An SOS in the Corona Crisis: Cruise Industry Battles for Survival in Pandemic

You would have to be a true fan to take a cruise these days. Perhaps even a mega fan like the elderly German lady who complains of her suffering in the sunshine on the deck of the Mein Schiff 6 cruise ship. The trip to the Greek isles is her 50th cruise, but she needs a bit of champagne, she says, “because I’m so sad.”

The culprits behind her melancholy are two other ships from the travel conglomerate TUI, which have just passed within waving distance, the Mein Schiff 3 and the Mein Schiff 5. Both have been mothballed in the eastern Mediterranean for the past six months due to the coronavirus and are manned solely by skeleton crews. The visit by the ships was intended as a surprise for the passengers aboard the Mein Schiff 6, a nice greeting that also sent the message: “Look, the TUI fleet is still here.”

For the elderly German lady, the meeting of the sister ships is also a wistful reminder that she has already booked her next trip for November on the Mein Schiff 3 to the Canary Islands of Spain. At the moment, though, it is uncertain whether that cruise will actually depart as scheduled. Germany’s center for disease control, the Robert Koch Institute, declared the Canary Islands a high-risk area for the coronavirus earlier this month.

The voyage of the Mein Schiff 6 through the Aegean and Ionian seas is the first cruise with shore leave to be offered by a German cruise company since the lockdown in March. Only 687 guests are on board, but more than double that would be permitted under the current corona rules. The trip is unlikely to be profitable for TUI Cruises, which carry around 2,500 passengers in normal times. But that’s not the goal.

A Paralyzed Industry

The voyage is aimed at proving that it’s still possible to go on a cruise, that passengers have nothing to fear – that cruises are safe and the hygiene rules work. It’s not only the future of TUI Cruises that is hanging in the balance of the experiment, but also that of the entire cruise industry.

Few other industries have been as paralyzed by the pandemic as cruise ship tourism. Until the coronavirus struck in March, many companies, including German operators like Hapag-Lloyd Cruises, AIDA Cruises and TUI Cruises, knew only one trend: growth. More passengers, more ships, more destinations, greater profits. In 2019, the cruise industry employed 1.2 million people around the world. Last year, 3.1 million ship passengers came from Germany alone. But those kinds of numbers are now a thing of the past.

Once the pandemic began spreading around the world, the leisure ships were suddenly seen as threats and were no longer allowed to call at international ports. And not without reason. Earlier this year, the British Diamond Princess became a coronavirus nightmare when it experienced an outbreak in Japan and was quarantined in the Port of Yokohama. Out of 3,711 people on board, 712 ultimately became infected with SARS-CoV-2 and 14 died.

That was the beginning of the end. Not long later, 400 cruise ships were taken out of commission around the world, and most still aren’t operating today, mothballed all around the world. In Manila Bay alone, two dozen ships were anchored in May.

The international cruise association CLIA estimates that 215,800 jobs in the industry have been lost in Europe alone since mid-March. Tens of thousands of employees at cruise companies and shipyards have been placed in work furlough programs, and it remains uncertain whether their jobs will return at all.

Meanwhile, the loans for the giant ships, which can cost up to a billion dollars each, still have to be serviced, unless companies have managed to get their payments deferred. On top of that come maintenance costs, which can swallow millions of euros a month – per ship. Market leader Carnival alone is burning through a half-billion euros per month – just as much as German national airline Lufthansa.

Now, the first cruise lines are tentatively venturing a new start, with a cruise here and a cruise there. There is no margin for error: Just a single case of the coronavirus on board could be enough to eliminate any trust people have left in the industry. A recent survey by German public broadcaster ZDF found that half of the country’s cruise vacationers wouldn’t book a trip right now out of fear of the pandemic.

Efforts to ensure safety have also been significant on board the Mein Schiff 6. Prior to boarding, all passengers had to produce a negative coronavirus test that was no older than 72 hours. The journey to the point of departure, Crete’s capital city of Heraklion, had to be made exclusively on a specially chartered aircraft operated by sister company TUIfly. Masks are mandatory on board and registration is required for all shows, the sauna and the gym. Shore excursions are only allowed within the group and boarding and disembarking from buses is done row by row. Contact with locals is prohibited.

“We’re Ready to Go Again”

There is no shortage of people who would like to see an end to these kinds of cruises. Environmentalists would be happy if the emissions-belching ships would vanish, while cruise pilgrimage sites like Barcelona and Venice are currently experiencing just how quiet things can be without the masses of cruise passengers.

Others, though, would be lost in a world without cruises.

“We’re ready to go again,” Eugen Hoffmann, 36, wrote in a text message to his partner Heiko Rühl, 38, in July, complete with a heart emoji at the end. Fifteen minutes earlier, TUI Cruises had announced it would resume operations at very short notice. Rühl says he hadn’t yet heard the news yet, but knew immediately what the text meant. He says it was an “emotional moment.” There was no question about whether they would want to be on the first cruise.

Both work at a car dealership in the town of Wetzlar and they go on a cruise four times a year. They usually book the cheaper inside cabins without daylight because they spend most of their time on deck or in one of the restaurants, anyway. “You only see beautiful things,” says Hoffmann. “And the people are friendlier than they are on land.” They share the pleasure they find in travel on their Instagram account, @Cruisingandbeyond.

Rühl has a heart defect, so he has to look out for himself. But he feels he’s in good hands when he’s aboard the Mein Schiff 6. “We’re in the TUI bubble here.”

In an attempt to seal off passengers from the outside world, even on shore leave, TUI Cruises is recreating in miniature what Germany tried to do in March, when it closed its borders in the hope of keeping the virus away.

But that can also be the source of friction, and in that sense, the voyage also mirrors the current situation in Germany. During an excursion to Corfu, a bulky Bavarian rebukes a young mother from Berlin for not wearing a mask. Her husband later takes revenge for the reprimand by snitching to the tour leader that the man’s daughter broke the rules by buying a souvenir refrigerator magnet for her refrigerator in a shop. But she did so without going into the shop, so there were no consequences.

But two other passengers were asked to leave the cruise only two days into the trip. After they became separated from the group in Piraeus, the port in Athens, they were not allowed back on board.

Hygiene Measures

Everyday life aboard the Mein Schiff 6 is also different from normal. Before entering the breakfast room, each guest is supervised as they wash and disinfect their hands. And the food in the buffet is served by staff. Those who cross the distancing lines on the floor receive a reprimand.

The staff, who clean the tables with large disinfectant bottles and rags, look like warriors in the battle against the virus. There are 663 crew members on board, almost as many workers as there are passengers. Normally, the majority of the staff on the cruise ships are Filipino, but due to travel difficulties in getting out of the Philippines, most of the staff on this ship are from Indonesia. They are also tested for the coronavirus before traveling and were placed in quarantine when they first boarded the ship. They all wear face masks – much more conscientiously than at many restaurants on the mainland.

It tends to be the passengers who are sometimes careless about their masks. Many forget to report in the mornings to have their temperature taken each day, prompting Captain Simon Böttger to broadcast a reminder over the loudspeakers. Those who insist on being stubborn receive a letter in their cabin.

Going on a cruise is stressful these days – and pleasant at the same time. There’s finally enough space in the pool on Deck 12, there are free lounge chairs all the time, and there’s no more crowding at the railing when a whale appears or the sun goes down.

Around 40 percent of the travelers on this voyage are regulars, one-third more than before the coronavirus. Those who have sailed with the company at least three times are considered regulars.

Setbacks

Jutta and Hans-Dieter Hartmann are from Düsseldorf. Jutta, 59, is a banker and Hans-Dieter, 61, is an insurance salesman. They’re relative newcomers: They have travelled with TUI cruises before, “but only six times,” they say. Their preferred cruise line is AIDA of Germany. “We’ve gone on 23 cruises with them.” Last year, the Hartmanns even bought shares in AIDA’s parent company, the American cruise giant Carnival. The stocks have lost 70 percent of their value since mid-February.

AIDA had actually planned to resume cruise operations in August, but it was ultimately unable to “Cast Off!” as the company’s brash slogan promised. At first, almost a dozen of the intended crew members were found to be infected with the coronavirus, and then, the authorities withheld approval. The first ship is now set to sail from Civitavecchia, Italy, in October.

The failure of Norwegian cruise line Hurtigruten when it tried to resume cruises was not only more dramatic, but also self-inflicted. At the end of July, the coronavirus struck the Roald Amundsen as the vessel was traveling in the Arctic. At least 71 passengers and crew members became infected with the virus during two separate journeys. What seemed like an accident ultimately turned into a scandal. The report from the investigation stated that Hurtigruten not only refrained from testing its crew for the coronavirus, but also tried to cover up the initial cases, thus contributing to the outbreak.

TUI Cruises has also had to cope with a handful of setbacks, the most severe of which taking place at the end of April when the Mein Schiff 3 arrived in the port city of Cuxhaven carrying 2,900 crew members. A large part of the crew were to be returned to their home countries from the city, but because nine crewmembers tested positive for the coronavirus, the ship was quarantined for several weeks. German Seamen’s Mission, a nonprofit organization that provides support to maritime crews, had to prevent desperate crew members from harming themselves or jumping into the water. Some agreed to stay on board to earn money. There’s always plenty to do, even when the ship is docked. Others just wanted to go home, but some countries had closed their borders, even for their own citizens, including the Philippines and Nicaragua.

TUI Cruises head Wybcke Meier and her team called embassies, consulates and governments. “In the end, almost everything worked, it was just a long and tedious process,” says Meier. She has also joined the Mein Schiff 6 cruise to Greece for a few days. The waiter calls her “Madame Wybcke.”

“We Have To Be Good”

Meier, 51, previously served as the head of marketing at a TV travel channel and worked for the travel company Öger Tours before landing at TUI Cruises as the company’s CEO. She now faces the tough task of navigating the company out of the crisis. “We would have been ready for a first trip at the beginning of July,” Meier says, but the company first had to coordinate its hygiene and coronavirus safety plan with the authorities in Hamburg and Kiel, where the first trips departed, and later with those in Greece, the first destination with shore excursions. Finally, the plans also had to be approved by Malta, under whose flag the fleet sails. The first Mein Schiff vessel set sail at the end of July, a three-day trip from Hamburg with no stops at all.

Meier is reserved when it comes to company statistics. TUI Cruises is a joint venture between the German travel conglomerate TUI and the American cruise company Royal Caribbean, and the concerns of both need to be taken into account, so she won’t say how much money the company is burning through. All she’ll say is that it is only worthwhile putting a ship to sea once 30 percent capacity has been achieved. Of the company’s 421 employees, 60 percent are currently furloughed. Most crew members aren’t permanent employees, anyway. And when no voyages are planned, they aren’t recruited.

But Meier does have clear words for the German Foreign Ministry’s travel warning against taking cruises. “I was annoyed by the blanket warning for a single segment of the travel industry,” she says. By pushing ahead, she says, she wanted to “send a message countering the view that cruises are disappearing anyway, that they’re a waste.” It will take some time for TUI Cruises to regain its former strength, “but that will happen at least by 2022,” she promises.

For Meier to reach that goal, many things on board are now being run differently than in the past, including the entertainment. The DJ has been instructed not play anything too lively so that people aren’t tempted to go crazy. Even something as basic as Abba could be enough to threaten passengers’ health. Instead they are playing slower music, like the tunes of pop music singer Vicky Leandros.

The Greek singer is traveling on this Mein Schiff 6 as the ship’s star entertainer. Her German hit “I Love Life” would be a fitting theme for the cruise. When she performs on the ship, Leandros does so in front of empty seats – not because of any lack of popularity, but due to the rules for containing the coronavirus. The first five rows must be empty. So that everyone gets a chance to enjoy the performance, she goes on stage twice – in front of an audience of 350 people each time in a theater built to seat 1,000. There are many conditions for the concert. Leandros says that in normal times, she would go into the audience from the stage and walk through the rows of seats. Instead, she now just walks in front of the stage. “We can’t dance!” she tells her audience, pleadingly. “We have to be good.”

Whether and when cruises will regain their old appeal is questionable, even if industry representatives like TUI Cruises head Meier are making every effort to paint the rosiest picture possible. Until then, taxpayers will have to help prevent the worst.

Generous Loans

Germany’s KfW state bank has provided generous loans to the industry, even to foreign cruise companies provided that they order their giant vessels from one of the two German shipyards that specializes in cruise ships: the Meyer shipyard in Papenburg or the MV shipyards in Rostock and Wismar. The volume of loans that have already been granted totals around 8 billion euros.

This spring, during the peak of the crisis, the German Economics Ministry also decided to defer the repayment of loans by the companies for one year. If they fail to pay the loans back, German taxpayers will have to foot the bill under the provisions of the Hermes insurance coverage for export transactions. The idea behind the loans is to prevent foreign cruise companies like Carnival or Royal Caribbean from cancelling ships they have ordered out of fear of not being able to pay for them.

All in all, the German government has provided guarantees on shipbuilding contracts worth a total of 25 billion euros. It would be a debacle for the government if that money were to be lost if the cruise industry recovers too slowly.

Norbert Brackmann, a member of the conservative Christian Democrats (CDU) and the maritime policy coordinator for the federal government, sees no problem with the preferential treatment the industry is getting. “We are the global leader in the construction of cruise ships,” he says. “These are highly qualified jobs that we want to preserve in Germany.”

For Bernard Meyer, those words are a life insurance policy. Meyer, 72, owns the world’s second-largest shipyard for cruise ships. Almost all the major cruise ship companies buy his vessels – at least they did until the pandemic struck. And they did so despite the fact that Meyer’s ships are more expensive than those offered by the competition.

Before the pandemic, the shipyard’s main priority was building as many frills as possible into the ships. Features like a glass observation capsule 90 meters above the waterline on the Spectrum of the Seas. Or the bumper cars on Deck 15 of the Anthem of the Seas. Or a water slide that runs down the smokestack of the Disney Dream.

But those kinds of outsized fantasies and Las Vegas-style accoutrements feel like they’re from another time. Instead, ships are being scrapped that are still perfectly operable. Market leader Carnival alone wants to part with 18 of its around 100 vessels.

Can Ships Be Made Virus-Proof?

One of the main questions Meyer’s customers are asking today is how they can make their ships virus-proof. He’s trying to find solutions together with them. Sometimes, it’s sufficient to just move the tables in the restaurants to change the air flow. The shipyard is also providing software for tracking possible chains of infection on board. Almost all of the company’s employees at the Papenburg shipyard are in some state of furlough, with most working 30 hours a week rather than the usual 35. The company still has work until 2025, but it has no new orders on the books.

“I’m not sitting in a corner complaining about how sad everything is,” says Meyer, adding that he has been asked “hundreds of times” if his shipyard can survive. “They did when the Japanese came of age in shipbuilding and when the Koreans became a power, too. Now, it’s the Chinese who are competing with us. And there’s also the coronavirus. But we can’t spend all day thinking about how we want to die.”

Meyer’s son Jan, 43, is sitting next to him, the seventh generation in shipping. He studied at the prestigious Massachusetts Institute of Technology in Cambridge and has been running the company again since this summer after a stint at the family’s shipyard in Turku, Finland. For Meyer junior, there is no question that things will continue, somehow, as they have for the past 225 years. “You don’t pass ashes from one generation to the next, you pass fire,” he says.

The Meyers were able to convince their customers to postpone the delivery of ships they have ordered rather than cancel them. But therein lies the problem: Eighty percent of the purchase price isn’t due until delivery. In order to bridge the liquidity gap, KfW and the shipyard’s principal banks have provided the company with loans. The father and son aren’t expecting any new orders before 2022. Jobs are at stake. They have also been thinking about other things they could build.

Ferries perhaps, which could become more environmentally friendly and modern in Europe. Or riverboats powered by fuel cells. In any case, the Meyers want to benefit from the fact that environmental issues are becoming more important. They built the first cruise ship to be powered by liquified natural gas (LNG), after all, which cruise line AIDA commissioned in 2018.

Combustion of LNG emits fewer nitrogen oxides and very few soot particles or sulfur oxides. However, production of the gas does emit methane that is harmful to the climate. The nature conservation organization NABU, which initially praised the LNG ships, is increasingly critical of them. Daniel Rieger, the man responsible for transport policy at NABU, even fears that the industry could reduce planned investments in environmentally friendly technologies in light of its high losses. “We are very concerned that billions will be lacking for investment in environmentally friendly technologies,” he says.

For example, it could reduce a willingness for cruise companies to purchase shore power when ships are in port, something that only a few cruise ships have done so far, anyway. It is considerably more expensive for cruise ships to purchase shore power than for them to generate electricity by running the ships’ diesel engines.

The industry could even hope for public and political understanding if it freezes climate and environmental protection measures, says Rieger. After all, jobs would be at stake. “We are calling on the cruise ship companies,” he says, “Please use this time to develop concepts for the future.” He argues that only those who can prove that they will be emissions-free in 2050 should be given any taxpayer-backed money.

The coronavirus could change the industry in other ways as well. CDU politician Brackmann says he sees a reversal of the trend toward massive ships on the horizon. “Instead of the largest cruise ships to date with space for 4,000 to 5,000 passengers, vessels with space for up to 2,500 seats are now increasingly in demand,” he says. “This could also open up new destinations.”

Medical Considerations

But the opposite is also conceivable, given that larger ships allow more distance between passengers.

In any case, size alone will not protect against viruses. It’s also important to have a medical plan. Mein Schiff 6 has two doctors on board, two nurses and a hygiene specialist. There are two intensive care beds and respirators as well as a coronavirus testing device that provides results within 70 minutes. Under the plan, if a patient is infected, he or she will first be isolated in their cabin and then taken off the ship wearing a full body protective suit, says board doctor René Belz.