Analysis of the COVID-19 Pandemic’s Impact on the Cruise Shipping Network in the Asian-Australasian Region

As travel restrictions were imposed, and fear about the impact of the COVID-19 pandemic spread, the cruise sector’s operations almost came to a halt. For example, CCL demonstrated hundreds of confirmed cases onboard nearly half the fleets of the cruise ships. In response to the pandemic, CCL (2020) followed travel restrictions and disease prevention policies. The cruise line denied boarding to all customers aged 70 years or above unless they had a medical certificate to prove they were fit to sail. Customers were also asked about their medical history in the past two months and their history of chronic or severe medical conditions. Travellers with such medical conditions were not allowed to board. CCL followed the social distancing policy as ships were not operating up to their full capacities (Hines 2020). CCL also increased hygiene standards by increasing sanitation, disinfection and cleaning measures. These measures included frequent sanitisation of common areas, deep cleaning and disinfection process at night, increasing the temperature in washers and dryers for enhanced disinfection of laundered goods, hand-washing sinks or hand sanitiser available at the entrance to common rooms, and surfaces and fixtures thoroughly cleaned up to twice daily. In addition, CCL distributed and updated travellers about COVID-19 and sailings through its webpage with details of ship cleaning standards, healthy cruising tips, additional tips for healthy cruising and guidelines for enhancing well-being and dealing with the situation.

Due to the continued evolution of the coronavirus, CCL suspended many of its itineraries. The cruise line offered two options to customers whose bookings were cancelled. The first option was to change the sailing dates. Customers would get the same package as their original bookings and an extra US$900 onboard for next bookings with at least six nights, or US$450 for cruises with fewer than six nights. The second option was to refund fully those who did not want to sail. CCL planned to resume sailing in August 2020, starting with fewer ships and fewer passengers. The operational capacity was kept at a low level for the rest of 2020. But this came at a large financial loss as the cruise line had to seek funding from the stock market to sustain its operations (Sachs et al. 2020). CCL decided to downsize the fleet by selling off 13 ships (Hines 2020). On the other hand, the company tried to attract customers by lowering the prices (Sigalos 2020).

Similar to CCL, RCI also carried out various measures to respond to the pandemic in 2020. It denied boarding to guests who had severe and chronic medical conditions. This restriction also applied to those aged 70 years or above unless they provided certification of their health condition by qualified physicians. The cruise line also took additional measures to keep guests healthy by avoiding impacted countries, enhancing boarding screening, increasing sanitation at cruise terminals and having more health safeguards onboard. RCI also had rigorous medical protocols to help unwell passengers, such as complimentary medical consultations for guests with fever or flu-like symptoms and medical isolation (RCI 2020).

RCI offered different options for passengers whose bookings were cancelled. To retain passengers, the company provided a future cruise credit with a 125% extra fare discount for next bookings. The lift and shift option was offered to passengers who wanted to move their existing bookings to 2021 sailings. A full refund option was offered to passengers who did not want to sail. In addition, passengers who purchased refundable flights or accommodations through the cruise line would automatically get a refund within 45 days after cancellation.

RCI teamed up with NCL to develop and improve safety standards called ‘Healthy Sail Panel’ before resuming operations amid the pandemic. The panel comprised experts in public health, biosecurity, epidemiology, hospitality and maritime operations. It provided a robust and comprehensive set of protocols and recommendations covering many possible scenarios and minimising risk. The panel was reviewed and approved by the CDC before it was adopted.

So far, the situation is that most cruise lines still suspend some itineraries and may restart depending on travel restrictions, policies and new health measures in each country (Thakkar 2021). In the first quarter of 2021, cruise lines serviced passengers with a small number of voyages and increased sailings to more than 2,000 voyages in the second quarter onwards (Ecruising 2021). Some voyages had been modified to better suit the situation by removing some ports and changing sailing routes.

The suspension of cruise operations has had a significant impact on the global economy. According to CLIA (2021), in 2019, the industry contributed US$ 154.5 billion worldwide by supporting 1,166,000 jobs with US$50.53 billion in wages and providing opportunities to shore-based businesses in destination regions.

RCI revealed that a suspension of its sailings in Asia decreased its earnings in 2020 by US$0.55–US$0.65 per share (Telegraph 2020). Cruise lines were expected to pay refunds for cancellation and compensation fees to passengers whose cruises were cancelled. They also bore operational costs such as port fees and charges due to quarantine measurements, and maintenance and operational costs as ships were forced to remain in international waters or turned away from ports. The outbreak also resulted in a reduction of cruise lines’ values on the stock market. CCL’s share price dropped by nearly 60%, while RCI and NCL dropped more than 70% (AP News 2020). At the same time, their market shares plunged by an average of 35% (Wastnage 2020).

Travel demand for transport services as well as cruise shipping demand dropped substantially during the pandemic outbreak because of travel restrictions (Holland et al. 2021; Hörcher et al. 2021). However, booking demand for cruise shipping appeared to be strong after the pandemic outbreak, with the number of bookings increasing from late 2021 through 2023 (TWR 2021). Almost 60% of cruise bookings for 2021 were new bookings, while the rest of their reservations were re-bookings from passengers whose cruises were cancelled in 2020 (Buglar 2020).

Various network measures are adopted to study changes in the cruise shipping network before and after the pandemic outbreak, including network density, average path length, diameter, average clustering coefficient and degree distribution. The different measures will be further described, allowing us to conclude changes in the structure, topology and characteristics of the network.

The network measures mentioned above helps to reveal the overall characteristics of a network as a whole. However, they cannot be used to understand its nodes, which requires the use of local metrics that are specific to individual nodes. These include degree, betweenness, closeness and eigenvector centralities.

To study the impact of the pandemic on the cruise shipping network, the above network measures are used to compare the cruise network in Asia and Australasia before and after the pandemic outbreak. The itinerary data for cruising in 2018 and 2021 were collected from the Australian cruise shipping agent travel (https://www.ecruising.travel/). The dataset covers the network of 139 cruise ports in 20 countries in Asia and Australia and 400 total voyages over the entire year, serviced by 12 international cruise lines. Note that the dataset in 2021 was collected in 2020 during the COVID-pandemic, and any cancellations and schedule changes in itineraries were not considered and updated. This study defined ports as stops on itineraries by cruise ships, e.g. terminals, ports, beaches, islands and bays. The Asian and Australasian regions were chosen not only because they are one of the most dynamic and emerging markets but also the largest proportion of global cruise passengers (20%) come from these two regions (Campbell 2020). Network analysis is conducted using R statistical software.

This section presents the results of an analysis of the COVID-19’s impact on the Asian-Australasian cruise shipping network. The impact is analysed as the changes to the network before and after the pandemic using cruise shipping data collected for the two years, 2018 and 2021. Figure 1 shows 471 links between ports in 2018. Figure 2 shows that the (proposed) number of links has increased 491 links for 2021, although 13 ports were not connected to others, i.e., Hamilton Island, Kuching, Lianyungang, Los Angeles, Palopo, Qingdao, San Diego, San Francisco, Sanya, Ternate, Tokushima, Yantai and Zhujiajian. A large number of links indicates that cruise lines changed and increased their sailing routes. The reason for the removal of these ports from sailings could be because cruise lines rescheduled their itineraries to avoid ports in areas with a large number of infected people and low demand for cruise shipping. In contrast, other ports benefitted from this change.

Figure 1. Cruise shipping network before the outbreak of the COVID-19 pandemic in 2018. COVID-19, coronavirus disease 2019.

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Figure 2. Cruise shipping network in 2021.

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Table 2 summarises the changes in the key network measures of the Asian-Australasian cruise shipping network before and after the pandemic outbreak. These measures demonstrate significant changes in the network properties between the two periods. Overall, network density increased from 0.0246 in 2018 to 0.0256 in 2021, indicating a chance of a port connected to another or network connectivity increased from 2.46% to 2.56%. It is worth noting that the 2021 sailing data represented a higher density of the network. This might be because cruise lines increased the number of routes in the network and removed ports with low connectivity.

Average path length and diameter reflect the efficiency of the cruise shipping network in terms of the convenience for cruise travellers to reach any ports in the network. Before the pandemic, the network’s average path length was 5.910, higher than that in 2021, when the average was 4.666. This implies that cruise ships had a higher ability to reach ports. The shorter average path length of the network after the pandemic is due to more new links/sailings added to the network. The average number of ports per voyage of itineraries was ten ports in 2018 but nine ports in 2021. The shortest path between the two most distant ports or diameter of the network was 67 in 2018 and 27 in 2021, confirming that the network was tighter post-pandemic, with a lower diameter. After the pandemic, the relatively smaller average path length and diameter imply that cruise ships reach ports earlier with shorter distances.

The clustering coefficient reflects the intra-connectivity among ports reflected by the probability of meeting linked neighbours of ports within the network. The network’s average clustering coefficient increased from 0.255 in 2018 to 0.348 in 2021. This indicates that the probability of meeting connected neighbours around a port increased to 34.0% after the pandemic. That is, a port had stronger connectivity with its neighbours (excluding the isolated ports).

The decrease in the average degree of the cruise network from 7.209 in 2018 to 7.065 in 2021 indicates a lower connectivity level of ports after the pandemic outbreak. Ports had a lower chance of being connected to each other. The average betweenness centrality of the network substantially decreased from 710.06 in 2018 to 389.70 in 2021. This indicates the lower accessibility of the network. The lower average betweenness centrality in 2021 also implies that the network had a stronger hub-and-spoke structure.

The decrease in the network’s average closeness centrality from 0.19 to 0.00 over the period indicates the network’s connectivity has become more decentralised. However, the average eigenvector centrality of the network increased from 0.04 in 2018 to 0.05 in 2021, indicating the tendency for ports to connect to influential ports.

Figure 3 shows degree distributions that reflect how the connections are distributed among possible pairs of ports. As demonstrated by the graphs, degree distributions of the network of the two periods followed the power law. Most ports had a low connectivity level because of the small number of ports connected to them. In contrast, a few important ports had a large number of connections to others in the network. These indicate that the network had a scale-free property before and after the pandemic. It is worth noting that, while the network structure changed with a larger number of links in 2021, its degree distribution remained largely the same as in 2018. However, in 2021, ports with degrees between 10 and 20 were accounted for a higher proportion than those in 2018.

Figure 3. Degree distributions of cruise ports in 2018 and 2021.

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Degree centrality reflects the port’s importance in terms of its connectivity within the network or as a hub port. As will be shown below Singapore, Shanghai, Hong Kong, Benoa, Ho Chi Minh and Kobe were the most important ports in 2018. Each played a hub role dominating connections in the network. However, in 2021, Yokohama, Keelung and Sydney became new hub ports replacing Ho Chi Minh and Kobe. Singapore was ranked top, with the highest degree centrality before and after the pandemic outbreak, indicating that it remains the most influential port in the network. Before the pandemic, the network had 64 ports with degree 2, while 31 ports had degrees 1 and 2 after the pandemic. This is the result of the heavy reliance of cruise lines on hub ports for health safety reasons.

In terms of the spatial distribution of degree centrality, ports with a high connectivity level were in fewer countries after the pandemic because itineraries were rescheduled to avoid visiting regions with many infected cases. Singapore, Indonesia, Japan, Hong Kong and China were the cruise shipping hubs across both periods, reflecting the fact that these countries were popular for cruise shipping both pre-and post-pandemic. Vietnam’s role as a hub was diminished, while Taiwan and Australia became more important countries post-pandemic. In 2018, a few ports had more than 30 degrees and seven ports with 21–30 degrees (Figure 1). In 2021, only one port had a degree higher than 30, and a few ports had degrees between 21–30 (Figure 2). Most ports with 1–10 degrees were located across many countries in the Asian-Australasian region in both periods.

Regarding the betweenness centrality of ports, Hong Kong had the highest betweenness centrality in 2018, followed by Sydney, Melbourne, Shanghai and Singapore. In 2021, Benoa became the port with the highest betweenness centrality, followed by Hong Kong, Brisbane, Singapore and Fremantle, while Sydney, Melbourne and Shanghai were no longer the top five hubs in 2021. This indicates that some ports with high accessibility were replaced by others after the pandemic since cruise lines wanted to change intermediary ports between pairs of other cruise ports which are not directly connected for cruise shipping. Table 3 shows the betweenness centrality distributions of cruise ports in the cruise shipping network. In 2018, most ports had betweenness centrality lower than 1,000, while few possessed values higher than 5,000. Likewise, in 2021, most ports had betweenness centrality lower than 1,000. Before the pandemic, 12.95% of ports were peripheral ports with a betweenness centrality of zero (i.e., they had no shortest path between them and another port). However, in 2021 this increased to 20.86%, confirming a stronger hub-and-structure of the network.

In both periods, Indonesia, Hong Kong, Australia and Singapore had ports with the highest betweenness centrality. In 2018, many ports had the betweenness centrality higher than 2000. These were Hong Kong, Australia, China, Singapore, Indonesia, New Zealand, French Polynesia, USA, Vietnam and Japan, as shown in Figure 4a. This situation was not the case in 2021 when only six ports in Indonesia, Hong Kong, Australia, Singapore and South Korea had betweenness centrality values higher than 2000, as illustrated in Figure 4b. This result indicates that fewer counties were able to maintain their central role in the network after the pandemic outbreak. This trend is a good representation of the globalisation process of cruise shipping. Changes in betweenness centrality values follow a similar geographic pattern with more drastic gaps among ports. This clearly shows the strong effects of hub strategies at the six ports and the emergence of load centres in Indonesia, Hong Kong, Australia, Singapore and South Korea in 2021. This indicates the emergence of economics and differentiation of ports after the pandemic according to local and global changes in cruise routes and port selection.

Figure 4. Spatial distributions of betweenness centrality of cruise ports.

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Regarding the ports’ closeness centrality, closeness centrality distributions of the network for two periods of interest are shown in Figure 5. As illustrated by the graph, in 2018, most ports had the closeness centrality between 0.16–0.25 accounted for 79.14% of ports, and there were no ports that had the closeness centrality value of zero. In 2021, all ports had the closeness centrality of zero, indicating that ports were not connected to all other ports in the network after the pandemic. Before the pandemic, Melbourne had the highest closeness centrality, followed by Hong Kong, Shanghai, Sydney, Brisbane and Shimizu, reflecting that they had the highest reachability to all other ports in the network. However, the ports no longer reached all other ports in 2021, reflected by their closeness centrality value of zero.

Figure 5. Closeness centrality distributions of cruise ports in 2018 and 2021.

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Eigenvector centrality represents the influence of a port in the network in terms of other influential ports connected to it. Therefore, this measure can be used as an indicator of its development potential. Table 4 shows that 68 ports in 2018 had the eigenvector centrality value of zero, which decreased to 35 ports in 2021. Additionally, ports with eigenvector centrality between 0.01–0.20 in 2021 were accounted for higher proportions than those in 2018. In contrast, in 2021, ports with an eigenvector centrality of over 20 were accounted for a lower proportion compared to 2018. These indicate that ports became more influential by being connected to other important ports. To this end, cruise ports evolved toward being the development potential ports after the pandemic. Moreover, the most development potential ports with the highest eigenvector centrality in 2018 were replaced by others in 2021. Shanghai, Keelung, Nagasaki, Busan and Kobe were ports with development potential in 2018. However, development potential ports in 2021 were Hong Kong, Keelung, Kobe, Kochi and Osaka, as shown in Table 5.

To sum up, the structure and properties of the Asian-Australasian cruise shipping network changed as a result of the pandemic’s impact. The network had higher connectivity with a larger number of links and was more efficient. It also had a stronger hub-and-spoke structure compared to the network before the pandemic. The roles of ports were also changed to respond to the pandemic and comply with cruise lines’ operations. Before the pandemic outbreak, Shanghai was the most important port in the network, with the highest values of all centrality measures. However, it only played a hub role with the highest degree in 2021. Hong Kong and Singapore still played the role of hubs and intermediary ports. Likewise, Brisbane remained a transition port in the south with high accessibility. In 2021, there were not ports with high reachability that had close relationships with all ports in the network. Benoa became a more important port. The roles of Kobe, Sydney and Ho Chi Minh were diminished, while that of Fremantle, Keelung, Kochi and Osaka were improved.

The findings mentioned above reflect that cruise lines have changed their operations to respond to the pandemic. Cruise lines increased sailing routes to accommodate the growing demand after the pandemic, leading to the cruise network had a larger number of links. Cruise lines rescheduled itineraries to remove unpopular ports in areas with a high infection rate, while they increased sailings to regions with lower infection rates. Cruise lines also designed shorter itineraries consisting of ports mostly in the same areas to avoid bringing the virus across locations and increase the confidence of passengers being safe for their cruising.

Cruise lines tried to find new popular ports with a lower infection rate. At the same time, they removed some sailing routes that visit the hub ports with a high infection rate. This has led to lower connectivity of those ports. For example, cruise lines removed some sailing routes and added some to Singapore, as shown in Table 6.

In itinerary design, cruise lines considered the infection rate as one of the other factors for a cruise port selection. For instance, cruise lines designed itineraries that consists of ports in areas with no or low infection rates.

To provide the service during the COVID-19 pandemic, cruise lines had to sail with less than 70% of a ship’s capacity and service shorter itineraries with fewer ports of call. Additionally, they tried to set new popular destinations for cruise shipping by designing new cruise routes that have not been in itineraries to visit the target destinations. For example, in 2021, Hong Kong was designed to connected ports that had not been connected in 2018, as shown in the following:

Some ports had much more connections than in 2018 since cruise lines designed itineraries to avoid ports in areas with high infection rates by increasing cruise routes to ports with lower infection rates and famous for cruising. Table 7 shows 27 and 23 ports with the number of cruise routes increased and decreased by more than 50% in 2021. Cruise lines added seven cruise routes to Hakodate and Tanjung Priok, leading to the ports had the number of connections increased by 350% from 2018. Likewise, six cruise routes were added to Broome. Interestingly, cruise lines increased the number of routes to ports where were not the hubs of the cruise network. This situation implies that cruise lines wanted to create new hub ports for cruise shipping. Besides 13 ports removed from itineraries, cruise lines significantly reduced the number of cruise routes to Jeju Island, Klong Toey, Bandar Seri Begawan, Probolinggo, Tianjin, Celukan Bawang, Rabaul, Port Douglas, Kaohsiung and Nha Trang.