After cruise disaster, bookings expected to fall in near term


Costa Concordia rescueAnalysts said Tuesday they expect a short-term, negative impact on Costa Cruises’ bookings but no significant long-term effects on Costa and the cruise industry because of the Costa Concordia accident.

Tim Conder, a senior analyst with Wells Fargo, said he expects Costa's bookings to take a short-term hit. The cruise industry as a whole will be affected in the short term to a more modest extent, he said.

“To what degree remains to be seen," Conder said. Long term, the impact of the accident to Carnival Corp. and the industry will likely be negligible as consumers look past the tragic one-off nature of the event,” Conder said.

Matthew Jacob, ITG Investment Research's senior leisure analyst, said he believes the Concordia incident will have a negative "headline impact" on Costa and the rest of the cruise industry.

“The industry has a strong safety record and major accidents have been rare. However, we believe the extensive media coverage of this incident and criticism of how the crew handled the situation could have some near-term impact on booking activity,” said Jacob.

Conder said the Concordia disaster couldn’t have happened at a worse time, with Europe in the midst of a debt crisis.

“[There is] potential renewed consumer-spending uncertainty following sovereign debt downgrades on Jan. 13 of several European countries and the subsequent weekend credit downgrade of the Euro Zone rescue fund,” he said.

Conder added that the accident occurred at the start of Wave season, the peak booking period during the first three months of the year.

“Prior to this weekend, our industry sources indicated the early part of the Wave season was off to a solid start,” he said.

Jacob said, “A slowdown in bookings could depress pricing during the crucial Wave season.

The 3,200-passenger Costa Concordia slammed into rocks off Italy’s west coast on Jan. 13, and quickly became half-submerged.

While the majority of passengers and crew were evacuated, 11 are reported dead and more than 20 still unaccounted for, according to Italian wire service ANSA.

The ship, which entered service in 2006, had departed Civitavecchia (the Italian port about 50 miles from Rome) a few hours before the collision near the Tuscan island of Giglio.

Follow Donna Tunney on Twitter @dttravelweekly.


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