to Jakarta, Manilla, Bali, and Hong Kong. This is indicative of prolonged disruption in normal cruise operations. We think that having crew return to their ships while having vessels ready to resume normal schedules is a matter of months – not weeks.
Q – What about the airlines. Will they be back in service for trips later this summer and the fall?
A – That is an open question although parked aircraft can be made flight-ready in a matter of days. But look at the month of March at the New York area’s three major airports – take-offs and landings are down 85%. International flights are down significantly.
Q – Are there parts of the world that are still really safe to visit?
A – There are no reported cases in Antarctica. But there are also no hospitals or drive-up clinics. African safaris are operating normally and there is positive news about the manner in which Kenya and South Africa particularly, have responded to the virus. There are areas of South America that are relatively untouched. Some of our clients are renting Villas or yachts for self-isolation in the most comfortable situations. Bookings for Christmas Market river cruises are strong. Currently, Turkey, Barbados, Jamaica, Mexico are enjoying a fair number of foreign visitors given relatively low numbers of Covid-19 cases. Iceland has been named as a country that has handled the challenge extremely well. The way they have done this is to assign entire teams of their best police detectives to identify and bring in suspected carriers for testing.
Q – Which cruise lines are in the most serious financial situation?
A – Analysts are not united in their opinion but the ones we listen to seem to feel that Norwegian Cruise Line has the least cash on hand with Royal Caribbean second, and Carnival in the stronger cash-flow position. These three companies control 81% of the market. Carnival is owned by the Arison family and its founder is based in Israel. They have just announced an infusion of capital from the investment arm of the Saudi Royal Family which, as of this moment, owns 8 ½% of Royal Caribbean. Cash flow is really the issue for these lines and, given the massive profits and stock price growth over the past decade, we think that loans and cash infusions are going to be available. The staying power of these three lines without any cash infusion is currently estimated at nine to fourteen months.
Q – What about Crystal Cruises? Are they in better shape than the largest three brands?
A – You could make that case. Genting, the Malaysia-based shipping corp. that owns them has deep pockets. But last Friday, Crystal aid off approximately one-third of its US-based office personnel.
Q – We do not cruise but we take top-ranked escorted tours with Lindblad, Tauck, and Abercrombie & Kent. Will they make it?
A – We think so. Lindblad just received a major cash loan. A&K and Tauck are widely diversified and are privately-held so accurate numbers are not available. But we think a tour operator is different than a cruise line because they have far less capital investment in the products they sell. A&K does not own the hotels or the tour buses it uses. It does not own the boats or the small ships it uses for its programs. These are really companies that package and market other people’s products so exposure and risk are reduced.
Q – How will we know if a program you have us booked on is canceled and what our options are?
A – We have a well-designed process in place that will allow us to receive the information on a priority basis and notify you within a three-hour timeframe. This includes weekend notifications. We will then follow up to make certain you have received the information. We have asked that each of the members of our Elite Traveler Concierge Club is included for direct notification by all of the major cruise lines and tour operators.
Q – Will your advice be to wait until the supplier announces cancellation in all cases?
A – No. Each of our clients is entitled to receive our best advice regarding the most prudent strategy to follow. There could be a scenario where that would not be to wait patiently – but in the vast majority of cases that is exactly what you should do.
Q – As I understand it, these FCC’s allow the cruise line to hold on to our money and they will give it all back to us plus another, say, 15% for re-booking the same trip next year. Do I have that right?
A – Yes. They are helping solve their close-in cash flow issues while paying you far more than you earn in a savings account for your support. It really is a win-win.
Q - We are going to be sailing, hopefully, I might add, aboard the Crystal Symphony in November sailing from Mumbai to Singapore on the 16th. We are wondering if there is any doubt that this cruise would operate and whether you might identify any irregularities we might notice aboard the ship in terms of normal Crystal procedures? I did not know about you before discovering this site and we did not book with your firm - a mistake we intend to correct when next we travel. Thanking you in advance.
A - You've selected a wonderful itinerary so perhaps your current agent is better than you are imagining. We think this cruise is " Likely" to operate and it remains heavily booked. In fact, Singapore, and Thailand to a lesser degree, have been praised for handling Covid-19 rather quickly and rather well. Singapore will be used as a case study of what "to do" in future situations that are similar. We can now identify certain procedural changes you are likely to notice soon after boarding. To begin with, if you are age 70 or above, you will need a "Doctor's Certificate" to be permitted to travel aboard Crystal ships. Capacity on Crystal's tour motorcoaches will be limited to "half capacity", something we think all cruise lines should implement. Expect that all "self-service" buffets, including the often "incredible" upper deck evening buffets to be completely eliminated. One of the ways that guests will be able to identify those cruise lines most concerned with guest health is how quickly buffet dining is eliminated as an option.
Q - Our cruise on Holland America was just canceled and we are now thinking about sailing on a smaller ship with fewer than 1,000 guests. We wonder if they are really better able to avoid virus outbreaks? They cost more so we wonder if anyone can certify that they have better cleaning procedures in place? We work with an agent here in Brookline but are wondering what you are advising your clients booked on Princess and Holland America. They seem to have most of the problems and they are owned by Carnival so we wonder if this is a company to avoid since they may be headed for financial trouble based on some of the cruise boards we've been reading. Appreciate the straight talk on this site. It is extremely helpful.
A - In the interest of time, allow us to respond using bullet points as you have posed several good questions:
- The statistical evidence that smaller, more upscale (keyword) ships are safer from this type of virus is found in the fact that not a single one of the www.cruisetruth.com Top Ten-Rated cruise lines have had any major issues with Covid-19. All of the ships where the virus spread were larger, multi-thousand passenger ships. These top-rated ships carry far fewer guests, a more upscale demographic, provide much more on-board space per guest, and a significantly higher crew to passenger ratio which makes for better cleaning procedures. That said, the virus can strike anywhere because it is not being produced on cruise ships - it is being brought aboard by infected passengers. So screening procedures are critical.
- We are not advising our clients booked on Holland America or Princess because we limit our services to the world's top ten lines. When you say "they have most of the problems" be careful about accuracy. They certainly have the most negative "impressions" from the media. But in virtually all cases, Covid-19 was brought aboard the ships unknowingly by visitors who picked it up in China or Europe. Don't think that the virus was produced or "manufactured" on-board.
- Carnival is, so far, keeping most of its ships in what is called "Hot Lay-Up." This means that ships are operating, while tied up, with a complete deck and engine crew on standby and a fairly large hotel crew largely doing maintenance, deep-drill cleaning, and some serious renovation along with cosmetic touches. It has been estimated that Hot Lay-Up could cost Carnival somewhere around $2.5 Million per month per ship. They have nine brands worldwide and just over 100 ships. We are less worried about Carnival than some other, smaller brands in the industry. They have secured the short-term cash infusion they need and they have said publicly that they do not feel that they need government subsidies.
- "Based on some of the cruise boards we've been reading" - Be careful here as the majority of what you are reading is written by people who have no connection to the industry and are not in a position to speak personally to top-level executives about issues related to future planning, itinerary changes, and crew and air deployment matters. Usually, professionals in the industry laugh a good deal at what appears online as "cruise critiques". But in this situation, where we are experiencing a true pandemic, amateur commentary and misguided opinions can be harmful in the extreme.
Q - We have a river cruise on Viking along the Danube booked for the last week in June. Is there any indication, at this stage, as to when the cruise will operate? Any odds so we have an idea of what to do?
A - Riverboats, as a rule, lose money if they are under 70% occupancy. This is particularly true of Viking which depends for much of its income on on-board spend generated by full ships. Our current estimate is that any sailing during the last month in June has about a 40% chance of operating. But that is really an estimate as so much depends on the lines gaining authorization from the small ports along the way to, once again, disgorge passengers ashore while the line operates a full schedule of shore excursions. This is still iffy and we believe that there will be major disruptions and cancellations to cruising schedules in Europe lasting through much of the summer. Keep in close contact with your travel consultant for updates.
Q – It is now late March and we have a tour scheduled to Italy the third week in June. That is less than 90 days away. Shouldn’t we know by now if Tauck is going to operate this tour or cancel? We can’t see how it can possibly operate given the lockdowns in large cities in Italy. Friends are in the same situation with their early June Silversea cruise to Russia and Scandinavia. What is going on here? Why won’t our consultants or these companies tell us if we can travel or not? It seems as though the travel industry is in a state of confusion with no one able to make a decision about anything.
A – We fully understand how you would feel that way. And you’re not alone. The key here is understanding the logistics of managing the movement of a tour group or a ship, staffing, guarantees from ports and hotels as well as airport officials that entry will not be hampered. This is the most challenging human chess game ever played and there is no precedent for most of what is now taking place. Every executive of every cruise line, hotel chain, and tour operator is in constant meetings trying to get specifics, commitments, and alternative plans from overseas offices and contacts.
Stock prices have tanked, as you know, and a few of these companies are planning for their guests while also trying to figure out how to assure their own survival.
No one in the industry knows when Covid-19 will be under control. Dr. Fauci does not know and our political leaders certainly don’t know. The planning in the tourism sector seems to be based on good news and improvement, with medical applications, being introduced this summer or early fall. Most don’t think the crisis will run into 2021 – but some do.
For now, it is important for all guests to understand that logistically it is important for all of these travel companies to work on imminent programs first and then work backwards in terms of planning, operations, and guest policies. Almost no company we know is making decisions much beyond April or early May given the several scenarios that can occur. For that reason, tough as it may seem, patience is going to be necessary for a little while longer.
Q – We are booked on a cruise to the Greek Island in September on Seabourn. We are taking your advice to wait until Seabourn announces the cruise will proceed or that they are cancelling, in which case we would expect a more generous offer than if we cancel now. But if that happens, what about the air we did on our own and the insurance we did through Travelex?
A – The air cancellation penalties would be up to the airline and you would need to contact them directly. Most are allowing cancellation but a lot depends on whether or not you booked a refundable or non-refundable fare The airline’s “Contract of Carriage”, the fine print you agreed to when you purchased your ticket, gives them great leeway to handle cancellation as they see fit in this kind of emergency.
Travelex is excellent insurance and you may be eligible for a clause that allows you to move your policy over to a re-booking next year or later this year.
You are doing the right thing by waiting. It is always best to have the cruise line cancel a sailing instead of jumping the gun and exposing yourself to stated cancellation policies.
Q – Why doesn’t Princess Cruises, along with some of the other large cruise lines, defend itself against all of the anti-cruise stuff we’re reading? We couldn’t believe the Bill Maher rant on his HBO show last week calling for the end of the cruise industry an d saying that cruise ships are “floating petri dishes”. Why doesn’t the industry fight back and, with your online voice, why aren’t you all more aggressive in fighting he anti-cruising stereotypes. We’ve been on 27 cruises and we’ll keep going as long as they let us. The people who got infected can be traced to passengers who had originally spent time in Wuhan, China. What are you telling people about cruising at this moment – are you telling people they should not be cruising? Is a hotel room any cleaner or safer? Is a bus filled with tourists any better? Is a church filled with parishioners and/or tourists any better for your health prospects?
A – There are about seventeen good questions in there – although some of those require medical expertise that we don’t have. So, let us respond to you with just a few observations:
- The challenges of keeping a cruise ship illness-free are more difficult when you are caring for 3,00 guests that when you have fewer than 700 guests. Not one of the world’s top-ten rated cruise lines has had any reports of a Covid-19 Outbreak. That is the story that is underreported.
- The Diamond Princess was on the wrong itinerary at the wrong time. The ship was in Asia with a heavier-than-usual contingent of guests who live in China or who were traveling in China and/or Japan.
- The ratio of medical staff to guests is significantly better on a smaller, upscale cruise line. The medical services are more personalized.
- Your analogy of a hotel room to a cabin aboard a hotel that manager to float from place to place is a good one. Mass market cruise lines have a proportion of inside, windowless accommodations. On the top-tier lines, the vast majority of staterooms have balconies with doors that open allowing fresh air into the cabin. We think this is important in terms of good cruise health.
- The “petri dish” comments we are hearing are generally stated in anger and unfair. Is a movie theater, a mega-church, a grocery store, or a school a “petri dish”?
- The crew to guest ratios on cruise ships are significantly higher than they are in hotels. Cleaning of public areas on the top tier lines is constant and generally exceeds CDC guidelines. It really all boils down to the boarding process and the level of testing for the virus passengers must experience. All of the lines have learned valuable lessons in this regard.
- Tours, like cruise ships, serve a variety of demographics. Now, more than ever, we think that choosing tour “brands” is important to maximize the chances that proper precautions are being taken during touring and in accommodations used throughout the route. Some would argue that keeping your cruise stateroom clean is an easier task than micro-managing the cleaning of six or seven hotel rooms and a dozen or more restaurant settings along your tour route.
- Princess Cruises has taken one of the hardest PR hits of our time. The Diamond Princess story will be repeated in Graduate School Marketing classes for the rest of our lives. At this point, Princess needs to avoid the urge to “fight back”. Much of their financial story will rest on the outcome of this summer’s Alaska and Europe Season. And those are, at present, unknown.
Q - We have a cruise planned to Iceland later this coming summer. The sailing will be aboard the Ponant line. We know they have canceled several of their itineraries including sailings in and out of Japan. Is it likely this August trip will operate? We are traveling with another couple and they are depending on us for information and we are not getting any specifics back from the line. We have no agent – is there someone else we should be speaking to? And is it true that there is no Coronavirus in Iceland?
A – Your situation is one of self-imposed ignorance. You are telling us that you made a conscious decision to pay the travel agent commission to Ponant without receiving the kind of knowledgeable advice that payment should represent. But that’s OK – let us try to help you.
Coronavirus has come to Iceland but there are no serious cases thus far and the country has had time to make medical preparations should the situation worsen. A woman in her forties was diagnosed this week with the COVID-19 virus in Reykjavik, Iceland. Currently quarantined in her own home, she arrived in the country on an Icelandair flight from Munich, but had been skiing in northern Italy. This is the third Icelander, as this is written, to be diagnosed with the virus.
According to the health coordination center, a man in his fifties was the second who was reported to have the virus. The prognosis for both people looks fine, but they show typical symptoms for the disease. Everyone who has been diagnosed with the virus resides in the capital area, but about 300 people are now quarantined in their homes in the capital. Most of Iceland is remote so it would be difficult to the disease to spread as it has in urban centers around the world.
It is very hard to know if your trip will operate as some medical experts seem to feel that we will have a good handle on testing and treatment within the next three to four months. (This is written on March 23, 2020) Speaking to commission-based sales people in a cruise line res center is not going to get you the best information. Ponant is a particularly difficult company to finesse because decisions about ships deployments are currently being made by an executive board based at the company headquarters in Marseilles, France.
Q – Currently booked to Antarctica in December of this year. Do you see any reason why we might consider cancelling at this time? We are in our mid-sixties and I am a hiker. My wife has had lung cancer but is a survivor. Doc seems to feel trip is OK – going with National Geographic. They keep telling us that the trip will operate. We do have cancellation insurance. Most interested in your opinion regarding the likelihood that this trip will be operating.
A – Everyone who is currently living in Antarctica is enjoying a form of “No Choice Isolation” within small groups. Before boarding your ship, we expect you will be fully screened for the virus. But December is a long way off and no one can give you definitive information. We think you were wise to consult with your doctor before this trip. Antarctica is one of several places that have not had any Covid-19 reports. We would go and we would bring our children with one important caveat: We would want to know precisely what our air arrangements were going to be and we would want a sense that flights would still be operating. Given the likely routing, that is not at all certain. Have your travel consultant provide periodic updates on the air situation beginning three months prior to your scheduled departure.
Q - We are booked with Viking River on an August river and land program that is supposed to include the Oberammergau Passion Play. Will it be operating? We’ve heard nothing.
A – It will not be operating. The Passion Play is being re-scheduled for the summer of 2022. Viking is currently working on adjusting all of their Passion Play inclusive itineraries on both land and in conjunction with their river boat departures. This can be a lengthy process. You need to discuss your situation with your travel agency to make a determine if canceling now or waiting is your best option. What you do will also depend on who arranged the air and what cancellation penalties might be associated with your booking.
If you made your booking with directly with Viking and paid the travel agency commission anyway, we can only wish you good luck. Our suggestion is to communicate with the Customer Service Desk in writing. You should have it all straightened out by the time the Play actually is staged.
Q - If we had planned on going on an escorted tour operating in April and it was cancelled because of the Coronavirus, would the tour operator we were going with be responsible for reimbursing us for our air costs? We’re flying Delta in Business so the costs are close to $9,000.
A – Unless your air is part of the canceled tour operator package, it is highly likely that you will be responsible for all cancelation fees.
Q – We notice in answering these questions that there seems to be a fair amount of equivocation. I feel like I want specifics. Our situation is that we are about to cancel a September cruise round-trip from Barcelona. We have no interest in visiting Spain now that the Virus has hit them hard. But our travel agent says they have not yet canceled the sailing. So how do we get information? They wouldn’t talk to us when we called Oceania.
A – We are getting many questions related to the lack of available information. This is, of course, an unprecedented event for which no airline, hotel, cruise line or tour operator could be fully prepared. The most important thing for you to understand about the process is that the cruise lines are working each sailing in order. Right now in Europe, for example, policies have been formulated for most sailing in the next 60 days. Beyond that, lots of decision-making and discussion will be based on the most up-to-date information. The truth is that most cruise lines in March or April will not know what they will be doing this summer. A number of ships will likely just be drydocked.
Strategize with your travel consultant to see whether or not it would be wise to wait for Oceania to cancel your sailing or if you should just pull the plug now. We do not see summer European schedules operating normally. Nothing impactful on the spread of the virus will happen that quickly. As to why they won’t speak to you – it is protocol in the industry for suppliers not to talk directly to guests who are being counseled by an approved travel professional.
Q – We just exercised an option to cancel a Crystal cruise. We have been given a full credit and we are re-booked on the same itinerary next year. But we can’t seem to get any paperwork from anyone, Crystal or our TA, showing that the original payment has been moved over. As a CPA, I kind of like to have a paper trial about large expenditures. I lover in Manhattan, am I being too aggressive?
A - In this case - perhaps yes. The travel suppliers have not programmed their software to handle the level of changes the company is handling. Accounting is likely overworked and short-staffed given the current needs to re-book large portions of the exisiting bookings on record. Pricing and credits, along with air and pre/post-cruise arrangements have to be factored in. This is, to put it mildly a CPA's worst accounting nightmare. Refunds and adjustments will take two to three weeks longer than usual. We're sure you can understand this.
Q – Let’s suppose I am booked on a cruise or tour to Italy this fall and the Center for Disease Control advises that Americans not travel there, am I automatically entitled to my money back from the tour operator or cruise line? I am actually booked on a cruise and am curious as to how the rules on this work.
A – There is no law that requires a cruise line or a tour operator to give you either a full refund or a future travel credit. This is covered in the supplier’s “fine print” and is usually known as the cruise line “Agreement”. Anything offered to guests is legally considered an “Act of Goodwill”.
Q – I have been on a total of 29 cruises and I am planning on going on many more. So you can imagine how I felt when the government of the United States started advising citizens to “avoid cruises”. What is the real reason they are doing this? I can’t figure it out. Can’t they just avoid the riskier ports?
A – It will be interesting to see how the ad agencies for the major cruise lines deal with the ultimate public relations nightmare. This will be studied in Marketing classes at universities for many years to come. The issue on the ships is less about the departure ports than it is the idea that large numbers of passengers and crew are gathered under the roof of one hotel that has the unusual ability to float. This virus loves gatherings of people. The ships in the news are all “High Density” vessels. There are mathematical formulations for every ship measuring the amount of public space per guest. Just imagine, you are walking around a typical Carnival cruise ship. And everywhere you walk there is an imaginary box of space that belongs to you. On a mega-liner, that box might have about 20 square feet in it. If, on the other hand, you are on a low-density five-star line, that box could have up to 50 sq. ft. in it. So the amount of close contact varies widely and the consumer press doesn’t really understand this.
Q - The safest plan for our “paid in Full” visit to Scotland in October is to take out some cancel for any reason policy. Which is the policy you most highly recommend?
A – It doesn’t exist. You are far too late to attempt to take out a Cancel for Any Reason policy. And if you still could, you would undoubtedly go through a period of “buyer’s regret” when you realized that it was not going to cover the entirety of your visit. Most of these policies only return 50-75% of your total cost at a premium designed for the foolhardy.
Q - We booked an Azamara Cruise directly through the cruise line and our friends booked through a local travel agent. I noticed they got the same offer we did so what was the point of their paying for the agent?
A – Good logic – until it isn’t. Yes, the buy-off, cancel offers would likely be the same in keeping with stated policy. But your friends should not have been charged a penny to use a professional agent and they now have an advocate for issues related to your new booking as well as the possibility of consortium group amenities. But if you enjoy being charged for services you are not receiving, such as the agent commission built into the price of every cruise, have at it. But these are extraordinary times in the travel industry and it might be wise to have someone who can contact executives at the line on your behalf in your corner.
Q – Would you advise us to continue on a trip we have planned for Spain in two months? We will be visiting Barcelona and areas along the Spanish coast including the island of Ibiza? We are in our early forties, in good health, and we love clubbing and dancing.
A – Well Spain is, as of this writing, in health lockdown mode. They are emulating the Italian model only more quickly. You might want to ask your physician if this trip is a good idea. Whether or not we would recommend it would have a great deal to do with your health profile, how you are flying, where you will be staying, and the types of activities you will be planning. If you are looking for a city that is packed in season and is a prime example of tourism overload, you could not find a better destination than Barcelona. If you are going to Ibiza for its nightlife, and we are guessing that you are, we would want to ask why you seem so anxious to be surrounded by international travelers in close proximity, who may be carrying more than a social disease.
Q - We are headed to Cape Town in the next two months for a long-awaited safari. We are going to both South Africa and Botswana. No one will convince us not to go – but you can have at it if you want. Our one question is wearing masks on the flight. We are having trouble finding them. Is this a necessity?
A – If you are in good health and your doctor approves, we think that, currently, southern Africa makes sense as a destination. But watch this carefully. We trust you are flying in Business or First on that long route. If you’re not, change your seating to the front of the plane. Masks are not necessary unless you are a health care worker. In certain societies, such as Japan, wearing a mask is a kind of awareness fashion statement. But excessive hand-washing is still the way to go. Be safe and please make certain your physician has signed off on this trip.
Q – We are watching the news, seeing these cruise ships described as “petri dishes” and wondering how any of the passengers can put up with prison-like conditions as they are locked inside their staterooms. We have a cruise booked on a Holland America cruise ship called the Koningdam. They are a more upscale line than Princess but as this will be our first cruise we are hesitant. The cruise goes to Mexico on October 3rd. We are less worried about the ports than the passengers. Any advice would be appreciated. I think we may be overthinking this one. Our travel agent keeps telling my wife not to worry.
A – Holland America Line and Princess are both cruise lines owned by the Carnival Corporation. Holland America’s ships, on average, carry fewer guests than a Princess ship. Your ship is the largest in the Holland America fleet at 2,605 Guests. Add to that, another 1,000 or so crew members, and you have a floating city of about 3600 folks. Many things will change between now and your departure date so it is hard to give you specific advice. But we are concerned about the size of the crowd. For now, we think consumers ought to limit their cruise options to any ship with fewer than 1000 guests. This will generally place you in a higher category of ship but we think that is exactly what you want to do. You want to be surrounded by fewer folks and a group with higher-than-average medical care, the kind of fellow-travelers who would be more likely to seek out competent medical attention if they had any symptoms of the virus. Sounds snobby but in this kind of crisis, we’ll risk it.
Q – We have a nice trip planned this September to Costa Rica. If the tour operator we have booked decides to cancel the departure are we automatically entitled to a full cash refund?
A – That is a bit more complicated question than it might seem. The air part of your trip would have to be refunded in cash as part of the airline’s “Contract of Carriage”. But that is the airlines. In fact, tour companies, resorts, and cruise lines are bound by their “Terms & Conditions”. Those Terms usually allow Future Credits to be offered instead of actual cash refunds. It is perfectly legal.
Q – We are booked on the Regent Seven Seas Voyager to Europe in September. I have been told that if I cancel within 30 days of my departure date, Regent will give me back a full refund in the form of a future credit that I can use in either 2021 or even 2022. This is part of something called the Regent Reassurance Program. Two questions: Will the refund/credit include the air I booked and what will happen to my insurance premium if I cancel?
A – Understand that any policy you or we reference may have changed, expired, or simply been thrown out if the implementation is proving impractical. Cruise line executives are in constant meetings, computer systems have not been programmed to handle the changes, and reservations staff internally as well as cruise sellers can barely keep up with the changes. So – that having been said, you must be paid in full to take advantage of this offer and you will automatically be placed in 100% Cancellation mode. So no cash refund of any kind. But you will get the 100% future credit and it will apply to both Regent’s air and insurance programs. If you booked your own air and purchased your insurance elsewhere, those costs will not be covered by the Reassurance Program.
Q – From a travel industry standpoint, which destinations in the world seem strong right now compared to the complete slowdown of travel to Asia? Where are our neighbors headed on vacation? Any trends?
A – Well you’ll find some of your neighbors waiting in lines at Wal-Mart for toilet paper, any kind of anything that says “Anti-bacterial” on the packaging, and cushions designed to help you slide under your bed in fetal hiding position. But most of your neighbors are still traveling. Travel agents are reporting upticks in travel closer to home such as Canada, the Caribbean, and Mexico. Spain and Portugal are seeing growth and travel to Africa remains strong. Cruises on American Rivers are selling out as are smaller, French barges and riverboats in Europe.
Q – Is there anything that we are not being told in terms of what we should be taking with us during our travels abroad or even in the US?
A – We don’t know what you don’t know. But we’ll mention a pocket pen. Us it to press elevator buttons and to press keys on a banking screen. Avoid signing with your finger at supermarket check-out. Carry a thick handkerchief and use it to grip stairs or door handles. Use a clean one each day. Carry a supply of bacterial wipes in a plastic baggie in the car. Do not go to China to play ping-pong this month.
Q – We are scheduled to go on a Regent Seven Seas cruise to Scandinavia and Russia in August. As a former hospital administrator, I have confidence that the Scandinavian countries will handle this outbreak considerably better than we will, sadly, in our own country. So my wife and I have no fear of going and we are really looking forward to the journey. I do wonder, however, if Chinese passport holders seeking to get away will be allowed to book and travel on our cruise. That could be a bit of a concern.
Q – Effective on February 20, 2020 Regent has relaxed its previous policy prohibiting guests holding a Chinese Passport from boarding its ships. This is in reaction to new, stringent immigration, customs, and health screening protocols and regulations in place around the world. This also applies to holders of Hong Kong and Macau Passports.
Q – This Corona virus is coming at a really bad time for our family. My sister is marrying a lovely gentleman from Buenos Aires in two months. We are all flying down for several days to attend. The immediate question involves our air arrangements which we must finalize this weekend. It looks like we can fly First Class for an additional $1900 per person. We’re all in pretty good shape, including both my parents who will be joining us. Any advice?
A – Definitely for your folks. We are recommending the front of the plane for anyone over sixty on international flights. You can decide, after speaking with your physician, if you want to spend the money for the rest of the family. If you bought Apple stock five years ago, fly upfront. And do investigate what private jet might cost if there are more than five of you traveling. You might be surprised.
Q – We are booked on a Tauck Escorted Tour to the Canadian Rockies in mid -June. This Corona thing is making us nervous and we are thinking about canceling. We did pay Tauck a deposit and we have their insurance. How will a cancellation work and will we get all of our money back?
A - Final payment for your tour has been pushed back to 30 days prior to departure. Any guest who cancels after making final payment will have ALL cancel fees (including GPP/CPP premium) issued back to them in the form of a travel credit to be used on any 2020-2021 Tauck journey. Airline change fees will not be covered for guests who voluntarily cancel.
Q – Are there really differences between the cruise lines in terms of this virus epidemic or are they all pretty much the same? So far, all I am hearing about is Princess. Do they all share the same cleaning and sanitary guidelines?
A – Actually no. While all manner of media attention has been focused on the Diamond and the Grand Princess, the fact is that, as of this date, we have seen no reported instances of any virus-related emergency on any of the world’s top ten ranked cruise lines. The mass-market lines, of which Princess is one, can provide a lovely non-inclusive cruise experience. Nothing wrong with pay as you go. The difference is not so much where the ship is headed but how crowded she is as she sails. Thousands of people on a giant liner are more susceptible to picking up a transmittable virus than those same people would be on something smaller, more intimate, with a significantly higher crew-passenger ratio. Of course, the issue with the headline garnering Princess ships has a lot to do with the timing and the fact that there were guests aboard who were connected to the virus during travels in China. That situation is now being addressed carefully on all ships.
Q - I am scheduled to depart Denver in September and will be flying, through Frankfurt, on to Munich and Zurich for an extended vacation. How do I know if my flights are canceled and what my alternatives are? I am flying Lufthansa but I don’t know if the flights will operate. I booked the air directly with Lufthansa and they say the flights have not been canceled. Can I believe them? Will they protect me on other flights if they cancel?
A – You should go to the Lufthansa web site and make certain that your e-mail and cell numbers are listed in the appropriate profile boxes. Currently, and for the next month, Lufthansa is planning on canceling up to 50% of its scheduled flights, mostly within Europe. It is, quite frankly too early to work on this. Reconfirm your flights two weeks prior to departure. You can believe what they are telling you but do not assume that an LU reservation staff member knows what top-level operations execs are planning. Research your flight options and make sure that you have a second and third back-up itinerary ready to utilize.