To further illustrate the sharp decline in tourism and why, with COVID-Fear ingrained in people, it will not rebound quickly.
Carnival Corp., with 27 ships and nine brands of cruise lines, reported a record preliminary loss of $4.37 billion for its quarter ending 31 May, compared to a profit of $451 million during the same period a year earlier.
The Carnival cruise line will leave most of its cruises suspended through the end of this year and said the loss of revenue may force it to violate the terms of a loan agreement. It has not canceled plans to resume eight cruises starting 1 August.
When cruises were canceled in March under government shutdown orders, only about half of passengers holding reservations took advantage of Carnival’s offer of credits toward future trips; the other half wanted their cash deposits back, further draining the company’s reserves.
The cancellations have been forced, in part, by the Canadian government’s order that cruise ships carrying more than 100 passengers remain docked through October. That order also has led Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings to cancel all cruises until at least November.
To remain solvent, Carnival is shrinking its fleet by six older ships and may sell more as well as divesting other non-seagoing assets, the company said.
It also hopes to refinance $2.4 billion in debt, half of which matures this year.
The company has roughly $7.6 billion in liquidity but is spending about $650 million every month on fixed costs, it reported.
TRENDPOST: Cruise ships – where the first COVID Pandemonium struck – will see their revenue stream continuing to sink lower for the foreseeable future, as passengers are less likely to mingle or feel safe with thousands of other passengers. We forecast a series of bankruptcies and no return to pre-COVID Crisis passenger levels for the foreseeable future.
Moreover, as the “Greatest Depression” sweeps the globe, more people will have less money to spend in the leisure, hospitality, and tourism sectors.
