When Carnival (CCL) and Royal Caribbean (RCL) announced their earnings this past week, they told us what many travel agents assumed. The images and video of the Costa Concordia disaster caused cruise bookings to take a sharp decline in January. Carnival stated that sales dropped in the range of 15% compared to 2011 with reservations hitting a low on January 16.
The cruise industry is in the middle of wave season, when 30% of all cruises are booked. Also contributing to the lower sales is the warmer winter that much of the country has had the past few months. Nearly 11 million Americans spend $14.5 billion on taking cruises in 2011. Getting away from the cold and sailing to a warmer climate is a large part of the the success of cruise lines.
Only cruise bookings for the first 9 months of 2012 have been affected. Demand for cruises for the 4th quarter of 2012 and beyond have seen bookings close to being in line with previous years. It is important to note that sailings in the first 9 months of this year have fewer cabins available due to great sales before the Concordia accident.
Cruise lines are still waiting to see if demand will pick up before they begin to lower prices. If bookings remain low, there is a good chance that some incredible cruise deals will become available. However, you do not have to necessarily wait for these great deals. Most cruise lines will match the lower price if it drops before final payment. Some cruise lines will even give you the difference in on board credit if final payment has already passed. Check with your local travel agent or the cruise line to make sure that the rate that you book with is eligible.
The cruise industry has weathered the downtown it took after 9/11 and the Great Recession. They will likely survive this new slowdown as well, although it may take lower prices and steep discounts to lure passengers back to taking a cruise.