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Rough Seas Continue for Cruise Industry
February 27, 2012 01:21 PM
DROWNING IN RED INK
It’s been a little over a month since Captain Francesco Schettino’s famous Mediterranean foot-dragging, and cruise ship companies just can’t catch a break. Prices have
since the Costa Corcordia tragedy, and no amount of
have drawn customers back.
On his end, Schettino probably won’t see another cruise ship for quite a while. Prosecutors revealed recently that the crash was partially caused by his decision to slow down the ship and have a romantic dinner with a Moldovan dancer. He’s currently
, along with several of the ship’s officers and Costa Corcordia management.
Well, things probably can’t get any worse for Schettino, but circumstances continue to conspire against cruise companies. Over the past week, events in Mexico and the Indian Ocean served to further call cruise safety into question.
Late Thursday, a 22-person Carnival Cruise (
) shore excursion in Puerto Vallarta was robbed at gunpoint. Carnival hasn’t commented in detail, but has made it clear that no one was injured and that the tour has been discontinued for the time being.
While Carnival is undoubtedly going to take a PR hit after the robbery, it seems more an indictment of safety in Mexico than anything else. Two weeks prior to the attack, the US state department issued a warning against “all but essential travel to parts or all of 14 Mexican states,”
according to CNN
Worse yet is the news—still developing as of this writing—of a disabled Costa Cruise ship in the Indian Ocean. At the moment, it looks like the ship, called the Costa Allegra, still has a captain onboard, and that its current situation was caused not by human error but by a fire in the engine room.
Still, the image of another Costa Cruise ship floating helplessly in the middle of the ocean cannot possibly be good for the company’s image. While the Italian Coast Guard expects a positive outcome, shares of Carnival—Costa’s parent company—have already fallen,
Of course, tough times for cruise companies should mean good times for their customers. For those willing to brave the high seas—which, it should be pointed out, are still very safe—prices are likely to continue their fall.
No positions in stocks mentioned.
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