An analysis of the post-COVID-19 cruise industry: Could this be a new possibility for the luxury yacht sector in the Caribbean?

Abstract

PurposeThe aim of this paper is to examine the post-pandemic prospects for the luxury yacht industry in the coming decade in contrast to those for mega cruise ships.Design/methodology/approachThe paper employed a qualitative approach via an examination of industry analysis and discussion with industry experts in tourism, cruising and luxury yachting.FindingsBased on industry analysis and discussion with key stakeholders, the finding is that the luxury yacht industry responded well to its market from the onset of the pandemic, and will continue on this path in both luxury and sporting yacht categories. To regain customer support after the long period of travel restrictions, cruise lines will have to significantly reduce their prices in order to stimulate demand. This, coupled with approximately 40% reductions in load capacity is a blow to the industry. Hence, this calls for the industry to commit itself to the present safety protocols, which are an added cost to their operations. In contrast, the luxury yacht industry is presented with a golden opportunity as a result of these constraints as it can stimulate revenue through charters and rentals.Practical implicationsThere was never anticipation of a global pandemic that would bring tourism operations to a total halt. The question is, what recovery strategies have been employed by the small island states that have invested millions of US dollars over the last two decades in expanding or developing new cruise ports? Given the historical perspective for Errol Flynn Marina in Port Antonio, Jamaica, the Port Authority of Jamaica can reposition the Marina to take advantage of the new opportunity that has been created for the yacht industry by coronavirus disease 2019 (COVID-19).Social implicationsIt is likely that more Caribbean nationals will be employed on luxury yachts as compared with the less than 5% of Caribbean nationals employed on cruise ships prior to the pandemic.Originality/valueThe economies of most Caribbean Islands and many other small island developing states (SIDSs) are heavily dependent on tourism; specifically cruise tourism during the cruise season. Some of these countries continue to anticipate a quick recovery for the cruise industry. This anticipation may not yield an immediate result because of the protocols that are needed in response to the pandemic. This paper shows that in the mid to long-term, the returns from significant investment in port development must be realized and the luxury yacht industry presents one such opportunity. This paper is helpful because the present outlook for cruising is not good, and so a new approach and strategy must be put in place to develop new products.