Costa Concordia could delay 2013 cruise bookings

BERLIN Fri Mar 9, 2012 6:28am EST

The cruise liner Costa Concordia (C) lies on its side off the west coast of Italy at Giglio island February 2, 2012. REUTERS/Darrin Zammit Lupi

The cruise liner Costa Concordia (C) lies on its side off the west coast of Italy at Giglio island February 2, 2012.

Credit: Reuters/Darrin Zammit Lupi

BERLIN (Reuters) - Cruise bookings for next year could remain slow until the industry manages to dispel safety concerns after the Costa Concordia capsized off the west coast of Italy in January.

Cruise bookings tumbled after the Costa Concordia struck a rock near the Isola del Giglio and grounded on her side, killing at least 25 people and raising questions about the safety of the luxury cruise ship industry.

A further Costa Cruises ship was left stranded in a pirate-infested stretch of the Indian Ocean after a power failure last week, adding to woes for the company, a unit of Carnival Corp (CCL.N)(CCL.L).

And while most industry players voiced optimism, saying the cruise industry would continue to grow in the long term, the full impact of the disaster will only become apparent in the coming weeks and months as cruises for 2013 go on sale.

TUI Cruises, a joint venture of Germany's TUI AG (TUIGn.DE) and Royal Caribbean, started selling trips for the summer of 2013 and the winter of 2013/14 on March 1, and the bulk of its capacity for the current season was already sold when the disaster happened.

"We cannot yet say whether customer behaviour will change in the new season," a spokeswoman for TUI Cruises told Reuters.

Industry insiders say the incident is probably having more of an effect on those who haven't been on a cruise before, though there are no statistics to back this up at present.

"I think people who've been on ships and seen how they operate have total faith in the safety," Dominic Paul, EMEA managing director at Royal Caribbean Cruises (RCL.N), the world's No.2 cruise company after Carnival, said at the ITB Berlin, the world's biggest travel fair.

Matthias Hartmann, chief executive of German market researcher GfK (GFKG.DE), said bookings, commonly made far in advance, could still catch up as consumers decide on cruises later in the season than they normally would.

"As soon as a topic disappears from public discussions, holidaymakers return very quickly," he said.

Royal Caribbean's Paul said cruise companies were working hard on emphasising the industry's safety record but were battling the vast press coverage of the tragedy.

"As an industry we've tried to answer that, but it takes time for the messages to come across," he said.

Royal Caribbean said last month that bookings were experiencing a slow improvement as media coverage of the Costa Concordia shipwreck subsided.

In Germany, the world's No.3 cruise market in terms of passenger numbers behind the United States and Britain, bookings showed holidaymakers were still nervous, German travel association DRV said last week.

More than 1.8 million Germans, the world's largest spenders on foreign holidays, booked cruises in 2011, shelling out about 2.9 billion euros.

Michael Thamm, president of Aida Cruises, said he expected the global industry to expand by less than 10 percent this year, compared with expected double-digit growth in 2011.

"We have to learn from this, and we are willing to learn. What we believe is that the ship was fine, there were no technical problems, but we have to wait for the investigation to be completed," he said.

(Editing by Will Waterman)

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