Cruise prices hold steady after Concordia

Travel agents report solid cruise bookings after the Costa Concordia disaster.

Story highlights

  • Luxury travelers are still booking cruises
  • Some cruisers show a preference for U.S.-regulated ships
  • Warm weather, economic instability may decrease demand for cruises
Less than two weeks after the Costa Concordia cruise disaster, customers are still booking cruises for 2012 -- even as they ask more questions about safety at sea. The cruise industry is in the middle of its "wave season," the first three months of the year when the majority of customers book their cruises.
"While I'm engaging in lots of conversations with customers, I'm going to say -- knock on wood -- I haven't seen any negative effect on booking levels or trends as of yet," said Scott Kertes, owner of Hartford Holidays Travel in Garden City, New York, who focuses primarily on the luxury market. "The real worry is the younger market, the first-time cruisers. It's still a little too early to see if there's going to be any fallout."
He expects budget cruise lines to start aggressively discounting their fares to lure the hesitant first-time cruisers aboard.
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Cruises Etc. Travel owner Ruth Turpin says she hasn't had any cancellations of existing reservations. In fact, her bookings have increased over last year, and customers are booking Alaska and Scandinavian cruises. However, the Fort Worth, Texas, agency owner notes that her clients are experienced cruisers who primarily sail on the luxury lines.
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Turpin books her clients only on cruise lines where English is the ship's primary language and on ships subject to U.S. Coast Guard inspection. (Neither was true of the Concordia.)
"I think our customers have known through the years that these cruise lines have a really strong ethic with safety," she said. Safety drills are "the first thing that happens the minute they get on the ship."
Cruise prices are actually up 1% since the beginning of the year, according to the UBS Cruise Tracker released Tuesday. Cruise prices in the Caribbean and Alaska are up moderately over the past few weeks, while Mediterranean pricing has been stable since November.
The impact of the Concordia on pricing is still unclear, says Michael Driscoll, editor of Cruise Week, a trade industry publication.
"It's anyone's guess right now," Driscoll said. "It's safe to say the lawyers in the cruise industry will be working overtime in the next few months. It's just hard to predict right now, because it really is unprecedented."
Cruise industry analyst Matthew Jacob said he suspects that bookings have dropped while pricing has held steady because travelers who are concerned about safety aren't likely to be swayed by lower prices.
"I think that if, in fact, bookings have slowed and they continue to be weak for another couple of weeks, I believe at that point, we may start to see prices come down," said Jacob, a director with ITG Investment Research.
Other factors may decrease demand
Caribbean cruise lines, heavily dependent on cold weather to attract U.S. customers tired of the snow, have seen bookings decline as warmer weather has kept people at home, Kertes said.
Mediterranean cruise lines were already facing lower demand because of high U.S. airfares to Europe and economic instability in Greece and Turkey, Kertes said. Turpin notes that there are a lot of ships sailing in the Mediterranean, which means bookings are being spread across many cruise lines.
Customers are asking more questions about safety drills and safety records, travel agents say. The fact that the Costa Concordia didn't conduct a same-day safety drill for passengers boarding the ship was surprising to some agents, and Kertes says he expects more cruise lines to tighten their safety procedures and have drills before a ship sails.