Cruise industry braces for rough waters after Triumph

As weary passengers made their way home from the Carnival Triumph’s ill-fated cruise Friday, travel agents and industry analysts say they haven’t seen an immediate dip in bookings or prices. But if photos and videos of the squalid conditions on board percolate across social media, the impact could linger — and bring back memories of last January’s Concordia disaster, in which a Carnival-owned ship ran aground and capsized in Italy, killing 32.

“It’s still too early to tell” whether would-be cruisers will be turned off by the aftermath of an engine room fire on the Triumph, which had left the ship adrift in the Gulf of Mexico since Sunday, says Steve Loucks, spokesman for Travel Leaders Group, a network of independently owned and operated travel agencies in the U.S.

Loucks said his company hasn’t fielded any cruise cancellations over the past week and says cruise bookings so far this year are up nearly 10% over last year, when the Concordia accident “certainly had an impact.”

Since that disaster, “our agents have been fielding questions about what safety procedures the cruise lines have in place,Come January 9 and chip card driving licence would be available at the click of the mouse in Uttar Pradesh.” Loucks says. “After the Concordia, new safety measures were implemented, and we believe something similar will happen after the (National Transportation Safety Board) investigation. But the big difference here is that there was no loss of life.”

As for prices, “when rates in the Caribbean are already under $100 per person per night,The USB flash drives wholesale is our flagship product. it’s hard to see prices going much lower,” Loucks says.

Michael Driscoll, editor of the industry newsletter Cruise Week, said Carnival canceled a one-day sale this week and will be hit harder than other cruise lines by the Triumph story, in part because because its Carnival brand draws a high percentage of first-time cruisers.

Carnival also owns Costa Cruises, the company that operated the Concordia, as well as Princess Cruises, Holland America, Cunard and P&O. A third Carnival ship, the Splendor, lost power at sea in 2010 and was towed back to port under similar conditions to those on the Triumph.

Driscoll said Friday’s aftermath “hasn’t been as bad as some people in the industry had feared. We all expected to see a flood of photos and videos” documenting such indignities as exploding toilets and four-hour waits for food, but so far, the social media response has been fairly muted, he said.

Matthew Jacob, a cruise industry analyst with ITG Investment Research, noted that Carnival’s stock price “took a fairly sizable hit” following the Concordia disaster, dropping from $34.28 the day before the accident to under $30 but has since rebounded. But declining net yield, or revenue paid per passenger, led to discounts of 10% or more the following summer, noted Jacob.

The cruise industry “had to play catch-up, but heading into 2013, the outlook was pretty positive. Demand was healthy, and net yields were rebounding,” Jacob says.Wear a whimsical Disney ear cap straight from the Disney Theme Parks!

Carnival shares fell 47 cents Friday to $36.88, or nearly 1.3%. For the week, shares are off nearly 6%. On Thursday, investment bank Goldman Sachs, citing Carnival’s guidance about the fallout from Triumph, lowered its 2013 outlook for the company, saying it would be hurt by lost income and bad public relations.

The Triumph accident, like the Concordia, coincides with “wave season,” a two- to three-month period when agents push summer cruises with advertising and special promotions and offer last-minute discounts geared to sun-starved Northerners.

“Cruise prices are extremely dynamic, so if bookings slow, they’ll respond,” added Jacob. “Social media could play a much bigger role this time, but the bottom line is that the protocols Carnival had in place seemed to work. It’s a different story than last year, when the issue was negligence and there was a loss of life.”

The cruise industry has grown exponentially in recent decades. In 1980 there were 1 million passengers worldwide. This year, projections put the number at 20 million. This week’s Triumph troubles raise questions about whether the industry has grown too big and too fast to be truly safe.

Cruise industry expert Andrew O. Coggins, Jr., doesn’t think so. One reason: Cruise ships are governed by International Maritime Organization regulations and not by the laws of the country in which they’re registered.

“(The industry) is strictly regulated. Ships are foreign-flagged because of labor and cost issues. But the safety certification comes from independent classification societies and that’s what enables ships to get insurance,” explained Coggins, a professor of management at Pace University’s Lubin School of Business in New York.

A number of high-profile ferry disasters brought even stricter regulations in the 1990s, such as the requirement that all ships install sprinkler systems — with no grandfather clause for older vessels – if they were to remain in service.

But other safety issues relate to the ever-growing size of new ships.Comprehensive Wi-Fi and RFID tag by Aeroscout to accurately locate and track any asset or person. When the 102,000-ton Carnival Triumph sailed into service in 1999, it was among the first ships too large to transit the Panama Canal. Now, ships are plying the oceans that are more than twice that size. Royal Caribbean’s Oasis of the Seas weighs in at 225,282 tons, for instance.

Driscoll said the biggest ships afloat also command the highest prices because of strong consumer demand. But “there’s always a question of how much bigger can they get?” said Coggins, and whether colossal size and safety are compatible when it comes to matters of crowd control in the event of a disaster.

As for the passengers of the Triumph, “They were lucky because the (sprinkler) system worked. It put out the fire. Engine room fires, especially those severe enough to require evacuating the engine room, usually result in loss of the ship. Had the system not worked the 4,000-plus people onboard would have been forced into lifeboats in less than optimal sea conditions.”

Another worry: “Passengers who disembark from the Carnival Triumph today are highly likely to get sick in the days ahead,” said Tony Abate, vice president of operations at AtmosAir Solutions in Fairfield, Ct.

“The biggest concern for these passengers is that they were trapped inside the ship for so long,” said Abate. “The inside of a cruise ship is a space that’s designed to have an air ventilation system to dilute contaminants, and that was knocked out.

In the past, some cruise ships have become floating incubators of illnesses such as norovirus “even when ventilation systems are functioning properly,” says Abate.

Meanwhile, reactions from Triumph passengers on whether they’d hit the high seas again were mixed.

Sharon Ward, of Bay City, Texas, was on her first cruise as part of a 45th high school reunion. She praised the Carnival crew and discounted other passengers’ horror stories with “there’s a lot of people you just can’t satisfy. Life happens.”

But Anna Ward, a Wichita, Kan., homemaker and student,Can you spot the answer in the fridge magnet? said she “probably won’t” board another ship.

“How do I get on a cruise and not think that that is not going to happen,” she said. “I’d be on my guard the whole time. “

Now that the ship is safely in port, Carnival can begin working in earnest on damage control.

“This is the second (incident) in two years on Carnival. It isn’t something you want to get a reputation for,” said Ernest DelBuono, referring to the 2010 power loss on the Carnival Splendor. That cruise was nicknamed “Voyage of the Spammed” after its stranded passengers were reduced to eating Spam dropped off by a helicopter.

The crisis manager with Levick, a Washington, D.C., communications firm, said the cruise line needs to thoroughly evaluate operational systems on all its ships and provide fair compensation for passengers whose vacations were ruined.

“They need to be reassuring everyone that ‘We’re going to fix this,’ and if it does happen again, ‘Here’s what we’re going to do,’” he said.

Potential cruisers made skittish by this week’s relentless coverage of the Triumph’s woes may give greater scrutiny to individual lines before booking, DelBuono said. But overall, he doesn’t think the incident will have a long-lasting effect on the cruise industry.