How Lockdowns Devastated the Cruise Industry

– March 25, 2021 Reading Time: 4 minutes

“I never thought I would be standing in a food line for hours. Just the degradation of it. You say to yourself, ‘Wow. I am really at this point.’” So said James Cox, a 50-year old porter in the cruise industry, to the Wall Street Journal’s Julie Byrowicz and Ted Mann.

Cox used to earn $27/hour, but since the lockdowns began last year his ability to earn in his chosen profession has been taken from him. As Byrowicz and Mann explain it, the “cruise industry is waiting anxiously for Washington’s go-ahead to sail again.” Lest readers forget, national politicians assigned to themselves the right to decide which industries would continue to operate as the coronavirus spread, and which ones wouldn’t. The cruise industry didn’t get the nod, hence Cox waiting in food lines.

Interesting and tragic about all of this is that Byrowicz and Mann were reporting from Port Canaveral, FL, and more specifically from “Terminal Three, a cavernous $135 million structure built for Carnival Cruises.” The previous detail is hopefully a reminder of how prosperous the cruise industry was before politicians panicked. In other words, the best and brightest of the cruise industry had plainly developed remarkable skills when it came to attracting customers, and having done so, meeting the needs of those same customers.

The above truth is crucially relevant to what happened to the cruise industry. The leading lights never got a chance to adjust. Despite knowing the needs of a huge customer base intimately, they never had the right to pivot at a time when a virus was rapidly spreading.

Instead, the political class that gave us the Post Office, Amtrak, Social Security and other would-be bankrupt entities absent the taxpayer decided on its own that cruise operators should not be allowed to adjust to a seemingly new corona-reality. How tragic.

Indeed, how tragic for all business sectors that a particularly prosperous one wasn’t allowed to show how it would meet customer needs during a notably fraught time. Information born of commercial leaps is so crucial to economic progress, businesses were and are starved for market-created information about the post-corona future, but some of the best never had the chance to serve their customers, and as a consequence we’re all a little or a lot more blind about what’s ahead. Politicians know what’s best for us, it seems.

To which some skeptics might reply that regardless of the federal government’s sick actions, the cruise industry was already dead. They’ll say that broad public fear about exposure to a rapidly-spreading virus was the cause of the industry’s death, so don’t blame politicians. Sorry, but such a response is insufficient, and really kind of mindless.

We know this from the aforementioned report penned by Byrowicz and Mann. As they note, “the cruise industry is waiting anxiously” for the right to operate again. They wouldn’t be “waiting anxiously” to get back to serving customers if they felt they would have no customers, or if they felt they couldn’t adjust to new realities. Rather explicit in their desire to get their ships back in the business of ferrying passengers around the world is a belief that if allowed to serve customers, they would be serving customers.

How would they? The speculation here is that just as grocery stores and other retailers were “allowed” to remain in business so long as they limited the number of customers inside, so could cruise lines have operated in limited fashion. Important about the previous assertion is that they wouldn’t need laws or other government force to space out passengers. Precisely because the customer of 2020 was different from the customer of 2019, cruise companies would have adjusted capacity based on their intimate knowledge of their customer base.

In which case some cruise lines might have charged a great deal more (have readers seen the nosebleed rates charged by luxury hotels and resorts in the past year?) to fewer customers, some would have instituted “surge pricing” amid periods of high customer demand a la Uber, some would have limited capacity by requiring daily testing for the virus, and still others might have instituted strict age limits with an eye on protecting the vulnerable from crowds altogether.

About what cruise lines might have done, it should be made clear that these are mere speculations from an outsider possessing a tiny fraction of the customer-service knowledge that the various cruise companies possess. One guesses that if allowed to strut their stuff, Carnival, Crystal, Seabourn, and others would have thoroughly blown us away with their ability to effectively operate in pro-customer and pro-health fashion at a time when so many potential passengers were nervous.

Alas, they once again were not allowed to. Drunk-with-power politicians and experts lacking any kind of customer-service knowledge decided for them that they would not be allowed to try.

Which brings us back to people like James Cox, and the kinds of cruise operators he’s historically worked for. In split second fashion they had their dignity taken from them. Cox wasn’t expecting to stand in food lines, or presumably take unemployment, but the lockdowns were rapid in their destruction.

Just the same, businesses owned by prideful people likely never imagined government shutting them down, only for that same government to become the sole source of finance around for all-too-many businesses. It’s a long or short way of saying that while PPP has kept some businesses afloat, how awful. This wasn’t what they wanted; government help. Absent the use of force against them, they wouldn’t have needed it. There’s a descriptive word for what’s been done to businesses and workers, but it won’t be said here. Readers can guess.

Hopefully readers will also keep in mind how quickly politicians can wreck things, and how quickly their destruction robs people and businesses of dignity. Right now, the formerly soaring cruise industry is once again “waiting anxiously for Washington’s go-ahead to sail again.” Please think about that. And how wrong it is.

Reprinted from RealClearMarkets