During Royal Caribbean's fourth quarter 2011 results, the company commented on the impact the Costa Concordia tragedy has had on its business. The following is from Royal Caribbean's press release.
It is very difficult to assess the impact of the incident on our revenues. It has been the subject of extensive media coverage and world-wide attention. In addition, we curtailed our marketing activities as did most cruise lines and travel agencies. We believe that most observers and potential guests understand that cruising is safe and that this incident was a very rare anomaly in an otherwise reliably safe vacation. But in the near term it has a significant impact on our bookings.
We are pleased to note that there has been no material change in cancellation activity which has remained within normal levels. However, new booking activity has been hurt. Overall booking volumes from North America have fallen by low to mid-teen percentages versus same time last year for the last few weeks. In Europe, where media coverage has been more extensive, the decline has been higher, though results vary significantly by country. In aggregate the company's other markets, including Asia/Pacific and Latin America are down slightly. For the year as a whole, notwithstanding the recent slowdown, booked load factors and pricing are still higher than they were at the same time last year. This reflects the very robust starting position the company was in before the incident.
The impact on bookings has been greatest in the first three quarters and wanes as the year progresses. On the other hand, the first quarter also has more of its capacity booked making it less affected by changes in booking patterns. Spring and summer sailings are showing the largest declines in new bookings, while longer term bookings remain healthy. In addition, the company noted that the impact is much greater for first time cruisers compared to experienced cruisers. This reflects the greater knowledge experienced cruisers have about cruise vacations and ships.
Including the contribution from distribution changes and deployment initiatives noted above, the company currently anticipates yield improvement for the full year 2012 to be in a range between 1% and 5% on a Constant-Currency basis and between flat and 4% on an As-Reported basis versus the prior year.
Already, bookings have started to recover, particularly in North America and the company does not expect that this event will have a significant long term impact on its business.
