Bon Voyage; Let’s Talk Cruise Ships

About | Mission | Blog

Cruise ships made headlines for all the wrong reasons in the early days of the novel coronavirus. As the world watched from afar, cruise ship passengers lined their balconies, awaiting a return to a land quite changed from the one they left.

The 2020s were meant to be a boom decade for cruises. Nineteen new ships worth an estimated $9bn were set to start touring the world this year alone. Many of the major cruise liner company stock prices were at (or near) all-time highs. The demand for cruising reached new heights with 32 million passengers expected to sail in 2020, set to generate $71bn. Ports around the world were being developed to accommodate cruise ships and the passengers that flood off them.

Alas, this optimism was quickly reversed.

Coronavirus has put the cruise industry on hold, and the 338 ships that make up the industry’s global fleet are all docked. These 32 million passengers that were projected to sail this year are stuck at home. The three largest companies, Norwegian Cruise Line Holdings, Carnival, and Royal Caribbean, that account for 75% of the market, have taken out loans to keep afloat. The “No Sail” edict issued by governments have kept these ghostly ships marooned in harbours in what is known as “warm lay-up”, where the ships’ systems are kept running to make sure that they don’t seize up. Carnival alone is hemorrhaging $1bn a month to maintain its fleet, and raised $6.4bn through equity and debt in April.

The Centers for Disease Control and Prevention (CDC) announced in July the extension of a No Sail order for cruise ships through September 30, 2020. Even with this uncertainty, many companies in the industry are taking bookings but don’t yet know when they will be able to restart. After the financial crisis in 2008, the cruise industry took three years to recover. This time, it is expected to take far longer, because people’s reason for not traveling is not purely financial.

All eyes are now on how the cruise industry responds to lure consumers back on their vessels, for what will presumedly be a radically different cruise experience. Even though cruise ship companies have an extremely loyal customer base, the risks of catching coronavirus and the added strain of social distancing rules at sea place an unusual burden on operators and don’t promise for a relaxing experience for travelers.

However, the cruise industry is not alone. Travel, tourism, and hospitality businesses are under immense pressure. How companies rebuild public trust with new health and sanitation measures will be a critical part of their existence. Additionally, given the significant environmental footprint these cruise ships leave, this could be their chance to re-design, innovate and make for a cleaner, safer, healthier industry overall.

Hamish Baillieu, Investment Associate

We’re LIVE! Thursday, August 13th at 12:00pm ET, join our CIO, Kate Starr with guest appearances from Annie Donovan, COO of LISC and David Sharp, Founder of Up Community Fund who will be discussing trends, problems and solutions in the Community Development space. At its core, community development elevates community-driven outcomes above market-based or government-driven ones. Every community, no matter its wealth and income, desires some level of self-determination over its quality of life. Housing, education, health, recreation, open space, commerce, culture — these elements come into play in every community, but community involvement differs from place to place and movements from the Civil Rights marches to BLM show us what disparities exist between them. We look forward to discussing how experts and organizations have supported a variety of communities looking to make positive change especially for low-income people and families — and how we can invest in them to ensure they become better places to live, work and play. Join us!

Please register here. We look forward to seeing you soon!

The first cruise ship to return to the ocean since March, the MS Roald Amundsen, is moored at a quay in Tromso, Norway. At least 36 crew members from the ship have tested positive for coronavirus, with the Hurtigruten CEO, Daniel Skjeldam, conceding “We have made mistakes”.

Loyal cruise sailor? Sorry to hear. Look at these countries trying to lure people in through introducing remote work visas as another option!

Want to get insight into what it’s like working on a cruise ship? Read Cruise Confidential by Brian David Bruns. Brian spent a year working for Carnival Cruise Lines and gives great insight.

This newsletter is intended solely for informational purposes, and should not be construed as investment/trading advice and are not meant to be a solicitation or recommendation to buy, sell, or hold any securities mentioned. Any reproduction or distribution of this document, in whole or in part, or the disclosure of its contents, without the prior written consent of Flat World Partners is prohibited

Thank you for subscribing to our newsletter. Our privacy policy is available at anytime for you to review in order to understand how we protect your personal identifiable information. By subscribing to the newsletter you have consented to our policy

Forwarded this message? Subscribe Here!

Copyright © 2020 Flat World Partners, All rights reserved.
You are receiving this email as a believer in competitive financial and social returns.

Our mailing address is:

Flat World Partners

386 Park Avenue South

18th Floor

New York, Ny 10016



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store