European Cruise
Is Terrorism Affecting European Cruise Bookings?
Both European ocean and river cruise reservations are feeling the affects of the recent terrorist attacks in France, Belgium and Turkey. Even in instances where capacity remains the same or grows, first quarter earnings calls for 2016 indicate that revenue is down from expectations, at least among North American travelers.
Seatrade Cruise News quoted Viking Cruises chairman Torstein Hagen as saying that this year’s European river traffic has been “a bit weaker than anticipated due to the events in Paris and Brussels. Everybody feels that.”
And he’s right. Frank Del Rio, President and CEO, Norwegian Cruise Line Holdings Ltd. also said, “European sailings are under pressure. The cumulative impact of successive events across Europe in the past month have indeed affected booking patterns for sailings in the region, particularly among North American consumers who have comprised the majority of our sourcing pool.”
Del Rio added, “The weaker demand from high-spending North Americans has increased our reliance on local European sourcing, which have historically booked closer in, and at lower prices, and with lower onboard spend.”
READ MORE: How The Brussels Attacks Have Affected River Cruise Travel
Royal Caribbean Cruises Ltd. is also in a position that it is sourcing clientele for its brands more from Europe. Jason Liberty, the company’s chief financial officer, said, “…demand for Mediterranean sailings has been strong particularly from European points of sale, and load factor is ahead of last year. However, recent geopolitical events did have an impact on booking volumes in the United States. While bookings have now returned to typical levels, we had to lower pricing and shift sourcing to recover the volume lost during the initial lull in demand.”
Carnival Corporation is in the same boat so to speak. Its chief financial officer, David Bernstein, said, “For the seasonal European program, occupancy is nicely ahead of the prior year at lower prices driven by the geopolitical risk impacting the Mediterranean trade as anticipated in our guidance.”
The trick seems to be to shift fleets around where markets are stronger and regions are deemed safer. Arnold Donald, CEO of Carnival Corp., said, “While at the same time we reduced supplies in more challenging trading environment[s] in Southern Europe by transferring Costa capacity to China.”
READ MORE: What Do Paris Attacks Mean for Cruising?
Carnival Cruise Line’s new Carnival Vista originally planned to call on Izmir, Turkey, but that port has been replaced with a stop in Kusadasi, Turkey instead.
When reached out to for comment, Jennifer De La Cruz, Carnival’s vice president, public relations said, “quite some time ago we had canceled the call in Izmir on the first four Vista sailings that featured it…We had not canceled through the full season, though, as we took the position that we were going to monitor. We have now opted to cancel all Izmir calls and replace with Kusadasi…The call in Izmir has been canceled based on a U.S. State Department travel advisory that includes specific reference to Izmir. Kusadasi is not the subject of the advisory and several of our sister cruise lines have called there in recent weeks with very positive feedback.”
Meanwhile, Royal Caribbean recognizes strengths elsewhere in Europe. Liberty added, “Outside of the Mediterranean, European business is far more encouraging with volumes and rate[s] both in a good position for the Baltics. North American base products account for just over half of our 2016 capacity and are proving to be another bright spot this year.”
As for Norwegian, Del Rio also said, “…we believe the worst of the slowdown is behind us, as we have seen positive booking traction in the last four weeks, and remain hopeful that the momentum continues.” Either way, Wendy Beck, the company’s executive vice president and chief financial officer said, “Continued strong demand in the Caribbean, Alaska, Bermuda, and Hawaii is offsetting softness in Europe which comes mainly as a result of lower demand from North American consumers.”
Royal Caribbean’s Liberty similarly added, “…overall demand for cruising from North American consumers remains extremely strong, and our Caribbean, Alaska and Bermuda itineraries are each poised to have a strong year and generate nice yield improvements.”
