Cruise Industry just shrinking? - an up date!
Still standing quiet and empty the ocean liners cost money everyday. After four smaller and one bigger company (Cruise & Maritime Voyages) filed for bancruptcy already the Headlines are not expected to get better soon. It might be a healthy cleaning of an industry that grew too fast and was a burden for many in regards to poluttion, over tourism and unethical crew management. Carnival took 18 ships out of the fleet, two ships from Pullman tours went also to the scrapyards and Aida is now considering to take ships out of the fleet. After it was reported that Genting was not paying creditors anymore there is now the first warning not to invest in Carnival.
“Carnival Corporation: Bankruptcy Is Still An Option
Oct. 12, 2020 seekingalpha.com
Carnival’s disastrous performance in Q3 shows that the cruise line industry is not going to return to normalcy anytime soon.
We continue to believe that Carnival is a very risky investment with no upside at this stage.
We stick to our opinion that Carnival is uninvestable, and it’s better to avoid its stock in the foreseeable future.
The company reported a 99.5% decline in revenues from June to August. With a monthly cash burn rate of ~$530 million in Q4 and more than $20 billion in debt, there's still a risk that Carnival will not be able to meet its obligations and will be forced to declare bankruptcy.”
Oct. 12, 2020 seekingalpha.com
TUI operating the “Mein Schiff” Fleet got saved by 3 billion Euro from the German Government.
“The tourism group is struggling with deep red numbers because of the effects of the Corona crisis. To survive the crisis, Tui has now secured government aid amounting to three billion euros”
Critics are getting loud because TUI still fires approx 9000 employees.
“The Tui Group had announced that it would cut up to 8,000 jobs, mainly abroad. In addition, the fleet of your airline Tuifly is to be reduced by more than half - according to reports, 900 full-time positions could be eliminated and several locations could be closed.”
With TUI the government was afraid to have to pay - in case of bancrupcy - customers who booked with TUI as the company is only insured up to 110 Million. This might have been cheaper then saving a company that is already long time in trouble.
“Many travel agencies are threatened with bankruptcy in the Corona crisis. 100,000 jobs are therefore at stake in Germany. According to research by the ARD political magazine report Munich, the fact that the TUI group with around 10,000 employees across Germany is receiving a billion-dollar loan, while the smaller companies with far more employees in total had to wait many weeks for their own aid package, could be due to a failure by the federal government”
The next month will show what companies can survive. It is a healthy cleaning and cruising is not over but changing. And hopefully changing to the better.
Cruiseships being scrapped - Turkey 2020
Author: Stephan Busch, Academic Director at the State University for the Humanities Moscow RGGU, Faculty of Tourism & Hospitality and the Swiss International University earned his Master Certificate in Hospitality Management from Cornell University, USA. He has a diverse experience in launching operations, business development and service training- for hotel and cruise companies in Asia, Europe, Canada and Russia.