This video is made possible by CuriosityStream. Get the CuriosityStream/Nebula bundle deal,
on sale now for $15 a year, to watch our brand new Nebula Original Documentary at CuriosityStream.com/Wendover. In March, 2020, the cruise industry shut down. There are no qualifiers to that sentenceâitâs
not that certain ships from certain companies in certain countries shut down. Itâs that every ship from every company
in every country stopped accepting passengers in March, 2020. Thatâs⌠unprecedented. Never before, in modern times, has there been
such a complete, global shut down of an industry of this size. This isnât like airlines or restaurants
or movie theaters. They couldnât keep operating at a certain
level or with certain precautions or in certain geographiesâevery single cruise ship shut
down. The second that happened, though, time started
ticking. Cruise lines were on the clock with the biggest
challenge they might ever face: they had to survive as organizations with no revenue,
no passengers, and little-to-no government support until it was safe and legal to sail
again. As it turns out, doing nothing, as a company,
is actually quite a lot of work. After ships dropped off their last loads of
passengers, thousands of people remained onboard: the crew. Naturally, management started to wonder what
they should do with them. At first, the answer was nothing. You see, as the shutdown started, much of
the global cruise fleet was in the Caribbean, finishing up the peak season before crossing
the Atlantic for the summer Mediterranean cruise season. As most Caribbean cruises leave from the US,
that meant that the American CDCâs March 14th no-sail order was what officially prevented
them from sailingâeven if in practice most shut down voluntarily. That no-sail order, however, was initially
slated to expire after just thirty days, so most cruise lines decided to leave their ships
staffed and wait it out, under the hope that they could salvage their summer seasons. On April 9th, though, the CDC extended the
order for 100 days, until July 24th, making it very clear that this would not be a short-term
stoppage. In most cases, cruise ships are subject to
the laws of the countries in which theyâre registered, which means that most cruise lines
register their vessels in countries with loose labor laws like Panama, the Bahamas, or Malta. That typically lets them hire from anywhere,
which in practice gives them access to low-wage labor pools from places like Eastern Europe
or the Philippines. Now, cruise ships are, of course, massive,
and correspondently need a massive number of staff to run. The Carnival Panorama, for example, has a
crew size of 1,450 people, and Carnival, its owner, has some 23 ships. That meant that, once they decided to officially
pull the plug in April, 2020, they had some 26,000 staff members from all around the world
who each needed to get home. In the era of pared-back flight schedules,
border closures, and complex testing and quarantine protocols, it soon became very clear that
finding 26,000 flight itineraries for 26,000 stranded crew members would not be a quick
and simple exercise. So, rather than 26,000 itineraries, they cut
it back to just about seven. In late-April, 18 of Carnivalâs 23 ships
started sailing to a spot off the coast of Grand Bahama Island. Then, once together, over a few days in early
May, some 10,000 crew members shuffled between the various ships using tenders. The task entailed more or less grouping the
crew into geographic regionsâsouth-east Asian crew boarded the Carnival Conquest,
south-Asian crew boarded the Ecstasy, eastern-European crew boarded the Magic, and so on and so forth. Once the crew transfer was completed, on May
4th, seven shipsâthe Liberty, Dream, Magic, Breeze, Ecstasy, Conquest, and Gloryâleft. The Carnival Glory had the shortest journey
of them allâtasked with repatriating many of the Caribbean crew-members to their homes. Just five days after departing, it docked
in St Lucia, then the next day in St Vincent & The Grenadines, then St Georgeâs, Barbados,
and so on and so forthâcompleting a multi-week milk-run of the West Indies. Next to complete its mission was the Carnival
Breeze, dropping British crew off in Southampton, while the Carnival Magic made a quick stop
in Gibraltar before arriving in Dubrovnik, Croatia to repatriate much of Carnivalâs
eastern-European crew. Meanwhile, the journeys of the Liberty, Dream,
Conquest, and Ecstasy were just getting started as they each stopped at various South African
ports to re-stock, refuel, and drop off African crew-members. After two weeks of sailing the Indian Ocean,
the Dream and Conquest arrived in the waters off the coast of Denpasar to bring many of
the Indonesian crew home, while the Liberty arrived in Mumbai, India. The Dream then made a quick journey west to
Jakarta to drop off more of its Indonesian crew, just as the Ecstasy made it to Mumbai
as well, carrying even more Indian crew members. Then, as soon as the Conquest met the Dream
in Jakarta, the two sailed together to Manila to drop off a huge number of Philippine staff
members, while the Liberty and Ecstasy sailed south to anchor off the coast of Colombo and
drop off Sri Lankan crew. With that, as June turned into July, this
repatriation mission was complete, with some crew having spent two months sailing from
the Bahamas to get back home. While getting these 26,000 crew members off
their boats and off their payroll was a major concern of management at Carnival once the
long-term nature of the shut-down became clear, attention, among all cruise line management
teams, quickly refocused onto how to actually survive as a business when thereâs no business
to be made. In the third quarter of 2019, each of the
three largest cruise companies made billions in profits. In the same quarter one year later, Carnival
earned $31 million in revenue, Norwegian $6.5 million, and Royal Caribbean managed to earn
-$33 million in revenueâsomething almost unheard of among large companies. So, how you do survive as a company when you
quite literally have no way to make money? Well, cruise lines did have one thing going
for them. Prior to COVID, they were highly, highly profitable. In fact, many often pocketed hundreds of dollars
in profit per passenger. In addition, cruising is a highly cyclical
industry. What that means is that when the overall economy
is good, the cruise business is quite good, while when the overall economy is bad, the
cruise business is quite bad. That's because, when money gets tight for
a person, one of the first things to go is vacation. Therefore, cruise lines are used to weathering
out leaner times, so they traditionally keep quite a lot of money in their war chests. At the end of the third financial quarter
of 2020, by which time the companies had unlocked more liquid assets and passed the initial
shock phase of the shutdown, Norwegian Cruise Line Holdings, the third-largest cruise conglomerate
in the world, had some $2.4 billion in the bank. Meanwhile, the Royal Caribbean Group had about
$3 billion in cash, while the Carnival Group, by far the largest cruise company in the world,
held about $8.2 billion in cash. That was whatâs referred to as their ârunway,â
and the task was to get their burn-rate, how much they spend per day to stay in existence,
to its lowest possible level. In the case of Carnival, if they spent $50
million per day, for example, they would only survive some 164 days without revenue. If they were able to get that down to only
$25 million a day, though, theyâd have 328 days, almost a year, of runway. Once the long-term nature of the shutdown
became clear, furloughing or firing almost all on-ship staff and a sizable chunk of onshore
staff was an easy decision for cruise line management. One of the tougher decisions was what to do
with their key assets: the ships. Unlike people, they couldnât just let them
go. In the case of Carnival, their oldest, smallest,
and cheapest shipâthe Ecstasyâcost some $275 million to build back in 1991. Nowadays, theyâre building $780 million
ships like the Carnival Panorama. Put all together, this means a cruise lineâs
fleet is incredibly valuable, and since the ships werenât carrying passengers around
the world, they had to put them somewhere. However, as it turns out, both the worldâs
cruise ports and the worldâs cruise ships werenât built with a total industry shutdown
in mind. First of all, you canât just turn off a
cruise ship, tie it up, and lock the door behind you. With very little exception, from the moment
a ship enters service to the moment itâs decommissioned, there are people onboard as
these massive machines require constant monitoring and maintenance to stay in working order. In addition, cruise ports were built to suit
the need, and since the early days of the industry, the need has been for ships to stop
every week or so to unload passengers, restock, and load back up. Theyâre designed for the majority of ships
to be at sea which historically was fine, because the majority of ships were always
at sea. Now, however, that means there just isnât
enough space in the worldâs cruise ports for every cruise ship to tie up and wait things
out. In fact, thereâs not even close to enough
space, and most ports charge ships tens of thousands of dollars per day to tie up, so
the vast majority of the worldâs cruise fleet is out at sea⌠floating around. They each now carry an average of about 100
crew membersâa fraction of their normal staffing levelsâperforming the most essential
functionsânavigation, maintenance, engineering, food preparation, medical care, and more. In the case of Carnival, 15 of their 23 ships
are currently anchored off the coast of the Bahamas, and about once a week, one of them
will sail to Miami to pick up food, mail, and other supplies, which they then transfer
between the ships upon return. Most lines are operating with some version
of this floating cluster approach as itâs clearly one of the lowest-cost methods for
storage that keeps ships in an adequate state of readiness for when cruising finally returns. And thatâs the key question right now: when
will it going to be possible for cruising to return? In Summer, 2020, some thought the answer was
then. Particularly in Europe, which had a robust
summer travel season, quite a few smaller cruise ships and even some larger ones brought
passengers back onboard, with precautions. In general, this meant the ships were capacity
capped and passengers had to be tested before boarding, were subject to temperature checks,
were required to wear a mask in communal areas, and could only go ashore on managed excursions. With these and other rules, cruise companies
thought they might have cracked the code of sailing safely and profitably during a pandemic,
but then reality hit. On the MS Roald Amundsenâan expedition cruise
ship that typically carries 500 or so passengers through the Arctic or Antarcticâ62 people
tested positive for COVID after a trip around Svalbard, putting stress on the contact-tracing
system of northern Norway. Elsewhere in Norway, the SeaDream 1 had to
cancel a cruise after a positive COVID test, and then a few months later, the very same
ship left Barbados on the very first cruise in the Caribbean since the start of the pandemic,
which soon had to be cancelled due to nine passengers and crew testing positive. On the other side of the continent, UnCruise
adventures left Juneau in early August on the very first cruise with passengers from
an American port since March, 2020, until a passengerâs test came back positive, forcing
them to return to port, put all passengers under quarantine, and cancel the rest of their
season. This is the reality of cruising during a pandemic. As long as passengers are originating from
a place with rampant community spread, no matter how many precautions are taken, it
doesnât work from a public health perspective, it doesnât work from a business perspective,
it just simply doesnât work. Therefore, for the most part, even in the
cases where governments werenât stopping them, cruise lines stopped trying. Nowadays, however, in Spring, 2021, tens of
millions of COVID vaccines are entering peopleâs arms every day around the world, and a solution
has arisen. Instead of trying to prevent COVID from spreading
on their ships, the cruise lines are simply going to prevent people who could have COVID
from getting on their ships. Many of the major players, including Royal
Caribbean, are requiring all adult passengers to be fully vaccinated before boarding. Even though no vaccine is 100% effective,
having a fully vaccinated ship means that even if someone does board with COVID, this
will not set off a chain reaction of community spread throughout the entire vessel. Given these new policies, cruise lines are
reworking their schedules to center their business on the places where vaccines are
rolling out the fastest. For example, with less than two months notice,
Royal Caribbean announced that it would be sailing from Israel, home of the worldâs
fastest vaccination campaign, for the first time ever with one of the largest cruise ships
in the worldâthe Odyssey of the Seas. In addition, while the summer cruise season
is traditionally centered on the Mediterranean, in 2021, many of the first cruises to restart
will be based out of the Caribbean, in close proximity to the US, which has also had one
of the worldâs fastest vaccination campaigns. Cruise lines have, for the most part, succeeded
with their grand challenge. At the end of 2020, Royal Caribbean, for example,
still had $3.6 billion in the bank, as runway, and had pushed their burn rate down to $270
million a month. That means they can survive without revenue
until at least February 9th, 2022. Norwegian Cruise Line, meanwhile, had enough
to make it until April 25th, 2022, while Carnival had enough to last June 9th, 2022. The cruise lines will be fine. But there is another side to the equation. While cruise lines are typically massive,
global enterprises, they rely on the places they visit⌠they rely on all the small businesses
that operate tours and excursions for passengers at each port of call. Specifically, they rely on places like Ketchikan,
Alaska. Last summer, under strict COVID protocols,
I travelled there with a film crew to document a summer like no otherâa summer where the
1.2 million annual cruise tourists that keep the economy of this small town of 8,000 alive
just didnât show up. Two summers ago, Ketchikan was one of the
most sought after cruise-destinations in the worldâthey would quite literally run out
of space on the docks. Last summer, they were experiencing the most
acute form of economic ruin. The documentary I made, profiling this, is
out now exclusively on Nebula. Itâs the first on-location project weâve
released in almost a year, and I think youâll find it quite interesting. Of course, as any long-time Wendover viewer
knows, the best and cheapest way to get access to Nebula is with the CuriosityStream/Nebula
bundle dealâavailable on sale for $15 a year right now at CuriosityStream.com/Wendover. This gets you access to both Nebula and CuriosityStream,
where you can watch thousands of great non-fiction shows and documentaries, like Chinaâs Last
Little Trainâwhich profiles the last working narrow gauge steam railway in China, connecting
an area without cars, buses, or even roads to the outside world. Of course, these subscriptions are what goes
to fund the great Nebula originals that many of you have come to enjoy, and they help independent
creators like us stay independent. So, get a yearâs worth of education and
entertainment, with access to both CuriosityStream and Nebula, where you can watch our brand
new documentary, for just $15 a year with the current sale at CuriosityStream.com/Wendover.
that's expensive
Super interesting thanks OP
it wasn't that insane
the baked potato was good, and so was this video
Somebody count the number of times he said "quite"
The VO artist pauses...at the weirdest times...when...he speaks.