When the massive 2,670-passenger cruise ship Diamond Princess was quarantined off Japan in February 2020 following an outbreak of Covid, it became a grim omen of the chaos soon to befall the global economy.
The spread of the virus quickly began to hit the travel sector, with ships held at anchor and passenger aircraft grounded.
Travel restrictions effectively put the industry into stasis as many companies haemorrhaged cash in the form of upkeep costs.
Holiday makers snap up cruises to see the Northern Lights
But the cruise firms – once the poster child for the industry’s pandemic woes – are now steaming ahead and are set for a record year as passengers come back.
Around 35.7m holidaymakers are expected to travel on cruise ships this year, up by more than 4m on the 31.5m in 2023, according to the Cruise Lines International Association.
This will also be 6pc higher than the number of passengers who travelled in 2019.
David Bernstein, chief financial officer of the cruise firm Carnival, which owns the Diamond Princess, said the industry was ‘benefiting’ from consumers increasingly opting to spend their cash on ‘experiences’ such as holidays rather than on material goods.
This was paying off handsomely, with Carnival boss Josh Weinstein previously saying the firm was entering 2024 with ‘the best-booked position we have ever seen’.
After plunging during the pandemic as demand evaporated, the world’s major listed cruise firms experienced a revival of their share prices last year.
Shares in Carnival rose 130pc from December 30, 2022 to Wednesday last week, while rival Royal Caribbean surged 162pc in the same period, and Florida-based Norwegian Cruise Line climbed 50pc.
The travel division of Saga, the over-50s holiday and insurance group, said its ocean and river cruise sector returned to profit in the six months to July 2023 as it rebounded from a slump.
Andy Harmer, UK managing director at the Cruise Lines International Association, said the industry body was expecting ‘more passengers than ever before will take a holiday at sea in 2024’, adding that another 20 massive cruise vessels would also be entering the market this year.
Calm waters: The Northern Lights, top, are a big draw; below, passengers leave Covid-struck Diamond Princess
But while the cruise industry may have avoided being sunk by Covid, the seas ahead are anything but calm.
Although the pandemic may be over, many big players are saddled with large debts that were taken out to keep them afloat during the stoppage.
In its results in December, Carnival revealed that it was still nursing a debt pile of ‘just over’ £23.5bn.
This followed results from Royal Caribbean in which it reported that in September it was sitting on long=term debts of £14.1bn. Other concerns include another rise in fuel costs, with recent instability in the Middle East threatening to push up the cost of oil.
The conflict could also have more direct implications as cruise companies are being forced to reschedule itineraries to remove stops at ports in Israel and Egypt – as well as avoiding the Red Sea where cargo ships have recently come under attack from Iran-backed Houthi rebels in Yemen.
