MSC Cruises has cancelled the 23-night journey of MSC Virtuosa from Dubai to Southampton, UK. Pawan Singh / The National
MSC Cruises has cancelled the 23-night journey of MSC Virtuosa from Dubai to Southampton, UK. Pawan Singh / The National
MSC Cruises has cancelled the 23-night journey of MSC Virtuosa from Dubai to Southampton, UK. Pawan Singh / The National
MSC Cruises has cancelled the 23-night journey of MSC Virtuosa from Dubai to Southampton, UK. Pawan Singh / The National

Cruise voyages from the UAE cancelled as Red Sea tensions ramp up


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Major global cruise companies are rerouting or even cancelling voyages through the Red Sea as tensions rise between Yemen's Houthi militants and British and US forces.

Royal Caribbean and MSC Cruises are among those adjusting itineraries to avoid the area, as well as Carnival Corporation, one of the world's biggest cruise operators, which has rerouted at least 12 ships across seven brands.

Swiss-Italian operator MSC Cruises became the first cruise line to cancel its sailings in mid-January amid the conflict, including the 21-night voyage of MSC Opera from Dubai to Genoa, Italy, and a 23-night journey of MSC Virtuosa from Dubai to Southampton, UK.

The critical situation affecting maritime traffic along the Red Sea and the Gulf of Aden is constantly being monitored
Costa Cruises

“The safety of passengers and crew is the number one priority and as there was no viable alternative itinerary, the company has regrettably had to cancel the voyages,” MSC Cruises said in a statement at the time.

The ships sailed empty around Africa en route to Europe, where they will dock until the summer season.

Affected guests are able to transfer to a future journey of a similar duration free of charge, rebook on another cruise with a partial refund or pay extra to cover the difference. Alternatively, they are also being offered full refunds.

Carnival-owned Costa Cruises also recently cancelled a cruise that was set to sail from the UAE to Italy over 19 nights, departing on March 9.

“As you can well understand, the critical situation that is currently affecting the maritime traffic along the Red Sea and the Gulf of Aden is constantly being monitored with the maximum attention,” Costa said in a statement that was sent to guests who had already booked their places on the ship.

“Given recent developments on the security environment and future uncertainties in the area, working in close consultation with global security experts and government authorities, we have made the difficult decision to cancel the cruise that was originally planned.”

Other brands under the Carnival Corporate banner, including Seabourn and Aida Cruises, have cancelled several voyages scheduled for the spring and summer seasons.

This includes Aida cruises set to sail from Dubai to Hamburg, Germany, on March 20 and Abu Dhabi to Hamburg on April 7. The brand's Dubai to Mallorca voyages in April have also been cancelled.

The brand said in a statement that this was the “only responsible option”. It added: “It is important to us to give all guests planning security for their vacation with this early information.”

The cruise line is providing passengers with alternative travel options, according to Cruise Hive, including the opportunity to rebook any voyage in Aida's programme, plus a 10 per cent voucher of their previous travel price.

Seabourn, meanwhile, cancelled several trips, including Seabourn Encore's voyage departing on March 2 from Hong Kong to Dubai. It is now due to end on March 16 in Singapore, rather than on April 3 in the UAE.

Other brands such as Princess Cruises, which also falls under Carnival Corporation, are rerouting ships away from the Red Sea and instead sailing around the Horn of Africa to avoid affected areas.

Princess Cruises' World Cruise, which set sail from Los Angeles on January 18, skipped the Middle East, including the UAE and Asia. The itinerary was revised to include ports of call in Australia, then South Africa and the west coast of Africa, followed by Western Europe and the Mediterranean, before continuing its scheduled Atlantic crossing.

A statement confirmed its forthcoming world cruise on Coral Princess, which is set to depart in April, is being “reworked”.

The itinerary for Coral Princess's April sailing is being 'reworked', according to Princess Cruises. Reuters
The itinerary for Coral Princess's April sailing is being 'reworked', according to Princess Cruises. Reuters

Elsewhere, Silversea cancelled two voyages in January on board Silver Moon, including one from Muscat to Dubai and another from Dubai to Mumbai. It also amended the itinerary for a sailing between Aqaba and Muscat, allowing guests to disembark in Athens.

At the time of writing, only spring sailings are affected, with those scheduled to set off later this year and early next year remaining unaffected.

Dozens of cruises are also still scheduled to dock in Dubai and Abu Dhabi throughout February, according to cruise itinerary platform CruiseDig.

While tens of thousands of passengers are being affected, the impact on cruise operators at a global level is not expected to be significant, Todd Elliott, chief executive of Floridian travel agency Cruise Vacation Outlet, told Reuters last month. “This is a small part of their overall fleet and multiyear itineraries so they will be able to overcome this easily.”

Carnival Corporation said last Tuesday that its annual earnings would take a hit, but that it also experienced an “early and robust” start to the season, with booking volumes hitting an all-time high since November, according to Reuters.

These changes come after a series of attacks by the Iran-backed Houthi militants, who control most of Yemen, on vessels travelling through the Red Sea and the Suez Canal in response to Israel's bombardment of Gaza. This has resulted in repeated US and UK military strikes against the Houthis.

US President Joe Biden said in January that strikes against the Houthis are not deterring the group but that such military actions in Yemen will continue, either unilaterally or with other countries.

The Biden administration has said its operations are aimed at defending the economically vital waterway that sees at least 10 per cent of global trade.

By some calculations, 150 fewer vessels went through the Suez Canal in January compared to the same month last year.

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Retirement funds heavily invested in equities at a risky time

Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.

Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.

The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.

The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.

Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.

The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.

• Bloomberg

Women’s World T20, Asia Qualifier

UAE results
Beat China by 16 runs
Lost to Thailand by 10 wickets
Beat Nepal by five runs
Beat Hong Kong by eight wickets
Beat Malaysia by 34 runs

Standings (P, W, l, NR, points)

1. Thailand 5 4 0 1 9
2. UAE 5 4 1 0 8
3. Nepal 5 2 1 2 6
4. Hong Kong 5 2 2 1 5
5. Malaysia 5 1 4 0 2
6. China 5 0 5 0 0

Final
Thailand v UAE, Monday, 7am

Updated: February 07, 2024, 1:18 PM