The parent company of the capsized ship, Carnival, saw its share price slump almost 17 per cent in the UK overnight. The company says lost earnings from the disaster may cost it almost $100million dollars, and that doesn’t include insurance and personal injury claims which may arise.
Carnival has gone from a business pulling in $564million in revenue in 1987 to close to $16billion last year. Its CEO, Micky Arison is at number 75 on Forbes’ rich America list with a net worth of $4.2billion. But no doubt, he, and the company will have its work cut out, trying to rebuild the brand.
The company’s safety record is strong. The Wall Street Journal says there’s been fewer than 0.1 fatalities per million passengers, and that’s three times better than that of airlines.
Repeat cruisers make up 65 per cent of Carnival’s customers. The question is, will this disaster cause these travellers to rethink booking with the company, or this kind of holiday altogether?
Furthermore, this incident happened at one of the company’s peak booking times, as holidaymakers plan their mid-year European summer trips. It’s believed up to one-third of all cruise trips are booked in the January to March period.
Morgan Stanley for example, has downgraded the company’s 2012 earnings by 30 per cent as a result of lower expected sales.
So, does this accident change your take on ocean liner holidays?
I do have an even bigger question though, how do they now save the half sunken ship and tow it out of the water?