CruiseHigh-yielding destination amplifies the earnings impact, says RCCL.

Cuba ban hits US cruise lines in the pocket

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Cuba is now off limits for US cruise lines. Photo Credit: GettyImages.
Cruise Lines International Association (CLIA) estimates almost 800,000 passengers worldwide will be affected by the US government's immediate ban on US cruise lines visiting Cuba.

Cruise lines are hurriedly altering their schedules to accommodate the ban.

MSC Cruises is offering Key West in Florida, Costa Maya in Mexico, George Town in the Cayman Island, or Cozumel in Mexico as alternatives.

The cruise line is also giving passengers the option to change ship and itinerary, offering to waive its usual cancellation fees and transfer already paid funds to the new booking.

Royal Caribbean Cruises Ltd. said eliminating Cuba from the itinerary of various sailings would reduce 2019 earnings by US$52 million to US$73 million.

"While the affected sailings impact only 3% of our 2019 capacity, the extremely short notice period for this high-yielding destination amplifies the earnings impact," said RCCL Jason T. Liberty, executive vice president and CFO.

Norwegian's parent company, Norwegian Cruise Line Holdings, issued a statement saying that dropping Cuba would cost 35 cents to 45 cents a share from 2019 earnings - between US$76 million and US$98 million.

NCLH said about 25% of the impacted capacity days were on sailings of Oceania Cruises and Regent Seven Seas Cruises, “the majority of which were Cuba-intensive premium-priced itineraries”.  

NCLH said the costs of pulling Cuba from itineraries include substantial discounts to keep guests on their booked cruise, accommodation of cancellations and changes to reservations, incremental marketing investment to support the compressed sales cycle for modified voyages, and the protection of travel agent commissions.

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