After the COVID-19 epidemic occurred on the "Diamond Princess" cruise ship, its sister ship "Grand Princess" fell into another epidemic crisis. According to the first batch of inspection results, 21 people on the Grand Princess cruise ship have been diagnosed with COVID-19, including 2 passengers and 19 crew members.
California Governor Gavin Newsom stated on the 8th that the Grand Princess cruise ship will dock at a non-commercial port in Oakland, California on the 9th, and passengers will disembark in batches and undergo quarantine.
Princess Cruises, the world's third largest cruise brand, is part of Carnival Corporation, the world's largest vacation company. A series of epidemics on Princess Cruises plunged Carnival Corporation into its darkest moment. On the last trading day of last weekend (March 6), the stock price of Carnival Cruise Line, which is listed in the United States, reached a low of US$26.1, a 49.6% drop from the highest point of US$51.94 on January 17, and was almost cut in half.
As the epidemic spreads in the United States, people may become increasingly afraid of sitting on a cruise ship that is too airtight. The cruise industry is also urgently trying to save the industry. On March 7, U.S. time, U.S. Vice President Pence stated that cruise sailings would continue after meeting with cruise industry executives in Florida. The U.S. government does not ban cruise ships, but only reminds people with underlying health conditions not to go on cruises.
Meanwhile, the Miami-based cruise line will institute stricter quarantine rules, begin screening passengers with temperature checks and move sick passengers to medical facilities on land. These actions will be completed within 72 hours.
The "Supreme Princess" was also affected by the epidemic
The plans were announced by U.S. Vice President Mike Pence after meeting with the CEOs of Carnival Corporation, Royal Caribbean Cruises Ltd., Norwegian Cruise Line and MSC Cruises. It is worth mentioning that in the current global market, it is the above-mentioned four major cruise ships that monopolize more than 80% of the market.
After this important meeting in the cruise industry that day, Pence and the US government have decided to speed up the handling of the Grand Princess cruise ship to avoid staying on the ship for too long and causing the number of infected people to double.
It is reported that the confirmed patients on the Grand Princess will be the first to disembark and receive treatment at medical institutions in California; California residents who do not show symptoms will be sent to Travis Air Force Base near Sacramento, California, and San Diego. Marine Corps Air Station Miramar will be quarantined; passengers from other U.S. states will be sent to Joint Base San Antonio Lackland in Texas and Dobbins Air Force Base in Georgia for quarantine.
As for the hundreds of foreign passengers from 54 countries on the cruise ship, the U.S. Department of Health and Human Services stated that it is closely contacting their home countries to arrange charter flights to return them to their countries. The "Grand Princess" will leave the Port of Oakland after the passengers disembark and stay off the coast of California, while the 1,100 crew members will undergo isolation treatment on the ship.
In fact, the U.S. government's handling of the Grand Princess has been highly controversial. U.S. President Trump stated on March 6 that he did not want the passengers and crew on the ship to go ashore, but should stay on the ship for isolation. But having learned from the experience of the "Diamond Princess", quarantine on the ship is obviously worse, so Princess Cruises President Swartz believes that quickly dealing with those most at risk is crucial to preventing the spread of the virus.
The "Grand Princess" cruise departed San Francisco for Mexico on February 11, returned to San Francisco on the 21st, and then started a new journey to Hawaii. However, a 71-year-old male passenger died of illness on March 4 after returning home from a journey from February 11 to 21, becoming the first death case of COVID-19 in California. After receiving the news, the Grand Princess cruise ship canceled its stop in Mexico and sailed directly back to San Francisco. Since the 5th, it has been stuck at sea about 50 miles off the coast of San Francisco.
There are 3,533 people on board the Grand Princess, including 2,422 guests and 1,111 crew members. The Chinese Consulate General in San Francisco stated that there were 11 Chinese staff and 9 Chinese passengers from the mainland on board the Grand Princess.
Compensation and route cancellations continue
As the COVID-19 epidemic continues to spread in the United States and the outbreaks occurred on the "Grand Princess" and "Diamond Princess" cruise ships, on March 5, the U.S. government issued an emergency notice requiring U.S. citizens, especially those with underlying diseases, to , it is not suitable to travel by cruise ship.
This warning is actually a cautious pouring of cold water on the cruise industry, because according to data from the Cruise Lines International Association, CLIA, in 2018, people over 70 years old accounted for 14% of cruise passengers, and people aged 60-69 accounted for 19%. It is said that retired people are the largest source of customers in the cruise market.
Cruise lines are also actively turning around the unfavorable situation.
After the outbreak, Princess Cruises announced that all guests on the Grand Princess will receive a full refund. At the same time, Princess Cruises will also provide reasonable compensation for additional expenses incurred such as ticket changes. In addition, all guests on this voyage will receive booking credits for future voyages equal to the tickets purchased this time.
In addition, the latest announcement on the official website of Princess Cruises on March 8 stated that the itineraries of seven of its Princess cruise ships have been changed and canceled. For example, Grand, Royal and Sun have all canceled their voyages on March 7; not only have they canceled their entire March voyages, they have also suspended operations of all their voyages from Shanghai to and from June 3 to September 30, 2020. This means that almost all of Princess Cruises’ cruises in the Chinese cruise market this year have been cancelled.
In addition, after consultation with Pence, the cruise company will further strengthen entry and exit inspections and establish COVID-19 virus testing on board.
Pence also revealed that the cruise industry will also work with public health agencies such as the U.S. Centers for Disease Control and Prevention to develop ship quarantine standards and transport sick passengers to shore for treatment.
The stock price suffered a "half cut"
In fact, the "Grand Princess" is already Carnival's third cruise ship to be caught in the epidemic.
On February 1, a Hong Kong passenger on Carnival’s luxury cruise ship Diamond Princess was diagnosed with the new coronavirus. It was not until March 1 that all people on the ship disembarked, and the number of confirmed cases on the ship was as high as 696.
At almost the same time, a Holland America cruise ship owned by Carnival was refused to dock at ports in Japan, South Korea, Guam, and Thailand because it was suspected of carrying a person infected with the new coronavirus. The "Westerdam" was finally accepted by the Cambodian port of Sihanoukville on February 13. On the evening of February 15, the Malaysian Ministry of Health announced that an 85-year-old American woman who disembarked from the "Westerdam" cruise ship was diagnosed with the new coronavirus.
Confirmed cases of the new coronavirus have appeared one after another on its cruise ships, and the impact on Carnival Cruise Line Group is self-evident.
The most obvious manifestation is the change in stock price. Carnival Cruise Line's stock price has plummeted since the outbreak. On January 17, the closing price of Carnival Cruise Line stock was $51.94, and on March 6, the closing price of Carnival Cruise Line stock fell to $27.15, a decrease of 47.7%.
"Suffering brothers" include Royal Caribbean Cruises and Norwegian Cruise Line. Royal Caribbean closed at $65.01 per share on Friday, down 51.9% from January 17. Norwegian Cruise Line closed at $27.01 per share last Friday, also down 54.7% from January 17.
Carnival Corporation believes the impact of its global bookings and cancellations due to the coronavirus will have a material impact on its financial results, which was not anticipated in the company's previous 2020 earnings guidance.
Due to the evolving situation, Carnival Corporation is currently unable to determine its full financial impact for fiscal 2020. But if the company has to suspend all of its operations in Asia before the end of April, it would impact its fiscal 2020 financial results by $0.55 to $0.65 per share. Additionally, the impact on global bookings will further impact the company's financial results. Carnival Corporation is currently evaluating contingency plans to mitigate the impact and will release its first-quarter 2020 earnings report at the end of March.