At a forum typically reserved for optimism, top cruise line executives on Tuesday spent a somber part of the morning discussing their dedication to safety and the fallout from January’s deadly shipwreck in Italy.
The “State of the Industry” panel at this year’s Cruise Shipping Miami conference revealed an industry that is eager to emphasize its focus on safety in the wake of the Jan. 13 Costa Concordia accident — and hopeful that they eventually will return to the strong business they saw before the wreck.
For the bulk of the two-hour discussion, a panel of six cruise line chiefs took on questions of training, language complications, crisis management and safety precautions — all issues that have been raised since the Concordia disaster, which killed 25 people and left another seven missing and presumed dead.
“Simply put, safety is our highest priority,” said Christine Duffy, president and CEO of the Cruise Lines International Association and moderator of the event. “It is absolutely essential to our business and there is nothing more important.”
She and Howard Frank, the association’s chair and vice-chairman/chief operating officer of Carnival Corp., said a thorough review of safety procedures was underway at CLIA’s 26 member lines. They highlighted the new policy already enacted that says embarking passengers must take part in an emergency drill before leaving port — a change enacted in direct response to the Concordia incident. Costa Crociere is owned by Miami-based Carnival Corp.
“As everyone here well knows, the Concordia incident has focused considerable attention on the cruise industry,” said Frank. “While most of this attention has been negative and we are clearly feeling the impact in the short term, we have faced similar situations in the past and have shown tremendous resiliency in bouncing back. We have every reason to look to the future with confidence that cruising will remain a vibrant industry.” Cruising accounts for $6.3 billion in direct spending in Florida.
Before the incident, cruise lines were reporting improved business during the typical peak booking season that runs from January through March and were confident that they were rebounding from the economic downturn, when operators reduced prices to fill ships.
But the wreck caused an instant drop in bookings, especially in financially stressed Europe; some cruise operators say future bookings are still down compared to a year ago. In Carnival’s latest earnings release, the company slashed its earnings forecast for 2012.
Carnival Cruise Lines CEO Gerry Cahill said business from November to the first half of January was stronger than he’d seen in five years, and even with the accident, bookings from January through the end of February were stronger than a year ago. Still, he acknowledged that business would have been much better had the accident not happened.
“I think we were all in a very good position at the beginning of the year,” said Kevin Sheehan, president and CEO of Miami-based Norwegian Cruise Line. Two month after the shipwreck, “we’re all back to moving on to the future and building this great industry that we all know is here and has been a fantastic growth proposition for many, many years.”
Contributing to that growth: the introduction of several new and revitalized ships, development of new and rapidly growing markets such as China and Brazil and investment in expanded ports around the world.
Many of those players were present at Cruise Shipping Miami, which brings together vendors, travel agents, cruise operators and port representatives. In its 28th year, the conference has drawn about 1,000 exhibiting companies and an estimated 11,000 attendees from 110 countries.
Said Stein Kruse, Holland America Line’s president and CEO: “When I look into the future, it’s awfully bright.”