Posts Tagged ‘Captain’

Word Cloud: Captain Schettino

A type of boomerang occurs for companies and victims that suffer tragic events.  First is the event itself, which is followed many months later by its reemergence in the news during subsequent trails and lawsuits.  And so it is with Carnival, Concordia passengers, crew and their families while the captain of the cruise ship finished his pre-trial hearings last week.  While no date has been set for the actual court case, we can expect the news flow to continue.

As demonstrated by the word cloud of that news flow below, the Captain remains squarely at the center of the discussion.


And the impact has been felt in the industry.  Three weeks ago on September 25th, the word "Costa" was mentioned 67 times in Carnival's Q3 earnings conference call.  That was more than “Executive” (66 times), but less than “quarter” (96 times).

In summary, earnings were reduced as a result of the Concordia incident by about $500 million, and Costa lost about $100 million in 2012.  In the most recent financial quarter – a quarter that booked revenue for sailings six to eight months after the accident, Costa accounted for over half of Carnival’s decline in net revenue yields.

The Costa brand’s occupancy drop was 5% in 2012, with an 11% decline in the second and a 6% drop in the third quarters.  In the fourth quarter of 2012 Costa’s ships are expected to match the occupancy rates of a year prior, albeit at lower prices.

Going forward, pricing and occupancy for Costa's bookings in Q1 2013 are tracking lower on a year-over-year basis.  However, these differences will narrow as year over year comparisons versus 2012 become easier.  According to Howard Frank, Carnival’s Vice Chairman and Chief Operating Officer “Based on consumer research, the brand perception in each of Costa's major markets is gradually improving so we are greatly encouraged by the resiliency of the brand.”

In fact, Carnival has a new build on order for Costa with expected delivery in the Fall 2014  The Costa brand is also helping to develop an emerging cruise market strategy in Australia and Asia.  Carnival has increased capacity by 8.5% in these markets and will be sending the Costa Atlantica to join the Costa Victoria in China in the spring of 2013.  Costa was an early entrant into the Chinese market and has a marketing history there.