Carnival reveals impact of Concordia disaster

Bookings for Costa Cruises are significantly lower than last year, while Carnival’s other cruise brands are seeing a drop in bookings in  "high single digits".

But Carnival said despite the fall, it was determined to avoid cutting prices and cruise customers should not expect to see deep discounting.

The group said the Costa Concordia tragedy, which killed 25 people with seven more still missing, would significanly hit profits this year.

In the three months to February 29, the company lost $139m (£83.6m) compared to a $152m profit in the same period last year.

Carnival Corporation & plc chairman and CEO Micky Arison said: "Our company is resilient and we will continue to work through this challenging period. We have every confidence that we will restore consumer faith in the Costa brand and the excellent reputation Costa’s management team has built for the organisation which has a deep-rooted Italian heritage spanning more than 60 years.

"Carnival Corporation & plc expects to carry nearly 10 million guests on its global fleet this year and the long-term fundamentals of our business remain strong as consumers continue to place tremendous importance on quality and value when making vacation decisions. Based on our solid operating cash flow, strong balance sheet and high investment grade credit ratings we are well positioned for the future and remain confident in our long-term outlook."

The company said at present, cumulative advance bookings, excluding Costa, for the remainder of 2012 are approximately 3 occupancy points behind the prior year with prices slightly higher than last year’s levels.

But it said since the date of the Concordia incident, fleetwide booking volumes, excluding Costa, are still running high single digits behind the prior year at slightly lower prices.

Its European brands have been worse impacted than its North American brands, it added.

Booking volumes for Costa since mid-January until February 26 are running significantly behind the prior year at lower prices, but Carnival pointed out that Costa stopped virtually all of its marketing activities during this period.

Arison added: "Our base of business for 2012 is solid and booking volumes have gradually improved, which we believe is a testament to consumer confidence in the cruise industry’s long-standing record of exceptional safety.

"Despite the slowdown in bookings, all of our North American brands are still expecting a modest yield improvement in 2012 while our European brands, excluding Costa, are expecting to have slightly lower yields due in part to the slowing European economies.

"Overall, based on current pricing trends, any consumers holding out for deeper than normal discounts may be disappointed."

The Concordia is being written off as a total loss. Carnival will receive $515 million in insurance for the ship, which sank after hitting rocks off the Italian island of Giglio in January.

By Bev Fearis
 

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