'Stench cruise' fallout: Will it create a stink for Carnival and the industry?

Carnival will take a hit from the 'stench cruise' ordeal, and the industry will scurry to reassure potential customers. But the impact on the growing sector should be short-lived, experts say.

By , Staff writer

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    The 'stench cruise' ship Carnival Triumph is moored at a dock in Mobile, Ala., Friday.
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Five days adrift in the Gulf of Mexico without flushable toilets did little to please some 4,200 people aboard the Carnival Triumph.

It’s also a blow to the cruise industry and especially to a major player in it, Carnival, even though the passengers are now back on land.

At least in the short run, the event that might go down as the “stench cruise” hits the company’s earnings. It also puts pressure on the whole industry to mount publicity campaigns to reassure potential customers that maritime vacations are fun and safe.

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But as harrowing as the experience was for passengers, and as publicized as it was by the news media, it’s not yet clear whether the incident will change the longer term course of an industry that’s been steadily growing its business volume for years.

“It’s a short-term blip,” predicts Ross Klein, a sociologist who tracks the industry and works at Memorial University of Newfoundland in St. Johns. But “it'll impact the whole industry,” he says, and “certainly Carnival more so than the others.”

Judging by one online survey this week, some people look at this news and say, "I'll never do that." But that's a setback, not necessarily a reversal for an industry that has been roughly doubling its business each decade, Mr. Klein says.

He notes that the industry was little fazed, in the end, after the highly publicized Costa Concordia disaster a year ago, in which a similarly sized cruise ship ran aground off the coast of Italy, leaving more than 30 people dead. The operator of that ship, Costa Cruises, is owned by Carnival.

Although the latest cruise ship trouble lacks some of the Concordia’s drama – no fatalities, no destruction of a costly ship, no focus on allegations of gross negligence by the captain – it has its own potential for affecting the consuming public.

The Triumph’s loss of power (caused by an engine fire that was successfully put out on Feb. 10) occurred close to home for the American public and news media. And the reports from passengers during and after the ordeal brought home vividly what the loss of everyday amenities like plumbing and air conditioning might mean when several thousand people are wedged into relatively small quarters.

On Friday, the morning after the Triumph was towed into the port of Mobile, Ala., more details were emerging as passengers commented on their experience.

Passenger Julie Billings told NBC News that the experience “was like post-natural disaster, but stuck on a boat with 3,200 other people, and those poor workers trying to clean up after everyone and deal with everyone freaking out.”

Passengers also praised Triumph’s crew – roughly 1 in 4 of the people on the ship – for their hard work to make the bad situation bearable.

“They got everyone back,” says Dan Askin, senior editor at the online publication CruiseCritic. But it was “obviously a deplorable situation on the ship.”

He says such incidents are not common in the industry, although the Triumph case is bringing other past cases into memory, such as a 2010 parallel involving another Carnival ship, Splendor, that had to be towed back to port.

Mr. Askin says the company reported no adverse effect on pricing for bookings in the months following the Splendor incident. The company still bore a cost of about $65 million in compensating affected passengers and being unable to use the disabled ship for a time.

Cruise aficionados will take the event in stride, Klein predicts, while the industry might have a tougher time in the months ahead luring first-time customers.

An online poll, conducted by CruiseCritic from its reader base Feb. 12-13, found most people saying “no” to the question of whether the Carnival Triumph fire would “put you off cruising.” Of more than 3,000 respondents, only 11 percent said it would affect their behavior – split between some who “won’t book one for a while” and some who “doubt I’ll cruise again.”

The Triumph incident will be investigated, which in some cases can result in new regulations, Askin says.

Carnival estimated this week that the Triumph setback will cost 8 to 10 cents per share in earnings during the year’s first half. That would translate into a hit of as much as $78 million. The company’s share price has fallen from about $39 just before the news, to about $37 Friday afternoon. That’s nearly a 5 percent dip.

CEO Gerry Cahill was on hand to apologize to customers as the ship docked in Mobile. The company is offering passengers a full refund of their cruise and transportation costs, plus $500 and a “future cruise credit equal to the amount paid for this voyage.”

The company has also canceled 14 Triumph sailings, keeping the ship off-line through April 13.

But on Friday, the home page of the Carnival website was about business as usual: “Book your Euruopean cruise early,” it beckoned in one headline, “for the dream vacation you’ll always remember.”

“Quite honestly the industry seems to weather every storm, as a whole at least,” Askin says.

Globally, the cruise industry employs some 753,000 people and has “nearly $100 billion in economic impact,” the Cruise Lines International Association reports.

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