The other day our cruise ship lawyers reported on how cruise industry stocks are doing severely underpar from their previous and usual highs pre-Costa Concordia crash and Carnival Triumph cruise ship fire. Carnival reported lower projected earnings for the first quarter, but we had yet to hear from Royal Caribbean Cruises Ltd. on how their revenues will be affected.
Although a recent Harris Poll has shown the nation’s trust in Carnival Cruise has dropped significantly in the months following the Triumph fire debacle that left thousands of people stranded in the ocean amidst unsanitary conditions, but this cruise ship accident also caused other major cruise lines to feel the effects. While not as much as Carnival, the Triumph fire and Carnival’s subsequent seemingly apathetic reaction to passenger plights was enough to lower the opinions of other major cruise lines as well, including Royal and Norwegian.
Now that Royal’s recent fire aboard the Grandeur of the Seas has traveled media outlets across the nation, the line knew it wouldn’t be long before it too would suffer financially. According to the company, the cruise ship fire will cost the line roughly 10 cents per share for the year, leaving the stock at $2.46 per share for the remainder of the year.
The cruise fire occurred while the Grandeur was en route to CoCo Cay in the Bahamas. Yet, unlike the Carnival Triumphs’ fire, the vessel did not lose any power and the fire was taken care of in just two hours. Also unlike the way Carnival authorities handled the situation, Royal immediately changed the itinerary of the vessel and stopped in Freeport to assess the damage. For passengers whose rooms were affected by the fire, hotel overnight stay was provided at no cost.
The next day, the Grandeur’s 2,200 passengers were flown home, offered full refunds AND given future cruise credit. But while many cruise ship accidents occur over negligence and wrongdoing and cruise lines work to cover them up and cut their losses, Royal acted admirably and did its best to compensate passengers for their lost time.
Once the total damage was assesed, Royal decided to cancel the remaining vacations on the vessel until July 12. Had Carnival cancelled the previous itinerary before the fire, when mechanical problems were discovered, perhaps the abhorrent conditions passengers were subjected to in the Gulf of Mexico would have never occurred.
Royal Caribbean stock shares have now fallen roughly 61 cents to $35.10 at the end of May. But seeing as how the cruise industry is resilient, the line – and others – will likely bounce back stronger than before hopefully with new safety equipment to prevent these types of accidents from taking place at all.