The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bay Street merchants and other cruise ship-dependent sectors were yesterday urged to “budget for survival” until at least 2020 year-end after the industry further delayed its return to November.

Charles Klonaris, the Downtown Nassau Partnership’s (DNP) co-chair, told Tribune Business that the longer the cruise industry delays the resumption of sailing the more likely “the natural phenomena” of increased business failures and rising unemployment becomes.

He spoke out after Cruise Lines International Association (CLIA), which represents the major cruise lines such as Carnival and Royal Caribbean, confirmed that its members had decided to extend their voluntary suspension of sailing from US ports until at least October 31.

That represents a further month’s delay to the Centres for Disease Control and Prevention (CDC) imposed ‘no sail’ order, which is currently due to expire on September 30, as the CLIA warned that the industry’s restart hinges on COVID-19 conditions in a US market that supplies most of its members’ passengers.

“Despite the valuable alignment between CLIA’s previous voluntary suspension to 15 September and the CDC’s current ‘no sail’ order date of September 30, we believe it is prudent at this time to voluntarily extend the suspension of US ocean-going cruise operations to 31 October,” the CLIA said.

“This is a difficult decision as we recognise the crushing impact that this pandemic has had on our community and every other industry. However, we believe this proactive action further demonstrates the cruise industry’s commitment to public health and willingness to voluntarily suspend operations in the interest of public health and safety, as has occurred twice prior.

“CLIA cruise line members will continue to monitor the situation with the understanding that we will revisit a possible further extension on or before September 30, 2020. At the same time, should conditions in the US change and it becomes possible to consider short, modified sailings, we would consider an earlier restart.”

The Bahamian economy’s fate ultimately hinges on whether a US market that provides 82 percent of annual stopover visitors can get its COVID-19 outbreak under control. That appears unlikely, at least in the short term, as the US now has over 5m cases and some 162,000 deaths. Florida yesterday reported 7,650 new COVID-19 cases per day.

Meanwhile, the cruise industry’s restart push back to November also means that Nassau Cruise Port’s developer/operator will not realise the forecasts presented to investors during its recently-successful $150m bond issue. The company had predicted an October resumption, with some 635,000 passenger arrivals to come in during the 2020 fourth quarter - an expectation that will now not be met.

Michael Maura, Nassau Cruise Port’s chief executive, told Tribune Business that the missed forecast is “not a material impact on the business” as it continued to focus its short-term attention on exploiting the COVID-19 pandemic to accelerate the $284m redevelopment of Prince George Wharf.

However, he acknowledged that the cruise industry’s delayed return was inflicting real hardship on the industries, businesses and employees that rely upon it for their livelihoods, and that “the pain is very hard”.

“I was walking downtown yesterday to a meeting with the Ministry of Tourism, and it was surreal,” Mr Maura told this newspaper. “The only way to describe it is it’s almost as you were in or watching a movie. To walk downtown, a place that has centuries of history, centuries of stories and experiences, and that today it’s just almost abandoned.

“These are very difficult times. It’s very real, and the pain is very hard. People don’t have months to wait, and I know every day is a very difficult day, but the only thing we can do in our company is work as fast as we can to be ready and create a new waterfront experience that helps promote demand for Nassau and puts us in a position other regional destinations will have a difficult time competing with.”

As for Nassau Cruise Port’s missed projections, Mr Maura responded: “This pandemic is full of twists and turns and surprises..... It’s [October] not a material impact on the business. Our principal focus is construction and development, and we continue to be contacted on a routine basis by all the cruise lines for November, December and 2021 on berthing availability.”

Asked whether he was concerned that the cruise ship industry may not resume sailing until well into 2021, he added: “You use the word ‘concern’. I’m not going down that road.... 2020 continues to be a tough year for the cruise industry but I do believe 2021, in the very early stages, you will see a healthy return of cruise traffic.

“All I can tell you is we keep getting phone calls from the cruise lines. I can only base that on the cruise lines still contacting us and asking for berth availability. There’s a chance they will return this year, and we have to prepare for that. We also have the reality of the COVID-19 pandemic, and the global circumstances are out of our control. We are ready for that day the cruise lines return.”

The Downtown Nassau Partnership’s Mr Klonaris, meanwhile, said he had always anticipated it would take longer for the cruise lines to meet the CDC’s COVID-19 health and safety protocols due to the nature of its business and previous evidence showing ships were a breeding ground for the virus.

With the timing and strength of the sector’s return uncertain, Mr Klonaris said the likes of Bay Street retailers, restaurants and bars, plus tour operators; excursion and attraction providers; taxi drivers; straw vendors; hair braiders and others that rely on the cruise ships should not brace for “a big rush” as passenger confidence will likely take some time to recover.

As for the consequences for Bahamian businesses, he added: “It’s a very difficult stretch between now and November; very difficult for this country. We’ve just got to hold tight... It gets worse the more prolonged the cruise industry’s restart actually is.

“It’s not just the uncertainty but the ability for so many small businesses to survive. The longer this wait goes on, the more bankruptcies and unemployment we will have. The city of Nassau is not going to see any activity until that happens, and the more they keep pushing it out, the more difficult it becomes for small businesses to survive.

“At what point do they throw in the towel and say: ‘We cannot survive’? Most businesses should be budgeting their operational expenses to survive between now and December. That’s the main thing they should be looking at if they want to survive and not having normal income coming in between now and December. Hopefully they may get something in December, but at least budget for that time.”