Carnival's SEC Filing Tells the Truth: The Costa Concordia Tragedy Has Slowed Things Considerably

When I was a tour operator several years ago, I was constantly amused by the way in which my competitors would fudge the facts in responding to questions from journalists about how business was. The theory was that if you answered truthfully that business was lousy, you ran the risk of leaving the impression that your company was in trouble and about to go under. So instead, you responded: business is great, we're inundated with bookings.
 
I thought about this all-too-human reaction when I read the recent statements by several cruise brokers that cruise bookings had actually firmed up in the wake of the Costa Concordia tragedy, and that prices were now 1% higher. Something closer to the truth was revealed last week by Carnival Cruises (owner of Costa Cruises, operator of the ill-fated Costa Concordia) in a required 10-K filing with the Securities and Exchange Commission, a document that had to be submitted under oath. In it, Carnival admitted that future cruise bookings on all its ships had declined in the "mid-teens" in the immediate aftermath of the Costa Concordia sinking. It went on to admit that bookings of cruises on Costa Line's ships in particular were "down significantly."
 
All this was further emphasized in a recent comment in USA Today by a perceptive cruise journalist, Gene Sloan (a Frommers travel guide author, among other things), in which he pointed out that advance bookings for summer cruises in the Mediterranean were soft.
 
So what does this all have to do with us? I have earlier pointed out that the safety record of the cruise industry is actually pretty good; out of the multitudes of passengers who have taken cruises in recent years (over a hundred million of them?), only an infinitesimally small number have been injured or killed. All forms of transportation are of course potentially dangerous, but the single most dangerous activity of transportation for U.S. travelers is driving a car on the highways and streets of America. So I would doubt that anyone would put off their cruise plans because of the Costa Concordia tragedy.
 
And it should be pointed out, in particular, that if Mediterranean cruises are significantly down in popularity, that this would be an excellent time to book a Mediterranean cruise in summer: prices will be low and discounts rampant. Beyond that, Mediterranean cruises are different from the kind of cruise you encounter in the Caribbean. Passengers are interested in observing the foreign life in the Mediterranean port cities and less interested in the fun-and-games features on those amusement parks masquerading as Caribbean cruise ships.