DISSERTATION

UNIVERSITY OF AEGEAN DEPARTMENT OF SHIPPING, TRADE AND TRANSPORT

FINANCING ON THE THREE BIGGEST CRUISE COMPANIES

KOLLAROU ELENI A.M.:2212016063

TABLE OF CONTENTS

• Chapter 1 : Introduction-History of …………………………1 • Chapter 2 : Companies General information ………………………………2 • Royal • Carnival Corporation & plc • Holdings • Chapter 3 : Introduction to financing in the cruising industry………8 • Chapter 4 : Royal Caribbean Cruises Ltd Financing……………………12 • Chapter 5 : Carnival Corporation & plc Financing……………………13 • Chapter 6 : Norwegian Cruise Line Holdings Financing………………15 • Chapter 7 : The Coronavirus impact……………………………………………16 • Conclusion…………………………………………………………………………………17 • Bibliography…………………………………………………………………………18

INTRODUCTION

This introduction describes the rationale for and the scope of a study to examine the financing of the three most developed cruise companies, as of today, Royal Caribbean, Norwegian Cruise Line and Carnival Corporation & plc. Most of the cruise companies have gained their clienteles trust and have a prominent place at the cruise industry. The majority of them were founded in the second half of the 20th century, and specifically for cruising, some other were founded over 100 years ago as cargo shipping lines. After many failures and mergers in the 1990s , many companies that were used as company brands, within the big corporations came to rise through the constant support of their customers and the loyalty that they provided. Due to the constant changes in the industry, ship owners are always on the hunt in order to keep their vessels updated, by renaming, renovating or even selling them from time to time .The main purpose of a cruise company in general, is to provide to their customers leisure travel, cruise tours, and entertainment and many more amenities, in order to differ from their competitors. According to the quality and the price of every trip there is a classification of the lines. There are four classifications, the cheapest, the budget, the luxury and the all-inclusive brands. There is a wide range of special activities to every vessel, but also off board like many different land tours, custom made to every place.Due to the increased popularity of cruises during the years there is a huge variety of activities to choose from. Some of these amenities include dance clubs, water parks, casinos, great restaurants, gym, theater and many more. There always something for everyone, despite the age or the ethnicity, just because cruise companies have all different kinds of activities and use many formulas just to get everything right. Due to the high demand and continuous growth of the clientele of the cruise lines, there has been a huge increase of the cruise ships the past twenty years. This is why the cruise companies try to find but also invent many new ways to fund their companies, with the goal of the maximum revenue.

1 HISTORY OF THE CRUISE SHIP

Until the 19th century the main purpose of the ships was the transportation of goods from one place to another .The first ship to ever be identified as a cruise ship was Francesco I. Francesco I was built in 1831, having the flag of the Kingdom of the two Sicilies. It’s first trip was in 1833, stopping in Taormina, Catania, Syracuse, , Corfu, Patras, Delphi, Zante, Athens Smyrna and Constantinople, sailing from Naples. The cruise offered some great amenities as dancing floors, guided tours of most of the destinations and many parties. The first company to ever introduce a trip as a form of cruising was P&O in 1844. Their main advertisement was sea tours of Gibraltar, Malta and Athens. It sailed from Southampton, England this trip was a first of its kind, that’s why P&O is called the forerunner of the modern cruise holidays we know today. Also, in the 19th century, in Europe due to political tensions, they were many people who wanted to flee from Europe to the USA, which ended up in an increase of the transatlantic crossings by ship. This way many companies took notice and started invest in biggest ships, with the sole purpose of passenger transportation. In the 1960s, with the rapid development of air transportations, cruise companies had to find a way to rise to the occasion, as the jet liners were more efficient. To remold their high profile, cruise lines opened their doors to the lower class, with the motive of getting more people on board. Since 1995, many smaller companies rose, creating a constant competition, to which shipping company will take on the largest vessel in the sea.

COMPANIES INFORMATION

ROYAL CARIBBEAN CRUISES

Royal Caribbean Cruises is a $4 billion company that is based in , . As of today Royal Caribbean is controlling five brands and a total of 42 ships, making it the second largest cruise line in the market. Despite the fact that they have their headquarters in Miami, their company has succeeded in expanding their business all

2 over the world by landing cruises that reach pretty much every existing port out there .During the first years after its establishment, Royal Caribbean’s growth was favored by the general financial situation of the blooming economy after the war. Later, while the industry was recovering from the consequences of the Cold War, the rapid technological evolution came to play a vital role in the cruising industry’s resurgence. The military market created during the Vietnam War and the recession that followed as a result, led the company to differentiate its priorities and objectives, benefitting the private sector.

Using the strategy of innovation and the increasingly lavish offerings, they have managed to have a net income over $1.8 billion for the year of 2019.Royal Caribbean, as one of the leading companies at its field, owns five cruise brands and a big percentage of ownership to others. Despite the fact that the each try to pursue a different market, all of the monthly financial statements are are reported together. Its brand has its own marketing and assets in order to approach more customers, these brands are:

Royal Caribbean International

This cruise line was established in 1968 in Norway and it is under ’s name since 1997. Royal Caribbean has eight classes of ships :

- Empress class : this class has a single ship built in 1990, originally named Nordic Empress, but now renamed as . - Sovereign class : this class also has one ship, named . - Vision class: consists of four ships, , , and . - Voyager class: has five ships, , , , and . - Radiance class: is composed of four ships, , , and . - Freedom class: has a total of three ships, Freedom of the Seas, and . - Oasis class: comprised of four ships, , , and . - Quantum class: constituted of four ships , , , and .

3 Royal Caribbean International has also ordered six new ships, which will be all added to the fleet by the end of 2025.

Celebrity Cruises

As the rest of Royal Caribbean’s subsidiaries, has also its headquarters in Miami, Florida. Originally founded in 1988, by the -based Chardris Group, Celebrity Cruises falls in the premium class of cruises. By being inserted in this category, Celebrity Cruises has some of the amenities of the more luxurious cruises while retaining some mass features like their low-cost facilities that could make experience look and feel even more luxurious. Celebrity’s signature logo is an ‘X’, which symbolizes the letter ‘chi’, meaning the first letter of Chandri’s name. Celebrity has four classes of ships, Millennium class, Solstice class, Edge class and Expedition vessels, with a total of fourteen ships.

-Millennium class : , , , .

- Solstice class: , , , and .

- Edge class: and .

- Expedition vessels : Celebrity Xpedition, and .

Some of Celebrity Cruises future fleet includes , which will be delivered by Fall of 2021 and two more ships that will be ready by Fall 2024.

Azamara

Azamara Club Cruises is quite known for their offers of cruise itineraries ,ranging from 3 up to 21 nights, that serves the up-market segment of the North American, the United Kingdom, as well as the Australian markets.

4 CARNIVAL CORPORATION & PLC

Carnival Corporation &plc is currently the most successful and prominent American cruise line .Founded in 1972 by Ted Arison, an Israeli immigrant who after serving in World War II. Arison took on the opportunity to run American International Travel Service(AITS),a travel agency ,with his schoolmate Meshulam Riklis. Later on they decided to create Carnival Cruise as a subsidiary of AITS. In 1974 Arison succeeded in buying Rikli’s stakes in Carnival making him the sole owner of the company. Carnival took on many challenges over the years but rose to the occasion, as in 2003 Carnival controlled more than 43 percent of the $11 billion cruise market. In 2005 the results were even more impressive the revenues were as high as $8,7 billion. Currently, the company’s portfolio includes multiple brands : Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises(Australia), Costa Cruises, AIDA Cruises, P&O Cruises(UK) and Cunard. In addition, Carnival Corporation also operates Holland America Princess Alaska Tours, the biggest tour company in Alaska and the Canadian Yukon . As a whole these subsidiary branches constitute the world’s largest cruise company with over 100 ships in fleet. As of 2019 Carnival has succeeded in raising a revenue of $20.8 billion. They offer cruises all year long to the Caribbean, but they also offer some seasonal options to places like Mexico, Europe, Canada, Alaska and more.

COMPANY’S BRANDS

Carnival Cruise Line

Leading the Carnival Corporation empire, Carnival Cruises Line is one of the most popular cruise lines consisting of 27 ships. In 2018, Carnival Cruise Line was voted "Best Ocean Cruise Line" in USA Today's 10 Best Readers' Choice Awards. Also, Carnival Cruise Line was named "America's Most Trusted Cruise Line" by Reader's Digest for the fourth consecutive year.

Princess Cruises

Founded in 1965, Princess Cruises has 19 ships operating in more than 350 ports around the world. Princess Cruises has won ‘Best Cruise Itineraries’ a whole of 11 times by the magazine Recommended.

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Holland American Line

Consisting of 14 ships, Holland America Lines has been operating for 145 years in over 100 countries around the globe. Holland America Line was was chosen as the top pick for Alaskan Cruises in the 2019 AFAR Travelers’ Choice Awards, which are voted on by AFAR readers. Another achievement of Holland America Line, is winning the favorite cruise line for sailings to Alaska in Cruise Critics’ 2019 Cruisers’ Choice Destinations Awards.

Seabourn

Counting 5 ships in total, Seabourn is operating since 1988. Seabourn has accumulated multiple awards throughout the years one being ‘Best Small-Ship Cruise Line’ by Travel+Leisure and Conde Nast Traveler.Seabourn is currently available in more than 400 destinations around the world, including Europe, Asia, Australia and more.

Cunard

Founded in 1840 and having a total of 3 ships, Cunard has been one of the most popular luxury cruise lines. Cunard is also renowned due to the fact that it exclusively offers scheduled transatlantic service between New York and London on a regular basis. Cunard has also won, among other awards, the one ‘Best Large Ship Cruise Line in British Isles & Western Europe’ by Cruise Critic in 2019 Cruisers’ Choice Destination Awards.

AIDA

Aida cruises was first established in 1996 and has 13 ships. For many years, AIDA has been leading the German market and has won "Best Ocean Cruise Line" in USA Today's 10 Best Readers' Choice Awards.

P&O Cruises (UK and Australia)

P&O Cruises is operating in both UK and Australia alike and has achieved to be the top choice for each country. P&O Cruises in the UK has a total of 7 ships, but on the

6 other hand P&O Australia has 4. P&O has been voted ‘Best Large Ships Cruise Line’ and ‘Best Family Cruise Line’ by British Travel Awards 2019.

NORWEGIAN CRUISE LINE HOLDINGS

Norwegian Cruise Line Holdings is the third largest cruise line company, followed by previously mentioned Carnival Corporation & plc and Royal Caribbean Cruises Ltd. Founded in 2011, NCLH is a holding organization that is domiciled in and situated in the United States. At that time, Norwegian Cruise Line was owned by a consortium of Getting Hong Kong, Apollo Management and TPG Capital .Following the consummation of the IPO in 2013 and its introduction on the NASDAQ ( Nasdaq Stock Market ) , Norwegian Cruise Line and NCLH underwent a rearrangement that gave them a full ownership of Norwegian Cruise Line. NCLH has complete ownership of three auxiliary journey lines : Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

Norwegian Cruise Lines

Widely known as Norwegian, Norwegian Cruise Line was founded in 1966 by Ted Arison and Knut Kloster. As of 2018, Norwegian has managed to dominate 8,7% of the cruise market by passengers in 2018. NCL currently has a total of 17 cruise ships, with an additional 6 on order.

Oceania Cruises

Also a subsidiary of NCLH, Oceania Cruises was founded in 2002 and it is based in Florida and has three classes of ships. First, there is the Regatta class, which consists of four ships built between 1998-2000. Then there is the Oceania class having two ships, with a capacity of 1.250 passengers. Finally, Allura class which is estimated to have two ships by the end of 2025.

7 Regent Seven Seas Cruises

With its formal name Radisson Seven Seas Cruises, Regent Seven Seas has made a name of itself with its luxurious cruises. RSSC was established in 1992 ans has managed to own nine ships. Currently it has 5 ships but has ordered another one, which is estimated to arrive late 2023.

AWARDS

Norwegian has managed to win many awards throughout the years, some of the latest ones are: Europe’s Leading Cruise Line(2007-2019), Caribbean’s Leading Cruise Line(2013-2019) , World’s Leading Cruise Line(2016-2017) and World’s Leading Large Ship Cruise Line(2012-2017).

FINANCING IN GENERAL

In our days the global market is daily faced with a constant uncertainty about the future. With the consistent changes in the market and the permanent pressure from their market competitors, companies are always in search of new ways to fund themselves. Most businesses need some type of funding, in order to cover some short-term but also some long-term expenses, which cannot always be fulfilled with the in time being revenue of the company. Funding , is the process of financing business activities, making purchases, but also investments. In the case of the cruise companies, every single year cruise lines are eager to buy many new big and luxurious cruise ships. In order for the companies to be able to afford such purchases they need some kind of funding, as it is very difficult to get this type of money solely from the revenue of the company. Currently there is no company that can afford by itself the construction or even purchase of a new cruise ship, as they are the most expensive ships to build, with the cost reaching up to $1.3 billion.

8 METHODS OF FINANCING

PRIVATE FUNDS

OWN FUNDS

Own funds are a very sure and stable source of funding, as there is no kind of obligation to get them repaid. Private funds consist of the equity provided by the owner of the company or private investors, most of the times with the repercussion of percentage of the shares held from the business.

PRIVATE INVESTMENT

A private investment is the purchase of a specific capital asset that will produce some kind of profit and is going to be high in value. Private investments in turn, they do not involve third party members, instead the investment is arranged by family members or trusted high net worth individuals.

BANKS FINANCING

MORTGAGE BACKED LOAN

Essentially, a mortgage is loan that a company can use in order to buy ships, land or any other property. It is a term loan, that is provided by a bank, and if the loan that needs to be taken is too large, then the company combine mortgage loans from multiple banks. When a company invests in a MBS, it has the right to get the value of a heap of mortgages, including monthly payments and also the repayment of the principal.

CORPORATE LOAN

Corporate loan, or business loan , is the loan that is given specifically in a company to meet their day-to-day expenses, for funding or expanding etc. The corporate loan is secured against the company’s balance sheet, which portrays the company’s assets, the owner’s net worth, etc. The financial statement of the company is comprised of , the balance sheet , the income statement and the cash flow . They are two

9 categories of corporate loans, the first one being bilateral loans and the second one syndicated loans. The biggest difference between the two of them is that syndicated loans have a big number of lenders, whereas bilateral has only one.

PRIVATE PLACEMENT

A private placement is the sale of shares or bonds, to investment institutions or private investors that have been previously selected by the company. Some companies choose private placement as an alternative to public offering, which will be mentioned below, in order to raise funds. In this type of agreement there are few regulatory requirements, as the sale doesn’t have to be registered with the SEC ( US Securities and Exchange Commission ).

CAPITAL MARKETS

PUBLIC OFFERING

Public offering is the sale of the equity-shares to the public, so the company can raise funds. If the future buyers exceed the number of 35 people, is indeed a public offering, and therefore needs registration statements from the authorities needed. I In this type of financing, new shares are sold to raise additional cash for the company. It may also be a secondary offering, where the existing shareholders decide to cash in by selling part of their holdings.

BOND ISSUE

Bond issue is a dept instrument that is issued by the government agencies to raise money. The bond issuer is the borrower, in this case the company, and the bondholder is the lender. The bond issuer, is obliged to pay a certain amount of money each year until the dept reaches its maturity date. They are seven main kinds of bonds : municipal bonds, foreign bonds, treasury bonds, mortgage backed bonds, US government bonds, investment-grade corporate bonds and high-yield corporate bonds.

SPECIAL PURPOSE VEHICLES

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SPECIAL PURPOSE COMPANY OR SPAC

The purpose of a special purpose company, or ‘black check companies’, is to help companies to develop, by raising capital through an initial public offering. Special purpose companies have been around for many years, but in recent years there have been more exposed, making them more known for what they are doing. The shares can be only sold by companies that are part of the stock exchange. In 2019 they have managed to raise a record amount of initial public offerings, making them more famous to bigger investors. The money that the SPACs make from the IPOs are secured in an interest- bearing trust account, and they cannot be touched, unless the SPAC has to pay an investor or they need to complete an acquisition.

LIMITED PARTNERSHIP

A limited partnership, is a subcategory of an investment partnership, were they are used as a vehicle for the investment in many sectors as real estate. Also known as LP, is usually owned by a limited amount of partners, and have also a limited amount of investors, that do not make any operational decisions or carry any personal liability for any amount of company dept.

SECURITIZATION

Securitization is the process of binding a number of future cash flows into a single security. One of the biggest advantages of securitization, is that it distributes the risk of the loans widely and, due to the fact that the package can be traded, investors are not obliged to hold it to maturity. A phrase that has been widely connected with the term securitization is, ‘securitization food chain’ known by the film ‘Inside job’, a popular movie describing the 2008 financial crisis, analyzes to process of turning illiquid assets into a form, making them suitable for sale to investors.

11 FINANCING IN ROYAL CARIBBEAN CRUISES LTD.

Royal Caribbean, as well as many other cruise companies, earns their main revenue from their ticket sales. Other ways are also onboard revenue, which includes extra drinks, food and other amenities the passengers may buy, sponsorships, etc. To try to affect positively the EPS ( Earnings per share), to managers try to step up their game on the marketing sector of the company every single year. The constant investigation and research to what the customer truly wants, makes it easier for the company to understand what the customer is willing to pay for the service that they provide. Another way RCL tries to approach the customers is through their employees. Nor the managers or the higher executives, have any interaction with the customers, that’s why they count on their employees to do so. This way they know the dos and donts and the likings of every customer making their sales go up. This goes to show how committed Royal is to reach its revenue limit and their growth maturity.

TICKET SALES

Royal Caribbean’s main source of revenue comes straight from their ticket sales. In 2017 the total revenue from their ticket sales was $8.778 billion. In 2018 there was a 8.16% increase in the revenue, making the sales $9.49 billion , a pretty big increase from the previous year. The year of 2019, the numbers improved even more making a total of $10.951 billion a 15.34% increase from 2018. Approaching the year of 2020,up until the 30th of June, the revenue was also pretty high, talking about $7.913 billion . After that, for the quarter ending of 30th June 2020, there was a drop, $0.176 billion, a 93.74% decline year-over-year. Coming up to the year of 2021, the CFO of Royal Caribbean said on a conference call that more than 60% of their bookings are new bookings, whereas the rest of 40% are the ones that were cancelled back in spring. Also, as far as the shares concerned, back in March their price was $19.25 per share but as of the month of August, they have reached the price of $57, which goes to show that the cruise industry is back on track. The highest point of the shares the year was in January, with the price of $135.32 per share.

SHIPS SOLD

For years Royal Caribbean has being following the strategy of selling their ships to smaller companies or scrapyards, so that they can buy new ships themselves and have some backup money for any upgrades or in times of need. According to an

12 article, on the online blog ‘ Cruising isn’t just for old people ‘ , Royal Caribbean is planning on selling at least seven of its ships some point in the year of 2020. The first being the ‘Grandeur of The Seas’, which RCL was planning on selling to Pullmantur, back instead sold it on a scrapyard. Another two ships, from the Vision Class Ships, have been sold to Marella, a smaller cruise company, who renamed them to and Marella Discovery Two and rumor has it that they will not be only ones sold from this class. Last but not least, there has been some talk about ‘Enchantment of The Seas’ being sold this year, as a similar ship was seen on a website. The author of the article personally contacted Royal Caribbean about it, and they said no, but no company would say otherwise because they wouldn’t sell any itineraries. In addition to the ships named before, ‘Rhapsody of the Seas’ was also seen to the website YachtWorld.com selling for $150 million, according to the site ‘Cruzely’.

BANK LOANS

A big thing in the cruise industry are bank loans, which the companies take for multiple reasons, such as the construction or purchase of a new one. Such as many other cruise line Royal Caribbean has taken plenty of bank loans, with the big profit in the longterm. An example of such action was back in 2018, were RCL signed with STX for the delivery of four ships by 2018. The financial support was secured by COFACE.

FINANCING IN CARNIVAL CORPORATION & PLC

Carnival is the second biggest cruise company globally, with a fleet over 100 vessels and holding over 48% of the market share in the industry. Carnival is the only company that is successfully included in both New York and London Stock Exchanges, but this doesn’t grant its success, as Carnival has also to find finance

13 sources. Carnival has many ways of financing, due to their many years of experience, some of them are :

PUBLIC OFFERING

In 2020, Carnival Corporation made an agreement with US Securities and Exchange Commission, in which Carnival offers their common stock to the public. This action will be available through their trained Sales agents, having a total contribution of up to $1 billion, in specific time periods, through an ‘at-the-market’, an equity offering program. Some of the sale agents under the ATM Offering are, Golden Sachs & Co.LLC, J.P. Morgan Securities LLC and 13 more.

SALE OF SHIPS

As many other companies, Carnival Corp also sells their older and not so efficient ships from time to time. In 2020, Carnival had to let go 11 of their ships, and more will follow by the end of 2020. This decision was taken, evaluated by their senior management, considering their efficiency and the future cash flows that they can provide.

LONG-TERM DEPT AND SHORT-TERM BORROWINGS

In 2014, Carnival has taken approximately a total of $8.5 billion in long-term dept. The biggest part of it belongs to export credit facilities with $4.638 billion, next is publicity-traded notes with $2.219 billion, next general bank loans $1.914 billion, next private placement notes with $310 million and finally other activities with $27million. Also in 2014, their short-term borrowing are summing up to $666 million. One part of it is the euro bank loans, with $13 million and US dollar- denominated commercial paper with $653 million.

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FINANCING IN NORWEGIAN CRUISE LINE HOLDINGS

Norwegian Cruise Line Holdings Ltd. is the third largest cruise line in the world following previously mentioned, Royal Caribbean and Carnival Corporations plc. In the past NCL used lead arrangers like DNB, HSBC and Deutsche Schiffsbank to finance the building of new vessels in accordance with OECD rules concerning ship finance. For example in 2010 NCL arranged to build two new vessels with a contract price of approximately 1.2 billion US $ . These two vessels would be built in Germany at the famous Meyer Werft shipyard , which is the most up-to-date shipyard building highly innovative cruise vessels for their worldwide customers . This year , being an extremely difficult year for the cruising industry , NCL raised more than 2 Billion US $ in a mix of stock and debt in order to ensure its survival during the pandemic with possibly no revenue at all! The company announced that it looked like it would be impossible to get through this year if this funding was not arranged. This fresh new capital would offer liquidity to the company and would give enough cash to the company in order to get through these 12 months of voyage suspensions.

BANK LOANS

The most common way of financing in NCL is the process of taking long –term loans. An example of that was in 2014, where Norwegian took part into the € 666 million Seahawk 1 term loan, but also the € 666 million Seahawk 2 term loan, in order to pay the 80% of the price, of two Breakaway Plus Class Ships. Another example of such action was when NCL and Star Cruises came together, to make a deal with KfW IPEX- Bank, with the goal of financing a new cruise ship in Germany. KfW IPEX-Bank did its part and with the help of Crédit Agricole Corporate, Investment Bank and branch of DNB Bank ASA, they provided them with € 600 million.

TICKET

Like most of the cruise companies, NCL earns most of its profits from their ticket sales. In 2016, they had a revenue of $4.87 billion according to statistics. Due to the coronavirus ,Norwegian had reportedly a total revenue of $16.93 million for the

15 second quarter of the year of 2020, which means a huge downhill from last year’s revenue of $1.67 billion during the same period.

Undoubtedly the pandemic has brought the cruising industry to a standstill worldwide. With this financing the company issued $400 million in fresh stock and about $1.43 billion in two debt offerings. This will enable the company to avoid seeking bankruptcy protection. In addition with all of the cruises being cancelled , clients seem to prefer the refund to a future credit with the company. As it is impossible to predict when the ships will be able to sail again , the company had to cut capital expenditure by $ 515 million and also had to furlough 20% of its shoreside staff. These are definitely difficult measures to take but in times when your life is at stake it is equally important to utilise the financing means ,that you used in the past to expand your company by buying or building new ships , in order to survive and make it to the next day.

THE IMPACT OF CORONAVIRUS

Coronavirus has inevitably affected all sorts of businesses, including the cruise market. There are many versions to what will happen to the cruise industry in the next couple of years. The Conversation, a online magazine, published in April 14th of 2020 an article about the affect of coronavirus to the cruise world, named “This could be the end of the line for cruise ships”. The author of the article, Freya Higgins- Desbiolles, reports the current state of the cruise world. She supports that coronavirus has inhabited many cruise ships, making them very dangerous as the passengers can get infected very easily. That can be the end of the cruise industry as there are many more things going wrong like the water pollution and overtourism in places like Barcelona, Venice, Dubrovnik and Reykjavik. Another case of Covid-19 repressing a cruise company is the case of Carnival Corporation & plc. In this instance, Gwyn Topham, the author of this specific article, stated that Carnival has lost over $4 billion over the span of three months. The usual revenue for the months of March and May were $4.8 billion, whereas this year the revenue dropped at $700 million. He also refers to the huge problem of their cruise ships not being able to

16 reach the dock, because of the severe measurements many governments take in order to protect their country. Lastly, its being noted that Carnival as it is unsure about the future of the cruise industry has decided to sell six of their ships, in order to come through with this pandemic. To sum up on a bright note, Fran Golden has published an article on the Bloomberg, referring to the future of cruises. In this article, he analyzes the changes that will be done in order for the passengers to have a safe and comfortable trip. One big change is going to be the destinations, which are intended on being pretty close to the home port. The huge variety of activities will be minimized according to the health instruction provided by the government. For example the buffets, which are a huge part of a cruise, will be out and also there will be limited-capacity shore excursions. Now as far as it concerns the cleaning and safety of the passengers, all of them will be tested before boarding in the ship and additional measures will be taken. Some companies are the considering on buying electrostatic and UV disinfection systems that will help crews sanitize public spaces hourly, to have the best results possible. Genting Cruise Lines, has announced that they will install fever screening and sanitizing fogging protocols, this way entire rooms will be sprayed with disinfecting mists. Unfortunately, the swaying at the economy of Covid-19 is unavoidable, but with some smart but also innovative ideas the future of the cruise industry seems bright.

CONCLUSION

These days, you can pretty much go whenever, anywhere you want in the world on a cruise. The ships have become more innovative, so that even the largest of ships can successfully travel to most ports, without restrictions. That is a result of the high level of tries, from the companies, in order to always experiment and shout for the best possible result. In an ideal world, cruise companies would always have enough money coming from their sales and other activities, to pay for daily operations or expenses. A business has many calls on its cash on a day to day basis, even the biggest of companies are having trouble coming through with their liabilities, and need some kind of funding to cover some short-term, but also some long-term expenses. As we all know the cruise industry is really active for some months, but the rest of the year they need to make ends, in order to get through the slower times. Financing, is where cruise companies ‘seek rescue’, so that they can come through with their responsibilities. There are multiple ways to do so, by private

17 funds, banks financing, capital markets and special purpose vehicles, and every company has to select the one that is more suitable for their daily needs.

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18 https://www.miamiherald.com/news/business/tourism-cruises/article244769022.html https://theconversation.com/this-could-be-the-end-of-the-line-for-cruise-ships-135937 https://www.theguardian.com/business/2020/jun/18/carnival-sell-cruise-ships-bookings-coronavirus- pandemic-holiday https://www.bloomberg.com/news/articles/2020-05-22/cruises-are-coming-back-here-s-what-they- ll-look-like-after-covid https://www.macrotrends.net/stocks/charts/RCL/royal-caribbean-cruises/net-income https://www.macrotrends.net/stocks/charts/NCLH/norwegian-cruise-line-holdings/revenue https://en.wikipedia.org/wiki/List_of_largest_cruise_ships#In_service https://www.cruise.co.uk/bulletin/cruising-then-and-now-the-history-of-cruising-will-surprise-you/

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