Toll of Carnival Triumph Ordeal Remains to Be Seen

by Andrew Sheivachman February 21, 2013

In the days following the Carnival Triumph’s return to port, the industry is divided over what last week’s events will mean for cruising in 2013.

According to Cruise Planners co-president Michelle Fee, that organization has recorded solid sales since an engine fire left the Triumph without power for five days.

“People who are already in the sales funnel and are cruisers are going to put down their credit card no matter what,” said Fee. “If someone is new to cruising, I don’t know if this will scare them away; most people have this in perspective, since no one was hurt.”

Cruise Planners agents have seen very few cancellations, said Fee, leading her to believe that consumers are not overreacting to the news.

“People onboard were making it seem dramatic, but then came off the ship healthy and fine,” said Fee. “The news agencies rehashed Concordia, but what does that have to do with anything?”

Pain for Carnival?
For the cruise industry, “there will be a minimal impact and that will be more brand-specific,” said Brad Tolkin, CEO of World Travel Holdings, whose brands include Cruise One and Cruises Inc.

“Sales have been impacted, but we’ve seen the worst of it.”

Although Carnival has cancelled the Triumph’s sailings until April, the ship represents only a small portion of Carnival Corp.’s inventory. “From our estimation, the Carnival Triumph represents 4.5% of Carnival’s lower berth inventory,” Tolkin said.

Image problem
Still, exhaustive media coverage of the Triumph’s woes has created an image problem for the cruise industry, especially among would-be first-time cruisers.

“In the short term, this is going to dampen the enthusiasm that cruise rookies have for cruising,” said Carolyn Spencer Brown, editor of Cruise Critic.

But, she added, “I don’t think people are going to cancel their cruise, and we certainly know from anecdotal information that this is an unusual situation.”

Managing the damage
Brown thinks Carnival neglected to do enough to get out in front of events aboard the Bahamas-flagged Triumph.

“I was riveted to the coverage, it made for fascinating TV,” she said. “With this kind of story, you can manage the message to some extent and not have speculation going on. That is what Carnival didn’t do well.”

Depending on the outcome of investigations by the U.S. Coast Guard, the National Transportation Safety Board (NTSB) and the Bahamas Maritime Authority, the PR woes for Carnival could just be beginning.

“If that report comes out from the NTSB saying the fire had to do with propulsion problems on an ongoing basis, then Carnival’s got another PR problem on their hands,” said Brown.

Too close for comfort?
One factor affecting how consumers respond to the Triumph story could be the ship’s proximity to the U.S. as it floundered at sea last week. For would-be cruise rookies, this could make recent events more meaningful than last year’s Costa Concordia disaster off the coast of Italy.

“Experienced cruisers know this is so random and infrequent, but other people who have never been on a cruise before can only imagine how horrible it must have been,” said John Werner, president of MAST Vacation Partners.

“It did happen in this hemisphere, making it closer to home and more visible here.”

What about Wave Season?
How serious an effect on Wave Season bookings is the Triumph likely to have?

“This is going to alter Wave Season,” said Fee. “The cruise lines will come up with additional promotions” to lure more price-sensitive consumers.

Last year, Wave Season got off to a slow start after the Concordia disaster, which occurred on Jan. 13, 2012. But the timing of this year’s potentially damning events is different.

“We’re further into Wave Season than we were a [when the Concordia sank], so there’s already been a lot of business booked,” said Werner. “It’s been a stronger Wave Season than in past years.”

Former cruise executive Rod McLeod said that “from talking to some of the large agency groups, sales are going fine. People are asking more questions, that’s all.”

Still, “there aren’t many vacations out there where you can be stranded for five days,” added McLeod, co-founding partner of McLeod, Applebaum & Partners.

Of course the full extent of the impact on Wave Season won’t be known for some time. “It will be hard to measure until cruise lines come out saying how their bookings and call volumes have fared since the incident,” Werner said.

If Wave Season turns out to be weak, that won’t necessarily be due to the Carnival Triumph’s impact, Brown said. “Half the cruise lines didn’t even participate in Wave this year.

“We’ve seen booking patterns change somewhat drastically. Consumers have more information at their fingertips and are always hunting bargains; they don’t need a three-month [sale] period anymore.”

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