FAU Hospitality Expert: Pent-Up Demand Could Buoy Cruise Lines in 2021

By paul owers | 12/21/2020

The hospitality and tourism industry will lead Florida out of the coronavirus pandemic starting in 2021, but a full recovery likely will take years, says an industry expert within Florida Atlantic University’s College of Business.

The Centers for Disease Control and Prevention could relax its guidelines on cruising, whose pent-up demand is higher than most other industry segments, once about 20 million COVID-19 vaccines have been distributed, according to Peter Ricci, Ed.D, director of FAU’s Hospitality and Tourism Management program.

The cruise industry has the highest guest satisfaction ratings among any area of the hospitality and tourism industry, and the highest repeat percentage among any sector, he explained.

Ricci said major cruise lines likely will have full occupancy during their initial cruises, with demand heavy through 2023 and beyond. But expect activities and excursions to accommodate social distancing, and don’t count on those midnight buffets.

“The risk takers are ready to sail and are just awaiting approval,” Ricci said.

But he isn’t as optimistic about other industry segments, including theme parks, hotels and restaurants.

In 2021 and beyond, theme parks will struggle to reach prior attendance levels as global travelers remain cautious about overcrowding. Parades and fireworks displays, the decades-long mainstay for many attractions and theme parks, will have to be revisited. Outdoor seating with sufficient spacing between visitors isn’t a feasible plan, Ricci said.

“Theme parks and national parks will benefit from the perception that you can’t get COVID-19 while outdoors, but that’s just not true,” Ricci said. “Still, theme parks have the ability to respond faster than other industry segments because of the perception that the outdoor environment is safer.”

Ricci offers more 2021 predictions for Florida and the nation:

  • Business travel to other states and convention cities will take years to rebound. Working professionals are now accustomed to hybrid or virtual meetings, and companies have severely limited travel budgets.
  • With travel curtailed, hotels face a difficult 24 months at least, with average daily rates (ADRs) and occupancy levels near all-time lows. As a result, a wave of mergers, foreclosures and acquisitions is likely. Hotels will rely heavily on e-commerce, revenue management and digital marketing and social media professionals, who will become the sought-after hires of 2021 and 2022.
  • Restaurant growth in Florida will not occur until at least 2025. Many smaller restaurants won’t make it because they can’t afford the extra costs associates with COVID-19. Restaurants that do stay in business will struggle to find workers because safety concerns, higher stress levels and new demands placed on procedures and processes all will combine to make it a less-desirable career.

“Once the vaccine is widely circulated and people feel safer, the pent-up demand for travel will occur,” Ricci said. “Airlines, theme parks, cruise lines and hotels will all operate with discounts to entice travelers back in the early stages of this ‘freedom,’ but they will quickly move rates higher as soon as it’s justifiable.”