The Cruise Industry and Covid

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Bruising for the Cruise Industry: How the Cruise Industry is Affected By Covid-19, Part IV

Cruise ships have a massive effect on the global economy with hundreds of workers, billions of dollars in supplies and massive tax payments each time they come into port. Many forget the effect cruises have on the economy in areas where they make port. While the cruise ship itself is an economy of scale for tourism, there are many ancillary businesses in the communities surrounding the cruise ports that survive because of the ships coming into the harbor. These industries have also been hit hard during the COVID crisis. Let’s take a look!

Airlines

Flying to your destination is the modern mode of travel. Vacationers are not driving to their destination as often as they did in the past because it costs them a full day of their time off. Likewise, the rail system has become more of a novelty for long-distance travel than an actual option. Airlines are an important part of the national transportation network and they are feeling the crunch under the COVID crisis.

When the cruise industry is functioning normally, it is a major indicator of the number of flights coming into a given airport on a given day. Some cruise ships hold well over 2,000 people and there is a need to get those people to the port. This means that an aggregate total of 4-6 flights come into a city for any given cruise. While this is an estimate, those flying in may choose from dozens of different flights from many different locations. As a result, this creates a major influx for the airline industry.

Currently, the cruise industry is down and thousands of people are not flying to their destinations. This has had a tremendous ripple effect. Not only are the flights not arriving in affected port cities, but there is also a major effect on connecting flights. Not all flights are direct, which means that other airports outside of the cruise port are feeling the crunch of the industry shut-down.

Hotels

Travelers frequently do not arrive at their port of departure on the day of the cruise. If your cruise leaves on a Sunday or a Monday, then you may decide to fly in a day or two before to have some time to explore the port city. Cruise lines know this. Many cruises seem to leave on inconvenient days because they know that you will stay and help the towns in which the ports are located. This means that, as the cruise industry is suffering, many hotels are, too.

Once again, we see a numbers game. Cruises bring in thousands of people. Most cruise ports house multiple lines, which means that up to 25,000 people per week may move through a major port. Those are a lot of hotel rooms! Now those hotel rooms are vacant because of the crisis and also because the cruise ships are empty.

What else does this effect? Hotels employ thousands of people in port cities. Managers, clerks, housekeeping, food services, janitors, drivers, marketing staff- they all rely on a certain number of rooms being sold each day. When there is a massive decrease in rooms sold because of an ancillary industry being shut down, there are a lot of layoffs for thousands of people.

Restaurants and Events

Most vacationers do not want to cook for themselves when docked in port. They do not want to be sitting in a hotel room either if they’re not on the boat. This means that people are exploring the cities for all the cities have to offer. Restaurants and events in the city make a lot of money from tourists who are in town to catch a boat; when the boats are not sailing, those places are not selling.

Restaurants are important because they employ both skilled and unskilled workers. While an individual restaurant does not employ many people, the revenue gets spread around the port city to multitudes of workers. With 10,000 people (a slow week for some cruise ports), there are a lot of people who need 3-5 meals a day. That’s about 40,000 meals. This means that dozens of restaurants, from McDonald’s to fine dining establishments, rely on tourism to sell their meals.

Likewise, events in the port cities rely on the cruise business, too. While dozens of events are set up through the cruise lines, hundreds of events are individually booked by travel agents for people who are spending the night. Theater, adventure activities, romantic events: all of these see a boom the night before and the night after a cruise. The fact that ships are not sailing can be devastating to those supporting businesses.

Cities

Tourists are cash cows. They spend money and build up the local economy. Additionally, they pay taxes. Many people do not think about this, but every room you rent, every meal you buy, every novelty T-shirt you get suckered into buying has a tax on it (whether direct or secondary). This means that cities make a lot of money off people coming for a cruise.

When the cruise lines are not running, the 10,000 to 25,000 people that were spending money are no longer spending. This means that the cities’ coffers go empty as they are paying city employees who were planned under a “with cruising” budget but laid off because the cruise lines are no longer bringing the people in. This is devastating to local communities and can break the back of small towns near to the cruise ports.

Port of Call

While the country is consumed in a nationalist frenzy, we also need to consider the effect cruising has on the destinations. The Caribbean is built around tourism. There are only a handful of islands in the entire region that do not rely on tourism to maintain their economy. This is greatly magnified in the communities that have cruise ports.

Cruises are the lifeblood of many of the islands. The major portion of their economy is designed around giving Americans and Europeans a good time so they spend money while in port. Without that money, the local population would not have jobs; companies would not be able to keep their doors open. This would lead to some of the nicest communities on the planet becoming nothing more than ghost towns.

We also see the influence of the US cruise industry where it has magnified the local economic issues of the islands. Many islands lack ancillary businesses to support the local economy should the cruise industry fail. Hotels, restaurants, and events are specifically designed to cater to the cruise crowds. Without the crowds, these places are without purpose.

Overview

While it is not something that we often think about, cruises are the lifeblood of many cities around the world. While the delay in operation does give the cruise lines the ability to adjust their practices to make people safer, many people are losing their livelihoods with each day that the industry remains shut down. Some of these businesses will not come back.

The miasma of concern around cruising is valid. However, it needs to be tempered with the realization that the industry is working every day to make sure that their ships are safer. When the industry comes back, the bounty of cheap cruises will bring new cruisers to the market. Remember: this industry is the heart of many communities. Be a good steward, and support those businesses, too.

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Dr. Christopher W. Smithmyer

Dr. Christopher W. Smithmyer

Dr. Christopher W. Smithmyer is a writer for NRN and an adjunct professor at both Penn State University and the University of South Florida. He is the author of several books, most recently “A Criminal History of the Democrat Party” which is available on Amazon and via the publisher, Elite Exclusivity. Follow on Twitter at @Acriminalhisto1

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