Carnival’s impact on the public’s perception of cruising

Carnival’s impact on the public’s perception of cruising

By Tom Stieghorst

*InsightSince the engine fire on the Carnival Triumph in February, the industry has been closely monitoring the public perception of cruising and whether the industry has come under a cloud.

Did the problems experienced by a single Carnival Cruise Lines ship taint perceptions of the entire cruise experience?

There’s more evidence in Carnival Corp.’s second-quarter financial results that the perception of a problem with cruising has mostly affected Carnival’s flagship product.*TomStieghorst 

Carnival said that, excluding Carnival Cruise Lines, bookings for the next three quarters are up, and at higher prices.  That means that Princess, Holland America Line, Cunard Line and the rest of the Carnival stable have been more than holding their own since March.

Competitors such as Royal Caribbean International and Norwegian Cruise Line likewise do not appear to be struggling with lower prices, according to Wall Street analysts.

When Carnival Cruise Lines gets thrown into the mix, however, Carnival Corp. bookings are behind last year, and at lower prices.  Regrettably for Carnival Corp., and perhaps the industry, if Carnival Cruise Lines isn’t healthy, the conversation about cruising suffers. 

It should be noted that two Harris Interactive polls, one in March and a follow-up in May, found that perceptions about quality, trust and intent to purchase for seven cruise brands were down across the board, albeit with Carnival Cruise Lines scoring lowest.

It is hard to square the poll results with the financial results, except to say that the poll is a measure of what people say, and booking data is a measure of what they actually do.

The financial results say that, except for Carnival Cruise Lines, there’s more demand for cruises this year than last. If Carnival Cruise Lines can heal itself, however, the whole industry will undoubtedly benefit.

Carnival sues Alabama shipyard where Triumph was towed

Carnival sues Alabama shipyard where Triumph was towed

By Tom Stieghorst
Carnival Corp. has filed a lawsuit seeking damages from the shipyard in Mobile, Ala., where the Carnival Triumph was towed in February after its engine fire.

The suit says deteriorated and inadequate mooring bollards failed during a rainstorm on April 3, allowing Triumph to break free of the pier and damage other vessels and structures. Triumph itself also sustained “significant” damage, the suit says.

The suit seeks at least $12.6 million in damages from BAE Systems Southeast Shipyards Alabama Property Holdings LLC. Attorneys for BAE Systems have not yet filed a response.

Also named as a defendant in the suit is Bernadette Johnson, wife of John “Buster” Johnson, a worker who drowned when the Triumph broke free. She had sued Carnival on May 29, the suit says.

In the suit, Carnival seeks a declaration that it is not liable for injuries or damages from the incident.

Carnival said it has claims or expects claims from the Signal Ship Repair shipyard on the Mobile River and from the U.S. Army Corps of Engineers, whose dredging ship was hit by Carnival Triumph.

Carnival exec foresees rebound

Carnival exec foresees rebound

By Tom Stieghorst
Howard FrankSOUTHAMPTON, England — The vice chairman of Carnival Corp., Howard Frank, said smoother seas are ahead for the world’s biggest cruise company.

Carnival has been buffeted by weak demand and negative publicity since February when an engine fire on the Carnival Triumph made headlines.

Prices for Carnival’s flagship brand have since dropped 15-20% in the estimation of some Wall Street analysts.

Interviewed here prior to the naming ceremony of the Royal Princess, the latest Princess Cruises ship, Frank said, “I think we’ve bottomed, from the standpoint of the business.”

Frank said weekly surveys of consumer sentiment commissioned by Carnival are also starting to get better. That is at odds with a recently released Harris Interactive poll that showed continued erosion in consumer sentiment about seven cruise brands.

Frank said Carnival’s survey asks different questions and is more current than the Harris data from May. But he said the recovery will be gradual.

“I don’t think that you turn the Costa situation or the Carnival situation around overnight,” he said.

“Some of it is just time,” he added. “We’ve had a number of incidents.”

The $735 million Royal Princess was named by the Duchess of Cambridge, Kate Middleton, in a pierside ceremony documented by 110 media representatives, Princess officials said.

“We’re pleased to provide a good news story for the industry,” said Jan Swartz, Princess’ executive vice president of marketing.