Costa Cruise Chip Wreck Likely to Slow Down Industry
Travel agencies and other cruise-bookers are bracing for a steep decline in sales following Friday’s Costa Cruise ship wreck off the coast of Italy. The Costa Cruise ship ran aground causing the ship to tip on its side. The death toll from the accident stands at six, but there are still at least 15 more missing. The accident is being blamed on human error of the captain, but still might frighten potential cruise goers.
USA Today quoted Simon Duvall of Florida-based SimonCruises.com, who said, “It’s hard to see the industry not experiencing at least a small short-term slowdown from this. The images and stories coming out of Italy are shocking even to those of us who love cruising and consider it safe, so to a first-timer or someone who is nervous about it, (this) very well might be a deal breaker.” Amber Blecker of CruiseOne in Colorado agrees with Duvall and says she expects business to be a little slower at least for a few weeks.
“During the time this is a top story and the pictures on the news are non-stop, questions fresh and answers unresolved, new bookings will likely be quieter,” said Blecker per USA Today.
Many in the cruise industry say that the timing of the much publicized accident couldn’t be worse, as January is usually a peak time for booking cruises. Ratings agency S&P cited the poor timing on Sunday when it said that the wreck would also have a negative impact on Carnival Corporation (NYSE:CCL), Costa Cruise’s parent company as well as cruise companies across the board. The cruise industry was previously expected to experience moderate growth this year, but S&P has now predicted a 3 percent decline in net revenue yields.
Here’s how these cruise line stocks are trading today:
Royal Caribbean Cruises Ltd. (NYSE:RCL): RCL shares recently traded at $27.93, down $0.82, or 2.85%. They have traded in a 52-week range of $18.70 to $49.99. Volume today was 5,918,633 shares versus a 3-month average volume of 2,890,730 shares. The company’s trailing P/E is 9.69, while trailing earnings are $2.88 per share.
Carnival Corporation (NYSE:CCL): CCL shares recently traded at $29.72, down $4.56, or 13.3%. They have traded in a 52-week range of $28.52 to $48.13. Volume today was 18,715,974 shares versus a 3-month average volume of 4,326,700 shares. The company’s trailing P/E is 12.28, while trailing earnings are $2.42 per share.
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