00:00If you boarded a cruise ship in Dubai this week, you may have woken up to missile alerts.
00:04If you're due to fly to the Middle East for a cruise in the next few weeks,
00:08I'm afraid to say your holiday is looking like it's cancelled.
00:11US and Israeli strikes on Iran have triggered missile retaliation across the Gulf region.
00:17Airspace closures, shelter-in-place warnings, military deployments, and now cruise cancellations.
00:22As of today, multiple cruise ships are in the Gulf, with passengers from
00:26all over the world, including the United Kingdom. MyShip 5, carrying large numbers of German passengers, is in the region.
00:33Celestial Journey is alongside in Doha. Celestial Discovery is in Dubai.
00:37That is Celestial's entire fleet. But overnight, the situation has escalated further.
00:43MSC Yorubia has officially cancelled its 1st of March sailing from Doha. I'm not really surprised, are you?
00:49The ship is now docked at Cruise Terminal 3 at the port of Rashid in Dubai, and will remain there
00:54until further notice.
00:55In a statement to guests, MSC said,
00:58Due to the current situation and the airspace closure in the Middle East region,
01:02we are currently monitoring and reviewing all of our operations in the region.
01:05Our focus is the safety and security of our guests and crew,
01:09therefore MSC Yorubia crew sailing from Doha today, 1st of March, is cancelled,
01:13and the ship will remain in the port of Dubai.
01:16Airspace closures across the region have made flights to and from Doha effectively impossible.
01:21Passengers who have disembarked are remaining in Dubai while MSC evaluates next steps.
01:26TUI Cruises has now cancelled multiple sailings.
01:29When the conflict escalated,
01:31Mine Shift 4 was in Abu Dhabi and Mine Shift 5 was in Doha.
01:34Passengers were initially instructed to shelter on board
01:37and remain indoors and away from windows.
01:39In a statement, TUI said,
01:41We are monitoring the situation very closely and are in constant contact with the relevant authorities
01:45as well as the security departments of our parent companies TUI AG and Royal Caribbean Group.
01:51But as of the afternoon of February 28th,
01:54Mine Shift 4's planned March 1st and March 2nd departures,
01:57both seven-night sailings, have been cancelled.
02:00Mine Shift 5's February 28th sailing was also cancelled yesterday.
02:04Celestial is currently taking a wait-and-see approach.
02:07Celestial Journey is remaining in Doha.
02:09Celestial Discovery is staying in Dubai for at least 24 hours.
02:13In a public statement, Celestial said,
02:15We are closely monitoring the evolving situation in the Middle East
02:18in coordination with the relevant authorities.
02:21Both ships will remain in port for 24 hours while the situation is assessed.
02:26If Celestial think that their 2nd of March sailing is departing tomorrow,
02:30they're delusional.
02:31It isn't happening.
02:32But I do feel for Celestial and the smaller lines.
02:35A company like Celestial has invested heavily in building its Middle East programme.
02:40They have spent millions on marketing, partnerships, advertising campaigns,
02:45repositioning ships, securing port agreements.
02:48Competing in a region dominated by global giants like MSC is not cheap.
02:53When governments like the UK issue shelter-in-place orders and airspace closes overnight,
02:58that investment evaporates in an instant.
03:01For a small cruise operator, sudden instability like this is not just an inconvenience.
03:06It can put enormous pressure on cash flow, bookings and confidence.
03:10The big three conglomerates can absorb regional shocks.
03:14Smaller lines fill them much more acutely.
03:17I think Celestial could really struggle because of this.
03:20Arroyo Cruises, an Arabian cruise brand operating Arroyo Manara from Abu Dhabi, Doha and Dubai,
03:25has not yet confirmed cancellations.
03:28However, the cruise line has warned guests that updates may be imminent,
03:31stating,
03:32The safety of our guests is our absolute priority.
03:35We will keep you informed of any further updates or changes.
03:39Cruise tracking data shows Arroyo Manara currently hunkered down in Dubai
03:43alongside MSC Euribia and Celestial Discovery.
03:46Cruises are being cancelled, ships are holding position, passengers are waiting for updates.
03:50These acts of war will have devastating effects which will hurt the cruise industry.
03:55Whenever there is any global uncertainty, the cruise industry almost certainly suffers.
04:01Cruise ships are floating assets, often worth between $500 million and over $1 billion.
04:06Cruise companies are still carrying huge amounts of debt from the COVID-19 pandemic.
04:11Cruise lines survive COVID by borrowing heavily.
04:14Recovery depends on instability, predictable itineraries and consumer confidence.
04:19The Strait of Hormuz handles roughly 20% of the world's oil supply.
04:23Maritime operators have been advised to avoid the Strait of Hormuz.
04:27Some shipping routes have already been paused.
04:30Any sustained instability will push oil prices further upwards.
04:34Fuel prices are already high because of Ukraine and Trump's last pet project in Venezuela.
04:39Cruise ships burn enormous quantities of fuel.
04:41We're talking like six metres to the gallon here.
04:44Even with hedging strategies, sustained increases in oil prices significantly increase operating costs.
04:50Then there is insurance.
04:52When regions are classified as war risk zones, marine insurers can raise premiums dramatically, sometimes overnight.
04:58That almost certainly has happened over the weekend.
05:01If war risk premiums surge, the economics of an itinerary unravel faster than one of Andrew Mountbatten's alibis.
05:09That is when further cancellations happen.
05:11Cruise lines do not place billion-dollar ships into volatile military situations.
05:16Cruise lines are far more sensible than world leaders these days.
05:19Think about all the cruise ships on world voyages.
05:22All the ships that are due to pass through the Suez Canal in the coming weeks.
05:27Maritime traffic in the region has already slowed as operators are advised to avoid the Strait of Hormuz.
05:32If instability spreads or Suez becomes compromised yet again, ships may be forced to reroute around Africa.
05:39Thousands of extra nautical miles, days added to itineraries, massive fuel costs, port cancellations, flight disruptions for passengers heading home.
05:48One reroute affects the next cruise, and the margins shrink for the cruise lines.
05:53And I've told you before, cruise lines never take those extra costs on the chin.
05:57They pass them on to you.
05:59That's what you're there for.
06:01Fares will climb.
06:02Passengers, even those nowhere near the Middle East, not even booked on a cruise to this region, will be affected.
06:09Geopolitical instability damages cruising, not because cruise ships cannot move, but because every unexpected movement costs them more money.
06:17So what should you do right now?
06:20First, do not panic.
06:21If a region becomes unsafe, cruise lines will cancel or reroute.
06:25You will not be left sailing into danger.
06:27Don't go and cancel anything at the moment.
06:30If you cancel prematurely, out of fear or concern, you will risk losing money unnecessarily.
06:36Second, understand your booking.
06:37Review your terms and conditions.
06:39Know your cancellation rights.
06:41Understand what happens if itineraries change.
06:44Third, build flexibility into your plans.
06:47If you are booking fly cruise arrangements this year, ensure flights have some flexibility.
06:52Avoid tight connections that leave no room for delay.
06:56We are not living in times where you should be booking the cheapest possible fare, which ties your hands.
07:01Fourth, hold off booking any cruise to the Middle East.
07:05We don't know how prolonged this is all going to be, do we?
07:08This whole exercise could cause huge instability in the region where all cruise ships are forced to leave.
07:15The situation in the Middle East is fluid.
07:18The Supreme Leader is confirmed dead, but those who remain are not giving up without a fight.
07:23There is no clarity on what the next steps will be.
07:26And why would there be?
07:27This is another illegal act of war.
07:29But more cancellations are inevitable.
07:31Cruise lines operate on risk assessment and contingency planning.
07:35They do not gamble with safety and with their most valuable assets.
07:39Routes will change and this region could be on pause for a while.
07:43But the industry knows how to navigate uncertainty.
07:46It has done it before.
07:47But for the moment, it really is a waiting game to see what happens next.
07:54The Supreme Leader is a production of the Middle East.
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