The refugee crisis hurts cruise-ship travel

By ,   September 25, 2015 ,   Cruise Industry

The refugee crisis in Europe has an impact on regional cruise-ship travel, according to the chief executive officer of Carnival Corp., Arnold Donald

He said that images of refugees packed in rafts and bodies washing ashore had "a psychological impact on customer behavior". Would-be passengers shared their concerns in the customer research of the world’s largest cruise operator and in questions posed to call-center operators.

Last year, Carnival got 36% of its US$15.8 billion in revenue from Europe. This week, its shares fell after the corporation forecast 4th-quarter profit of 36 cents to 40 cents per share. Analysts projected 46 cents, which is the average of projections compiled by Bloomberg.

Coupled with the overall economic anxiety, the refugee crisis affects the entire tourism industry in Europe. According to Donald, cruise industry was hurt disproportionately because it involved ocean travel. Carnival had to stop its cruise ships twice in 2015 to pick up refugees in Mediterranean Sea. In July, Island Princess rescued 117 refugees off the coast of Greece.

Patrick Scholes, analyst with SunTrust Robinson Humphrey, said in an e-mail that the refugee crisis could negatively impact Royal Caribbean Cruises Ltd., the second-largest cruise operator in the world, Norwegian Cruise Line Holdings Ltd. (NCL) and MSC Cruises Ltd. MSC and Royal Caribbean declined to comment.

Two of NCL Holdings lines, Oceania and Regent Seven Seas Cruises, altered itineraries calling on Mytilene, the capital of Lesbos, where thousands of refugees have landed. The scheduled call of Seven Seas Mariner on September 29 will be replaced with a visit to Kavala, Greece. Kavala will also replace the scheduled call of Seven Seas Voyager to Mytilene on October 29, and one by Oceania Cruises’ Nautica on October 6.