The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Downtown Nassau Partnership's (DNP) co-chair yesterday said the cruise lines' decision not to resume sailing until September 15 is "a very serious blow" that may mean many small businesses "will not survive".

Charles Klonaris said cruise tourism-reliant businesses now face having to hold on for an additional two to three months with minimal to zero income after the industry's global trade body, Cruise Lines International Association (CLIA), announced on Friday that sailings from US ports have been postponed until mid-September at earliest.

Pointing that many Bahamian firms lack "the deep pockets" required to ride out such an extended closure, Mr Klonaris said The Bahamas was likely "to see very little tourist traffic" until the end of 2020 across both the cruise and stopover (hotel-based) segments.

He predicted that a true tourism recovery may only take root over the Christmas/New Year period, and suggested landlords as well as commercial tenants in the downtown Nassau and Bay Street areas will come under increasing financial pressure over the second half of 2020 due to the slow rebound from the COVID-19 pandemic.

Mr Klonaris said many firms had been hoping to re-open on July 1, which is when The Bahamas will re-open its borders to international travel, but retailers, tour operators, excursion providers, taxi drivers, restaurants, hair braiders, straw vendors and others reliant on the cruise industry for their livelihoods had now seen these hopes dashed for the time being.

"I hope that's realistic," he added of the cruise industry's revised September 15 date. "Being locked down for an additional three months, that's serious. I cannot say off-hand what the consequences will be, but I do believe some of them - especially the small and start-up businesses - will not survive, whether downtown or elsewhere. Location does not mean that much.

"I think it's a very serious blow to the tourism industry, and especially to the tour operators. I think they're going to face the brunt of this extended shutdown of the cruise industry. It's going to be very difficult for them to continue.

"It's going to be tough for small businesses to continue up until September. I don't believe a lot of them will return to open shop. The problem is a lot of local businesses don't have deep pockets and, although they were given a lot of generous discounts by the property owners, you still have a negative cash flow. It's a serious problem; a serious problem for the revenues of the country."

Mr Klonaris spoke out after the CLIA, which represents all of the major cruise lines operating in The Bahamas, such as Carnival, Royal Caribbean and Norwegian, said the industry had voluntarily decided to suspend sailing from US ports until September 15 to give itself extra time to work with the US Centres for Disease Control and Prevention (CDC) on developing and implementing all necessary COVID-19 health protocols.

"Due to the ongoing situation within the US related to COVID-19, CLIA member cruise lines have decided to voluntarily extend the period of suspended passenger operations," the CLIA said. "The current 'No Sail' order issued by the CDC will expire on 24 July, and although we had hoped that cruise activity could resume as soon as possible after that date, it is increasingly clear that more time will be needed to resolve barriers to resumption in the US.

“Although we are confident that future cruises will be healthy and safe, and will fully reflect the latest protective measures, we also feel that it is appropriate to err on the side of caution to help ensure the best interests of our passengers and crew members. We have therefore decided to further extend our suspension of operations from US ports until 15 September. The additional time will also allow us to consult with the CDC on measures that will be appropriate for the eventual resumption of cruise operations.

“This voluntary suspension applies to all CLIA members to which the 'No Sail' order applied (vessels with capacity to carry 250 persons or more). CLIA member cruise lines will continually evaluate the evolving situation and make a determination as to whether a further extension is necessary.”

Given that all cruise ships sailing in Bahamian waters depart from US ports, this means at least a minimum of three months without any cruise business. Travel industry publications suggest Royal Caribbean is currently planning to resume sailing to The Bahamas from the US on September 18, while Carnival, Norwegian and Disney have all pushed their restarts into early October 2020.

The cruise industry's moves came just days after Dionisio D'Aguilar, minister of tourism and aviation, warned during his contribution to the Budget debate that its planned restart dates were "very fluffy" and "very vague". He added: "On Monday, I had a one-in-one conversation with Arnold Donald, the president and chief executive of the Carnival Corporation......my second such one-on-one with him.

"He indicated that the cruise industry has not yet set a date for its reopening as it is still in negotiations with the CDC in the United States. They are all trying to work out the necessary health protocols that must be in place before during and after a cruise.

"The dates that seem to have some traction for an opening of the cruise industry are, at the earliest, sometime in late August or early September and, at the latest, late November, early December. Very fluffy, Mr Speaker, very vague but we have to wait until the cruise companies and the CDC work it out.......which, of course, is not good news for all those businesses, especially in the downtown area, that rely on the cruise industry for their bread and butter."

The CLIA announcement also indicates that Nassau Cruise Port Ltd, operator of Prince George Wharf, is likely to be correct in its prediction that The Bahamas will not see a resumption of cruise industry traffic until September 2020 at the earliest.

It is projecting passenger numbers will fall by 61.4 percent in 2020, dropping by 2.34m year-over-year as a result of the COVID-19 pandemic - falling from 3.81 in 2019 to 1.47m.

That near-two-thirds decline includes the 835,000 passengers who arrived in Nassau between New Year’s Day and the start of the economic lockdown on March 16, meaning that some 635,000 cruise arrivals are forecast to come during a final quarter that includes the Thanksgiving and Christmas holidays.