International Travel and Covid-19

With the development and gradual deployment of effective vaccines, travelers, the hospitality industry and investors are thinking about what should be required before a restart for widespread international travel.  Any attempt to look forward must, at least for now, recognize that border crossing requirements vary widely for most countries.  Travelers should also realize that it may be difficult to get back into the U.S. after an overseas visit.

Hopefully, over the next few months potential investors and prospective travelers will be seeing increasing clarity.  The incentives are big.  Many would be travelers are clearly suffering from acute cases of cabin fever and the hospitality industry continues to suffer from the burdens of unemployment and lost revenues.

It appears that the travel industry, particularly airlines and cruise operators, are taking a lead in developing a workable model for bringing prospective passengers back on board.  Regulators may be in less of a hurry.  For example, the Centers for Disease Control (CDC) issued a no-sail order in March 2020, and after extending the order, the agency said in October that it would take “a phased approach to resuming cruise ship passenger operation in U.S. waters.”  More than five months later, the CDC is still pondering.

The cruise industry is not sitting on its hands.  There are some sailings currently operating successfully, with a number of restrictions, in Europe and Southeast Asia.  More important, several cruise lines have announced seven-night, Caribbean voyages with embarkation and disembarkation outside the U.S., mainly in the Bahamas, beginning June.  This is not a panacea.  Initially, all passengers will have to be vaccinated, port calls are limited, and passengers will have to adhere to whatever restrictions are in place regarding their return to the U.S.

To the extent that these Caribbean voyages prove to be successful, the CDC may be encouraged to finally provide a protocol for reopening U.S. ports to the cruise industry.  The hospitality industry, travelers and investors are ready.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®