The September 11th attack
Cruise lines also take major hit as stocks fall
Advertiser Staff and News Services
As the world's tourism industry takes a hit, the three major U.S. cruise lines have sustained millions of dollars in losses and have seen their stock prices plummet, wiping out billions of market value.
Smaller companies also have taken a hit. American Classic Voyages, parent company of Hawai'i's two locally based cruise ships, has seen its stock go from $2.03 at closing on Sept. 10 to $0.91on Friday.
Executives said that immediately after the terrorist attacks in New York and Washington, only four people left the Patriot, which was sailing Hawai'i. But cancellations for cruises last weekend hit the 40 percent mark by Sept. 14. Bookings this weekend are doing a bit better, said Randy Talcott, the company's vice president of finance.
"The problem last weekend was that people couldn't get to Hawai'i because they were unable to get flights," Talcott said while declining to specify an occupancy figure. "The ships are sailing closer to full than they were."
While cancellations seem to have leveled off and there is evidence that bookings are picking up, analysts say a sustained military action could cripple the industry.
Shares of Carnival Corp., the world's largest cruise company, have dropped 36.7 percent since Sept. 10, from $28.52 to $18.05 at the close of trading Thursday.
Royal Caribbean Cruises Ltd. stock has dropped 58.6 percent, from $21.85 on Sept. 10 to $9.05 Thursday. American depositary shares of P&O Princess Cruises PLC of London have dropped 42.3 percent from $21.40 to $12.35.
The three companies control 80 percent of the domestic cruise-line business and, along with Malaysia-based Star Cruises, 76 percent of the worldwide market, according to Cruise Industry News, a trade publication.
In the week following the Sept. 11 terrorist attacks, cruise lines lost millions because passengers could not get flights to port cities. The companies also had to add extra security and turned some of their ships into floating hotels for passengers who couldn't fly home.
Royal Caribbean estimated it incurred between $20 million and $25 million in extra costs last week. In a conference call with analysts Thursday to discuss third-quarter earnings, Carnival executives said their losses would be comparable. Both companies said bookings were about 50 percent lower this week than the same period last year.
Bookings normally fall off in October. Companies see nearly their entire year's businesses booked in January and February, a period companies call "the wave."
But unlike the airlines, the cruise industry is caught in the middle of a historic expansion. The industry is twice the size it was during the Gulf War.
