Eleven Months after Costa Concordia, Cruise Lines Still Struggling to Sell Cruises

The major cruise lines have reduced prices for this winter and early 2013 sailings by around 3.5 percent since late September, according to Bloomberg Businessweek.  

Cruise line operators started this year hoping that they could start charging passengers higher prices after offering discounts following the 2007-2009 recession. But then two weeks into the year, disaster struck when the  Costa Concordia capsized and images of panicked cruise passengers dominated the news. 32 people died. The Concordia still lies in the little Italian port of Giglio like a dead whale.

Costa Concordia - Cruise ShipNot surprisingly, cruise bookings slumped even as the cruise lines lowered prices.

Carnival and Royal Caribbean said that they were optimistic about increased demand and higher prices when they reported third-quarter results in the fall. But some analysts consider the price reductions as a sign that the cruise industry is still struggling and will have to wait until the second half of next year to see real improvements. 

Peak cruise season starts next February and that will be key to see whether the cruise lines can get back on the financial track. But before that, the cruise industry has to endure the one-year anniversary of Costa Concordia in mid January. That will be a difficult time for the cruise lines. As the giant beached whale Concordia remains half submerged on her side in Giglio, the cruise line will have to convince you that cruising is a safe vacation for your family. 

 

Image credit: Giglio News Web Cam

Continuing Negative Cruise News Beats Royal Caribbean Down

The 2012 second quarter earnings results are in for Royal Caribbean Cruises and its not good news.  

The cruise line reported a net loss for the second quarter of this year of $3,600,000 - compared to net income in the second quarter of last year of $93,500,000.

Slightly fewer passengers sailed on Royal Caribbean cruise ships during this last quarter compared to 2011.

The CEO of the cruise line, Richard Fain, tied the decline in passengers and net income to the Costa Concordia disaster in Italy in January, where 32 passengers and crew died. "The steady drumbeat of negative news emanating out of Europe is certainly having an effect," Fain announced at the conference call to analysts.