4:55pm

Tue March 12, 2013
Business

Cruise Industry Stays Confidently Afloat Amid Major Accidents

Originally published on Tue March 12, 2013 6:42 pm

Transcript

MELISSA BLOCK, HOST:

If the cruise industry is smarting from some recent PR disasters, it's not letting on. Executives are gathered in Florida this week for Cruise Shipping Miami, a big conference. It's been a month since an engine fire on the Carnival Triumph knocked out the ship's power, leaving it stranded in the Gulf of Mexico. Cable networks seem to carry every moment of the drama, as the ship and more than 3,000 passengers were towed slowly to port.

But despite that and some other setbacks, the cruise industry had a record year for ticket sales, and they're expecting another one. Here's NPR's Greg Allen in Miami.

GREG ALLEN, BYLINE: More than 10,000 people involved in the cruise industry are in Miami this week for their annual convention. Today, CEOs of the largest cruise lines discuss the state of the industry. And the word executives repeatedly brought up, the best way they said to describe their industry is resilient. It was just over a year ago that 32 people died in one of the worst cruise line accidents of the modern era. The Costa Concordia ran aground and wrecked along Italy's Tuscan coast.

Pierfancesco Vago is a CEO of MSC Cruises, which specializes in Mediterranean travel. He notes that accident came in the middle of the industry's peak or wave season. Many, he says, thought it would scare newcomers away from cruising.

PIERFANCESCO VAGO: But it's amazing how this 2012 has been forgotten. I mean, we see already the new wave season in 2013 that the first-comers are coming back again.

ALLEN: After last month's Carnival Triumph fiasco, in which a power outage left restrooms and food in limited supply, a Harris Poll found the incident affected how Americans felt about cruising. Trust in cruise lines fell significantly. More than half of those who had never taken a cruise said they were now less likely to book one. A month later, though, bookings remain strong, up over last year.

Even at Carnival, the company that reaped nearly a week of negative news coverage, a prominent Wall Street analyst says the impact is minimal. The estimate on earnings per share at the publicly traded company was reduced by just 10 cents to account for the cost of repairing and refitting the Triumph. But that's not to say Carnival and the other cruise lines aren't taking the Triumph experience seriously.

Carnival's CEO Gerry Cahill says there's an NTSB and Coast Guard investigation, and an independent cruise industry probe. In addition, Carnival has four different teams of its own focused on the Triumph incident. He says they're looking at everything from redundant engine room systems to improving the ship's ability to provide food and accommodations for passengers using only emergency generators.

GERRY CAHILL: It will take us a little bit of time to complete it. But you can rest assure that it is our highest priority in the entire organization. It is the thing we are most focused on. And we will come up with some solutions that we can implement across our fleet.

ALLEN: Asked about what he would say to reassure newcomers to cruise travel who may have had their confidence shaken, Cahill said, first of all, remember, incidents like the loss of power aboard the Carnival Triumph are very rare.

CAHILL: And the good news is when we've had things like this, we've always been able to deal with them safely. No one was injured on the Carnival Triumph. No one was hurt. No one was ever at risk.

ALLEN: As worrisome as the Carnival Triumph was for the industry, cruise line executives now are mostly upbeat. After all, this was a decade in which there was a worldwide recession, spiking oil prices, along with hurricanes and political unrest at some Mediterranean destinations, all of which affected the industry. Adam Goldstein, the CEO of Royal Caribbean, says the next decade is expected to be the one in which millions of Chinese and others in the Asian market will be introduced to cruise travel.

ADAM GOLDSTEIN: As far as I can tell, the people in the market have the same desire to see the world that everybody else has, and now have the ability to do that.

ALLEN: That's one reason why industry officials are predicting another record year, one in which 21 million people are expected to book cruises. Greg Allen, NPR News, Miami. Transcript provided by NPR, Copyright NPR.