As images of the sinking Costa Concordia filled newspapers and TV and computer screens all over the world in mid-January, it seemed inevitable that the disaster would cause become a disaster for the cruise industry as a whole. By now, we have clear signs that demand for cruises has shrunk. On the upside for travelers, to boost demand, cruise lines are dropping prices, sometimes dramatically.
It’s difficult to get a grasp on cruise prices. Each line has brochure prices. But nobody pays those. The majority of cruisers buy their voyages from travel agents, and the prices they pay are usually substantially lower than the brochure price. What’s more, to drum up business, travel agents sometimes throw in extras—airport transfers, on-board credits, free or discounted airfare—that makes it even harder to figure out which package is the best deal, and how and when the best bargains are available.
As soon as the Costa Concordia tragedy occurred off the coast of Italy, the assumption was that demand for cruises would plummet, as would cruise prices. Did that happen? Toward the end of February, USA Today cited data indicating that average cruise lines had held the line, and prices for sailings had remained flat. Yet, those numbers may have been skewed because during the time period being discussed, there is normally a rise in cruise bookings. What’s more, cruise lines seem to have been increasing incentives such as on-board credits, in order to attract travelers without lowering cruise prices, technically.
Even so, certain cruises—in particular, sailings in the Western Mediterranean, where the Concordia sunk—have undeniably gotten cheaper. By mid- to late-February, average fares for Western Mediterranean cruises cost 1% less than they did when booked at the start of 2012, even though cruises in early January typically sell for less than those in the peak-peak season months of February and March.
All of these figures seem to understate the impact of the Concordia disaster, though. Bookings with some cruise companies have decreased by as much as 20%. By no small coincidence, according to the New York Times, prices among major cruise lines in Europe are down 12% compared to last year.
Caribbean cruises are less expensive as well. For passengers booking at the last minute, a seven-night Carnival cruise was selling for as little as $449, or a mere $64 per person per night. (Generally speaking, anything averaging under $100 per night is a pretty good deal.) Luxury lines such as Crystal Cruises, which includes wine, spirits, and gratuities upfront in their prices, has offered 10-day transatlantic cruises for just $1,360, less than one-third of its brochure rate of $4,720.
The website dealnews, which specializes in finding deals and tracking prices for all sorts of products, services, and packages from year to year, has noticed that Caribbean cruises were selling last month for 11% less than they were in February 2011. If the Concordia tragedy was removed from the equation, prices could have been expected to be rising right about now, thanks to the onset of peak season travel, along with soaring gas prices. Dealnews explains:
These price drops come amidst rising gas prices and are bucking the overall trend of rising travel costs, which indicates that the cruise industry is scrambling to recuperate its image and to find incentives for customers to buy.
If there’s one place that the cruise industry can look to see how tourism images can be recuperated, it’s Japan. The Los Angeles Times reports that after the tsunami and nuclear disaster of last year, when tourism spending declined by 4%, tourism has rebounded. Travelers apparently feel safe visiting Japan again. Based on spending thus far in 2012, forecasts indicate that international tourism revenues will hit $129 billion this year in Japan, surpassing 2011, of course, but also that of the tragedy-free year of 2010.