On April 26, 2014 the government of Ukraine announced that Russian troops had crossed into Ukrainian territory. This invasion led to widespread international sanctions against Russia and a sharp drop in travelers spending money on cruises. Since then, visitation has been steadily recovering without any major incidents until now.
Princess Cruises is one of the largest cruise lines in the United States. The company has been impacted by Russia’s invasion of Ukraine. Princess Cruises has seen a decrease in bookings and some ships have had to cancel their cruises. Read more in detail here: princess cruises.
The main cruise firms are already feeling the repercussions of Russian military attacking Ukraine and crossing the border in less than 24 hours. The stocks of Carnival Corporation, Royal Caribbean, and Norwegian Cruise Line Holdings all dropped significantly.
But that’s not all: fuel costs have been steadily growing in recent months, with the price of Marine Gas Oil having risen from $383 in 2020 to over $800 today. Aside from the financial costs, various cruise companies have regularly sailed the Black Sea, voyages that will most likely be canceled due to the looming threat of war.
Under Pressure: Travel Stocks
The invasion of Ukraine by Russia comes at the worst possible moment, with the cruise industry on the cusp of recovery and the danger of COVID-19 and the Omicron version all but gone. Norwegian Cruise Line Holdings could hardly have chosen a worse day to release its poor fourth-quarter financial results for 2021.
Photo credit: Shutterstock.com/Mia2you
The three main cruise lines, Carnival Corporation, Royal Caribbean, and Norwegian Cruise Line Holdings, all began much lower than the previous day’s closing price, with pre-market trade strongly favoring the tourism industry.
Carnival Corporation has lost about $4 per share since February 16 and $1.40 before to the market opening; Royal Caribbean has lost more than $4 prior to the market opening. Pre-opening, Norwegian Cruise Line Holdings lost $2.80, or 7% of its value.
The cruise line operator’s shares fell in premarket trading after reporting a more comprehensive quarterly loss than anticipated and revenue that missed estimates. It’s among Under Pressure: Travel Stocks today, coming largely from Russia’s invasion of Ukraine.
RUBEN M RAMOS / Shutterstock photo of a cruise ship refueling
Simultaneously, the cruise industry’s most major expenditure, gasoline, is changing dramatically. Fuel costs have been growing for a long time, but in the past 24 hours, MGO (Marine G Oil) has been selling for $832 per metric ton in Rotterdam. This is about quadruple what it was in 2020, and it will very certainly effect cruise costs.
Cruises on the Baltic and Black Seas are in jeopardy.
Amid the tensions between Russia and Ukraine at the time, most, if not all, cruise companies canceled their Black Sea cruise season in November 2014. This year is expected to be the same. And it wouldn’t only be the Black Sea that would be affected.
A trade ban with Russia would necessitate the cancellation of Baltic cruises that included stops in St. Petersburg. Something Norwegian Cruise Line Holdings, which has about 50 calls planned to St. Petersburg this summer, has already considered, as was revealed on a Thursday morning earnings call:
“Worst-case scenario, this is something we’ve been thinking about.” If we are unable to stop in Saint Petersburg or the adjacent territories, there are several alternative ports in the Scandinavian region where we may dock. Europe is also a large continent. “This is just impacting a tiny percentage of Europe, and there are a lot of other countries where we can operate,” said Mark Kempa, the cruise line’s chief financial officer.
Photo credit: Shutterstock/Felix Mizioznikov
Other cruise lines have already issued statements stating that they are actively monitoring the situation and would take action if and when required.
Cunard and P&O Cruises UK posted the following message on their official Facebook accounts:
“In view of the present situation in Ukraine, we will continue to constantly monitor the situation and, if required, adjust itineraries in accordance with guidelines.” Compliance, environmental protection, and the health, safety, and well-being of our passengers, crew members, shoreside staff, and the people in the areas we touch are our top priorities, and we will notify guests as soon as possible of any changes.”
Pixinoo / Shutterstock.com / pixinoo
SAGA Cruises, a UK cruise line, has already diverted a planned Black Sea cruise, according to a Saga spokesperson:
“Guests will be notified about the adjustment shortly, and the remainder of the trip will be unaffected,” stated the spokeswoman. “We’re currently assessing the effect of today’s [Thursday] events on our Baltic cruises later this year, which were scheduled to stop in St Petersburg.” We will continue to monitor the situation and, if required, make any changes to our itineraries to ensure that our visitors have the best possible experience.”
For those who believed the bad times were finally over, today confirmed once again that there is always something fresh around the corner.
Today, though, our thoughts are with the hundreds of Ukrainian crew members on cruise ships, distant from a country in upheaval, in the hope that they, too, will soon be able to return home in peace.
The “carnival cruise line news” is a blog post that discusses how Russia’s invasion of Ukraine has impacted the cruise industry.
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