Cruise firm reports drop in bookings after disaster

Carnival Cruise Line won't say exactly what percent drop it has seen in bookings but disclosed Monday, that in the 12 days following the Concordia grounding there was a decline. ASSOCIATED PRESS Enlarge

NEW YORK — The frightful images of a sinking Italian cruise ship have scared off some cruise passengers, at least temporarily, during the industry’s peak booking season.

Travel agents — who book more than two-thirds of cruise passengers worldwide — have been nervously watching bookings ever since the Costa Concordia, which is owned by Carnival Corp., ran aground Jan. 13.

On Monday they got a new reason to be nervous: Bookings fell significantly for Miami-based Carnival after the Costa accident. Attention is now focused on Royal Caribbean Cruises Ltd., which is to report earnings Thursday. An increase there could show that passengers are fleeing Carnival because of safety fears. A decrease could indicate an overall distrust of all cruise lines.

Nearly 11 million Americans took cruises last year, generating an estimated $14.5 billion in revenue for the industry, according to PhoCusWright, a travel research firm. Like the rest of the travel industry, cruise lines are still recovering from the recession. Several new megaships started sailing just as passengers struggling with finances decided to stay home. But 2012 was supposed to be a year of moderate growth.

Carnival won’t say exactly how much bookings have dropped, but it disclosed Monday that in the 12 days after the Concordia capsizing it experienced a decline “in the mid-teens [percentage] compared to the prior year.” Reservations hit a low on Jan. 16, the company said in its annual report filed with the Securities and Exchange Commission.

Carnival runs 101 ships under several brands including Costa, Carnival, Cunard, Holland America, Princess, and Seabourn.

It said reservations with Costa are “down significantly” but difficult to interpret because many Costa customers were rebooked on other ships because of the loss of the Concordia ship. “Despite these recent trends, we believe the incident will not have a significant long-term impact on our business,” the company said.

Carnival’s statement is the first evidence that passengers are hesitant to embark on cruises after seeing the images of the Concordia shipwrecked off the Italian coast. More than 4,200 passengers and crew were on board at the time of the accident. Seventeen bodies have been recovered. Sixteen people are missing.

Europeans, who have been bombarded with daily reports of the accident, have been particularly skittish. They accounted for about 38 percent of Carnival’s revenues last year.

Unlike plane tickets or hotel rooms, which are mostly booked directly through the Internet, most cruises are sold by travel agents. Passengers like speaking with somebody who can assist them with all the decisions and quirks involving each ship and itinerary. That scattered sales approach makes it harder to gauge the impact of an accident such as the Concordia. “Who knows how many people … [were] on the fence and decided not to book?” said Michael Driscoll, editor of Cruise Week.

Barclay’s Capital noted that on Thursday, the Carnival line began offering promotional onboard credits of up to $200 for things such as drinks and spa treatments. “Despite this ad, which in normal circumstances would have stimulated strong call volume, calls remain down 10 [percent],” analyst Felicia Hendrix wrote in a note to investors.

A major unnamed online travel agent has also seen cruise call volume fall 30 percent, she said.

She also noted that cancellations in the United States are up 10 to 15 percent. That’s because savvy travelers are backing out of trips now in anticipation of getting the same cruise later for less.