Greece, China Financial Woes Could Hit Cruise Industry Hard

eGlobalTravelMedia

Analysts say financial troubles afflicting Greece and China could have a serious impact on the cruise industry.


If Greece exits the European Union, travellers “could choose to avoid the country for fear of being exposed to social unrest and having a poor travel experience,” according to an article on TheStreet.com.


If Greece becomes a harder sell, cruise lines like Carnival and Royal Caribbean may be forced to discount.


Also, if Greece leaves the European Union, the resultant European economic downturn may lead Europeans to defer their holidays. This, coupled with a move by North Americans away from visiting Greece, could impel cruise lines to delay building new ships for the European market. Profits would be hurt as projects sit in dry-dock.


Roughly 5.85 million pax embarked on cruises from European ports in 2014, a 3.6% drop on the previous year’s total. And according to one cruise executive, Greece is already impacting the cruise industry.


The Street.com report quotes Carnival Chief Financial Officer David Bernstein saying “geopolitical risk” in Greece and overall economic weakness in Europe has led to “some challenges on the yield side this year.”


Financial troubles in China pose challenges for the cruise biz as well. The big threat is that current problems hitting Chinese equities could cause rich Chinese to put off taking a cruise this year and in 2016 “just as the cruise line companies are devoting their newest ships to the region.”





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