"We're not in Kansas anymore," said Alice to the Cheshire Cat. Or something like that.
I feel, in some ways, as if I have gone down the rabbit hole that Lewis Carroll described in "Alice in Wonderland." Things look somehow familiar, but they're not the same as a year ago. It may be a long time before they are again.
Bookings for Q1 2021 are recovering, and we find ourselves on par with bookings for the same time period in 2016 and about 23% down from Q1 2019. But the differences between now and then are substantial.
I have shared for almost a year with anyone who would listen that cruises from U.S. ports would not restart until August 2021 (even that seems a bit optimistic) and that the vacationing public would not resume travel unless and until there was a proven vaccine, Covid was not an issue and we were at the end of the second full season of the illness. It did not and does not matter when the cruise lines can or want to resume cruising. It has everything to do with the traveling public feeling safe.
And right now, a rapidly growing percentage of those who haven't taken a vacation for a year or more are champing at the bit to go somewhere, as long as it is perceived as a safe venue that can be reached safely. It is a mixed blessing in some ways for parts of the oceangoing cruise industry.
Indeed, we see interest in ocean cruises, but mainly well into 2022 and 2023. That is a result of passengers booking cruises that have been subsequently canceled, for some as many as four times. Simply put, they are weary of the disappointment caused by anticipation and then cancellation and have elected to book further out or look at other types of vacations.
It would seem that some portion of the ocean cruise market may have to weather a full vacation cycle for those seeking alternative vacations. Fortunately, the pent-up demand is very strong. Those who would have cruised in 2020 and 2021 are now layered on top of those who would normally be taking their biennial or triennial ocean cruise. As a result, we may see more demand than supply for the first few months after cruises resume.
So where are all these people who were formerly cruise passengers going on vacation? They're taking tours, going to island resorts and booking river cruises. Domestic land package interest is quite strong as are Great Lakes and coastal waterways cruises.
The good news is that 2022 and 2023 bookings are strong. The other news is that the "pipeline" was drained, and commission income will likely not ramp up to independent survival levels until Q1 2022. A combination of streamlining any and all operating costs, a PPP loan, taxable grants from our state, PPP 2.0 and other no-interest loans makes for an exciting ride on the business roller coaster we boarded a year ago.
The encouraging part of all this is that the cost savings and spending cuts we made will carry forward. It means we will reach pre-Covid profitability well before bookings and sales recover to 2019 levels. The result is that we should easily be 17% more profitable on those 2019 business levels.
It's like this: If you're reading this, you're a survivor and soon to be a thriver. The exhortation has been to hang on until this is past. We're almost there. Don't give up now.