A Very Bad Week In The Cruise Biz

Cruise Week

Last week was not a good one for the cruise industry. First the stocks took a beating and then Anthem of the Seas and its pax took a battering from high winds off the Carolinas.

Is there long-term fallout from a week that will go down as the worst one for the cruise industry in over 2 years?

One issue impacting cruise stocks is the perception that the Zika virus is impacting bookings. However, retailers tell CruiseWeek that the Zika virus appears to be impacting Caribbean resort business but not cruising. “It is raising concern among a sector in the 25 - 40 age level but is not a big deal with the overall Caribbean cruise market,” observed one cruise seller.
Another added that consumers view cruise ships as being too far out at sea to suffer from mosquitoes. This retailer said Zika fears might impact certain shore excursions but not the cruise itself. A Zika impact survey of over 1,100 agents released by Travel Leaders Group in essence concurred with these spot checks, finding limited impact on cruise decision-making.

Does Zika have the potential to hurt cruising like norovirus did? Not at this point.

Norovirus had pierced the national conversation in terms of cruising - recall “The Cruise Ship Virus.” Zika too has become the talk of the town, but it’s not specifically related to cruising.

It seems that just as Wave Season started early, it may also be winding down earlier than usual. The cruise industry’s stock market issues may be more related to issues outside of the U.S., and not just China. To the south, Latin America now looks terrible as a growth prospect. The Loonie is weak, and it’s impacting Canadian sales.

“However, demand seems to have slowed in recent weeks after the Istanbul terrorist attacks, weak stock market, presidential election distraction, and Zika virus. Cruise lines are not panicking, but some agents indicate perks are rising and rates falling slightly.”

But those issues and cruise stocks are not fully representative of agent sales. Coming into this weekend, there’s little that would indicate long-term problems.
One reason is that there are positives. The ad campaigns run by the lines this winter are numerous and wide ranging. Collectively, they are projecting a very warm image of cruising that has not been seen on North America’s TV screens in 20 years.
But there’s a lot of worry. Even before Anthem of the Seas had its nightmare sailing in the storm off the Carolinas this week, Royal’s stock was down about 30% year to date. It’s even worse now.

Mother Nature aside, a lot was said about the captain’s decision to sail into the well-predicted storm. There were plenty of pax appearing on the network news Monday night correctly criticizing that decision. But will there be a long-term impact on North American agent sales due to Anthem?
Putting it in perspective, no winter season is without a cruise ship nightmare story, and this one wasn’t as bad as some over the years - Concordia, big Noro outbreaks, etc. In the case of Anthem, such a visually striking event is sure to bring bad publicity, and this was no exception. But overall, it will likely have only a short-term impact on business.

All in all, there are a lot of challenges facing the industry right now. The business needs a lift - something positive like an announcement regarding Cuba. But there’s no joy there to relate. To date, the Castro regime hasn’t even publicly said they accept the fathom product, and that’s seemingly tailored to their interests more than that of traditional cruisers.
Some clarity in a positive sense there could help lift the sinking feeling from the past week.

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