One year on from the Costa Concordia disaster, Melanie Hall looks at its impact on the cruise industry, and what its legacy will be
From the moment Costa Concordia struck rocks off the coast of Italy on January 13, 2012, claiming 32 lives, the cruise industry braced itself for a challenging year.
The first Monday after the disaster saw more than £1 billion wiped off the stock market value of Costa Cruises’ parent company Carnival Corporation, with its share price collapsing by as much as 30%. First quarter profits for Royal Caribbean almost halved to $47 million, against $78 million in the same period in 2011.
Analysts said the tragedy would be a ‘black mark’ on the industry, and predicted a collapse in the cruising market. Yet despite the grim forecasts, cruising has managed to weather the storm.
After-effects from Costa Concordia still linger – Carnival Corporation recently posted a 55% drop in its fourth-quarter profits in the three months to November 30, 2012, with a 23% fall in profits across the whole year.
But figures indicate growing demand for cruising. The number of Brits taking an ocean cruise rose 20,000 to 1.72 million in 2012 and the Passenger Shipping Association predicts this upward trend will continue to 1.76 million in 2013. While the figures do not include those cruisers who take multiple trips during the year, it remains positive news.
David Dingle, chief executive of Carnival UK and a European Cruise Council member, said: “The UK was fortunate in having less long-standing customer reaction to the Costa Concordia tragedy than in some other markets.
“Countries where the victims came from were more commercially affected, which is understandable.”
These include Germany, which Dingle said was particularly badly hit, as well as Italy and the US.
Unlike other travel disasters, which tend to receive big headlines and then are quickly forgotten, the spectre of Costa Concordia continues to haunt the industry.
The impending indictment of captain Francesco Schettino, along with seven crew members and other staff at the end of the month, will raise the issue of cruise safety again. Schettino faces up to 20 years in jail.
Meanwhile, passengers and crew have launched a class action to sue Carnival Corporation for damages, after many of the 3,000 passengers rejected the company’s offer of £8,900 (€11,000) each in compensation.
In addition, expect even more news coverage when the salvage operation to re-float and remove the vessel is completed – most probably in June. Work is now under way to stabilise the ship before the vessel can be righted.
According to agents, UK consumers have long since moved on from Costa Concordia.
“We haven’t had it mentioned for eight months,” said Ted Bartlett, cruise manager at Thornton’s Cruise World in Bristol. “I would say we have had more reaction to the norovirus problems.”
Mervyn Willard, general manager at Baldwins Travel in Kent, said: “We never did a huge amount of Costa business, and I can’t say that I have had regular clients put off by the events of Costa Concordia.
“We don’t know whether we would have had any more new clients if it hadn’t happened, but regular cruisers have put it down to captain error – there was nothing wrong with the ship.”
In response to the tragedy, the global cruise industry set out 10 new policies to improve safety, while ship captains, crew and cruise lines the world over will no doubt have taken on board the lessons that emerged.
“The legacy of Costa Concordia is a cruise industry that is even safer than it has ever been in the past,” said Dingle.