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Cruise bookings down notably since accident

The world’s largest cruise company today revealed that bookings have dropped significantly in the wake of the Costa Concordia disaster.

Industry giant Carnival Corp., the parent company of 10 major cruise brands including Costa, Carnival, Princess and Holland America, said in a regulatory filing that bookings at its non-Costa brands declined “in the mid-teens,” percentage-wise, in the 12 days after the Jan. 13 accident as compared with the same period a year ago.

Bookings at Costa also are down, although the precise amount is more difficult to measure, the company says.

“Costa’s booking activity is difficult to interpret because of the significant re-booking activity stemming from the loss of the ship’s use and related re-deployments, however we believe it to be down significantly,” the company says in a 10K regulatory filing with the U.S. Securities and Exchange Commission.

Carnival notes that it significantly reduced its marketing activity in the days after the accident, and the decline in bookings “bottomed out” on Jan. 16, three days after the incident took place.

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The company says in the filing that it does not expect the downturn to be long lasting.

“Despite these recent trends, we believe the incident will not have a significant long-term impact on our business,” it says.

Carnival also updated its estimate of the immediate financial impact of the accident. The company said costs related to loss of use of the ship for the rest of the fiscal year, insurance deductibles and other related costs could be $155 million to $175 million, or about $0.20 to $0.22 per share.

Carnival also said it expects to face additional financial impacts as a result of the accident, including lower net revenue yields company-wide for its cruises, “that are not possible to reasonably determine at this time.” The company indicated that it would be able to provide a clearer picture of the additional impacts in March.

Carnival says a damage assessment review of the ship is being undertaken to determine whether it can be repaired and what the total cost would be.


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