The Cruise Industry Lives On

The cruise industry has received some pretty awful PR in recent years. The first blow came a came a captain drunk-drove the Costa Concordia into Italy’s coastline killing 32 people. The second big blow was a major engine room fire aboard the Carnival Triumph which left the ship stranded in the Gulf of Mexico without air conditioning or functioning toilets. The understandably shaken confidence among customers rocked the industry, making profits and stock prices plummet across the board. The interesting thing going forward though is how the industry has reacted to that and the answers are enlightening.

Preventing the causes of the past issues is the easy part for the cruise liners. It’s easy enough to not cut corners with ship maintenance and hire captains with the good judgement not to drink on the job. The difficult part is rebuilding consumer confidence. How can you convince a potential customer that something isn’t going to go wrong again and get them back on your boat? The answer the industry came up with was simple, lower the price dramatically and provide some additional incentives. Cruise fares have provided potential cruisers some incredible deals unheard of before those disasters. For those that need some extra reassurance Carnival has recently announced that they will pay to send you home if you’re not satisfied within the first 24 hours. Of course, disasters like the ones that happened last year are unlikely to occur within the first 24 hours meaning there is little risk for the company itself. What is amazing though is that their strategies seem to be working. They’re not nearly as profitable as they were last year but they are still making money. It’s amazing how much more risk-tolerant we become when we get a great financial incentive.

For the record the last time I was on a cruise was more than 20 years ago when I was a toddler. I almost got my whole family thrown off the boat.

That ship is back out at sea and sold out its first voyage of the summer.

Churchill has short-term corporate housing available Nationwide. Please contact us at 866-255-0593 or for more information.

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