Europe Still The Big Challenge As Cruisers Shrug Off Zika
Recent market reports suggest cruise sales have been immune to concerns about the Zika virus, so when NCLH CEO Frank Del Rio was asked on a recent earnings call about any impact from the latest Zika headlines, his answer seemed reasonable.
“The short answer is no, we're not seeing any evidence. But the reality is that the only evidence that we can actually get our hands around and quantify, if there was any, would be cancellations, and there have not been any upticks in cancellations. The unknown is always how many bookings would've taken place that haven't taken place because someone was concerned about Zika."
While some agents consistently report Zika is hurting sales, many say they are surprised by the lack of negative impact among their clients. However, the story is still unfolding.
One agent told CruiseWeek: "Our Caribbean cruise business is up over the last 4 months, so the impact has not been that bad. But keep in mind the negative news is building, so we have yet to see the full brunt. Case in point, the CDC [Centers for Disease Control] warning on Miami.”
Zika headlines spiked in the past week with media outlets worldwide covering the Zika virus in Florida. The CDC is now warning pregnant women to not only avoid north of downtown Miami but the area of Miami Beach. “Pregnant women should not travel to those 2 areas,” said the director of the CDC on a piece that aired time and time again on CNN.
Yet the fact remains that to date there has been no measurable effect on cruising, no doubt influenced by the demographic that cruising attracts.
In a report released this week headlined: "Cruise Lines: Somewhat Positive Cruise Checks - Zika Booking Fears Swatted Aside," Gregory Badishkanian of Citi Investment Research noted, “While there has been some concern and media attention regarding Zika (even over the past week), our latest cruise checks do not suggest any meaningful negative impact to Caribbean cruise volumes and our indication is that Caribbean trends are still very solid.”
Cruise Week’s spot checks with agents confirmed the sentiment: “Our Caribbean sales for the last 90 days are up 10%,” said one top retailer. “Zika is probably a factor but it’s hard to gauge the impact when sales are positive. Anecdotally, I have not heard complaints from our agents or customers.”
The foremost challenge for the cruise biz right now remains Europe: "Our latest checks have seen North American-sourced demand for European cruises worsen over the last few weeks,” writes Badishkanian.