US cruise ship recovery hits tough weather as labor crisis deepens

The U.S. cruise ship Norwegian Cruise Line Holdings Marina arrives in Havana Bay, Cuba March 9, 2017. REUTERS/Alexandre Meneghini/File Photo

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July 20 (Reuters) – Andrea Mather’s plans for a long-awaited summer cruise around the Hawaiian Islands with her financial analyst husband unraveled after her booking with Norwegian Cruise Line’s (NCLH.N) Pride of America was canceled due to a staff shortage.

It was the second time this year that the 55-year-old housewife’s plan to go on a cruise has been cancelled.

The cruise industry is once again navigating choppy waters as it faces a storm of labor issues, searing inflation and the threat of recession, after barely stabilizing after the hits an 18-month shutdown due to the pandemic.

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Wall Street analysts have already cut their 2022 revenue estimates for cruise operators by 5%, on average, since the start of the second quarter.

“(The labor shortage) couldn’t come at a worse time as the cruise industry is finally starting to recover from being the industry hardest hit by COVID,” said Jim Corridore, analyst of the travel and leisure to data analytics company Similarweb.

A typical cruise liner is like a mini-city on the high seas, where hundreds of people work in shifts to ensure its smooth sailing, while meeting the diverse demands and needs of its customers.

The industry employs around 250,000 onboard workers from more than 100 countries, and their jobs range from ship captain to cocktail mixer, according to the trade association Cruise Lines International Association (CLIA).

However, pandemic-related visa restrictions on travel to many countries and a general preference for flexible working hours have hurt the industry’s ability to increase its workforce to meet a boom in travel and business. Recreation.

This has forced Carnival Corp (CCL.N) to make some changes to the services it offers, such as reducing restaurant hours and implementing occupancy constraints on some trips.

Norwegian Cruise Line has canceled bookings on its US-flagged Pride of America ship, while Royal Caribbean Group (RCL.N) has also been the subject of complaints from passengers who visited the online messaging platform Reddit to report the poor level of service. on its cruises.

“It’s hard to describe the overall service on cruises right now as exceptional simply because they’re understaffed,” said Jessalynn Strauss, a college professor who has been on 17 Royal Caribbean cruises since the restart.

Royal Caribbean did not respond to a request for comment.

INFLATION FOILS SUMMER HOLIDAYS

A tight labor market isn’t the only headache for cruise lines looking to cash in on pent-up demand from hungry travellers. Rising fuel prices and soaring inflation also threaten to derail any recovery.

High inflation for decades is particularly affecting American retirees, who are among the main demographic groups in the cruise industry.

M Science analyst Michael Erstad said cash-strapped consumers could turn to more affordable ways to unwind, including visiting theme parks and amusement parks.

Cruise operators, however, are still confident about the industry’s longer-term recovery, although the strength of their summer sailing season, which typically accounts for a large part of their operating income, is still under the cloud.

The industry’s contribution to the global economy has more than halved to $63.4 billion in 2020 due to the pandemic, according to CLIA, and if current issues persist, it will be difficult for the sector to bounce back from these levels.

For now though, Mather still hopes to sail around the Hawaiian Islands and has booked a trip for next year.

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Reporting by Praveen Paramasivam in Bengaluru; Editing by Sweta Singh and Anil D’Silva

Our standards: The Thomson Reuters Trust Principles.

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