Will the latest fiasco with Carnival cause even more fall out for the cruise business where daily rates for some packages have already plummeted to as low as $100 per person?
Most travel industry experts say it’s too early to tell if travelers will avoid booking cruises in the near future. As the Triumph undergoes a federal investigation, cruise line investors and travel agencies brace for the fall out that may possible rival the earlier disaster where another Carnival owned ship, the Concordia ran capsized after running aground in Italy with over 30 fatalities.
Representatives from the Travel Leaders Group, a U.S. based network of independent travel agencies state that although there is concern, that so far many agencies haven’t had any cancellations and with the already low rates, cruises are booking up early this year with about a 10% increase over this time last year.
U.S. travel agencies have reported that most have been answering queries concerning the cruise line safety procedures and seeking reassurance that there are sufficient standards in place, especially after the incident with the Concordia last year. Most cruise lines did put new safety measures in place after the incident off the coast of Italy last year and there will more than likely be updated measures since the incident with the Triumph.
One spokesperson for the Travel Leaders Group did state with already lowered prices for quite a number of cruises that they don’t foresee rates dropping any lower. However it should be noted that Carnival cancelled a special one-day sale in the past few days and will be hit harder than most other lines, especially with all the cancellations that were made for the Triumph and the fact that many first time cruisers choose the Carnival line. Carnival’s stock took a huge hit after the Concordia fiasco dropping to under $30 per share. Although the stock bounced back a bit, they have had a decline in net yield or per passenger revenue that led to discounts of 10% or more in the months following.
While the cruise industry has grown exponentially in the past few decades, cruise prices are very dynamic to industry demands. If bookings are slow, the cruise lines will pull out all the stops to fill rooms. One of the biggest factors that affect the industry these days is social media networks. If passengers aren’t happy and the word spreads, bookings drop and the cruise line business sinks even lower.