Cruise executives last week found themselves altering their
logistics and marketing strategies in response to hurricane damages to several
major Caribbean ports.
Carnival Corp., for example, said it did not expect to use
discounting to buck up Caribbean sailings and instead will invest resources in
forms of marketing designed to stimulate general demand.
While the images of storm destruction in the Caribbean might
have in times past triggered price cuts to counter consumer reluctance,
Carnival CEO Arnold Donald said that is not the plan this time around.
"[In the] fourth quarter we're largely booked already,
and so at this point, we're not looking to stimulate with pricing," Donald
told analysts on Carnival's third-quarter earnings call.
"That's a fluid situation," Donald added, saying
that if circumstances called for it later, there could be a different decision.
"But at this point that has not been the case."
Carnival Corp. said that port closures and voyage
disruptions from the spate of hurricanes in Texas, Florida and the Caribbean
will reduce earnings by $72 million to $86 million in the fourth quarter. To
put that in perspective, the company reported net income of $609 million in Q4
Since Hurricane Maria blew through the Virgin Islands and
Puerto Rico in the beginning of September, cruise lines have been forced to
revise their October itineraries in the region.
Donald cited five ports with a significant number of
scheduled calls that won't be open in October: San Juan, St. Thomas, St.
Maarten, Tortola and Dominica. All were hit squarely by either Hurricane Irma
or Hurricane Maria.
"I would say in total maybe 7% to 9% of the ports [in
the Caribbean] would have been severely impacted to the point where they were
shut down for some period of time," he said.
"But the vast majority of ports are open, and there are
options and alternatives and plenty of fun places for people to go."
He estimated that there are 40-plus ports in the Caribbean
that are unaffected by hurricanes so far.
Of those that are damaged, Donald said that Dominica and
Tortola are more significant for some of Carnival Corp.'s European brands,
which visit in the winter. Of the North American brands, Carnival Cruise Line
has the most ships in the region and has made itinerary revisions for 16
departures scheduled from Oct. 7 through Oct. 31.
Generally, the ships are going to western Caribbean ports
such as Cozumel, Grand Cayman and Roatan, or to Freeport, Nassau and Half Moon
Cay in the Bahamas.
Cruise lines reposition
Other lines have also hit the reset button.
Royal Caribbean International has rescheduled the
itineraries of six of its ships through Oct. 22, including its three
Oasis-class ships and the Serenade of the Seas. The Adventure of the Seas is
being used for humanitarian relief in Puerto Rico until its Oct. 7 cruise,
which will visit the eastern Caribbean but will substitute Martinique for St.
One of the surprises has been the rapid reopening of Key
West as a cruise destination. Royal's Enchantment of the Seas had planned to
substitute Freeport for Key West on its Oct. 2 and 9 cruises but now has
restored Key West to the itineraries.
Likewise, damage to Havana has proved less than anticipated,
and Norwegian Cruise Line's Norwegian Sky has resumed its regular weekly
four-day cruise from Miami to Havana and Great Stirrup Cay.
Norwegian's other ship currently in the Caribbean, the
Norwegian Escape, has altered all of its eastern Caribbean itineraries through
the end of December and will instead sail to western Caribbean ports such as
Cozumel and Harvest Cay.
Deployments of three MSC Cruises' ships have been impacted
by hurricane. The Miami-based MSC Divina in October has dropped Phillipsburg,
St. Maarten, and San Juan from its itinerary and will now visit ports in
Jamaica, the Cayman Islands, Mexico and the Bahamas.
The new MSC Seaside, after its debut in Miami on Dec. 23,
will visit Antigua rather than St. Maarten on its seven-day cruises through
March 17. And its MSC Fantasia, which caters mainly to European guests who fly
to Martinique or Guadeloupe, will call in the Dominican Republic and St. Kitts
instead of Tortola and Dominica.
Other lines, such as Holland America Line, migrate away from
the Caribbean to Alaska and Europe during the summer but start returning ships
to the region in mid-October.
HAL's first ship to return is the Koningsdam, which has an
11-day cruise from Fort Lauderdale departing Oct. 18. HAL said it will
substitute stops in St. Lucia and Antigua for calls that had been scheduled in
St. Maarten and St. Thomas. It has made similar changes on Caribbean cruises
through year's end on the Nieuw Amsterdam, Rotterdam, Eurodam, Prinsendam and
Meanwhile, Arnold said Carnival Corp., while it is providing
humanitarian aid in the Caribbean, remains focused on the big picture of
creating more interest in cruising.
To that end, it has introduced two cruise video shows that
will be available to consumers directly over the internet. The shows "Go"
and "Local Eyes" will be streamed free to viewers with digital TV
players such as those from Roku, Apple TV and Amazon Fire TV.
Carnival said "Go" will follow an artist exploring
the world by ocean, while "Local Eyes" will tour destinations with
longtime residents. Both will be produced in 10-minute segments.
Carnival's streaming service, called OceanView, will also
make available cruise shows previously seen only on broadcast and cable TV,
such as "Ocean Treks with Jeff Corwin" and "Good Spirits."
"Ultimately our goal is to continue to generate broad
awareness of cruising as a great vacation," Donald said, and to inspire
viewers to consider cruising among their vacation options.
Carnival took over a number of electronic billboards in New
York's Times Square on Sept. 28, synchronizing them to promote the shows, the
OceanView service and new mobile games Carnival has also developed.
On an average day, about 330,000 people enter Times Square,
according to the Times Square Alliance.
Carnival says that about 190 million people have tuned into
its cruise TV programming on ABC, NBC or the A&E Network.
Since taking the top spot at Carnival Corp. in 2013, Donald
has championed outreach to break down myths about cruising as a way of
stimulating more demand. Social media, traditional media and advertising are
all being harnessed in pursuit of that goal.
"We have many more efforts in the pipeline to increase
consideration for cruise globally," Donald told analysts, adding that TV
shows are on the air not only in the U.S., but the U.K. and Italy, as well.