Last week was naturally brutal for Carnival (NYSE: CCL ) after the catastrophic grounding of the Costa Concordia off Italy's Tuscan coast. The stock took a 13.6% initial hit on the news last Monday, recovering slightly to close out the week off by 7.9%.
The fear beyond the grim fatalities was that the cruise industry would take a massive hit in bookings as potential passengers re-evaluate the risks of hitting the open seas for their next vacation.
Whether or not that will be the case remains to be seen, but it's certainly not being reflected in the share price of related companies. Rival Royal Caribbean (NYSE: RCL ) may have taken a 6% hit on the first trading day after the incident, but it made a good chunk of that back to close out last week with a mere 2.5% loss.
Steiner Leisure (Nasdaq: STNR ) -- the spa operator on 153 of the industry's largest vessels -- didn't even take a breather. Its shares climbed 2.5% last week, even though its bread-and-butter floating spa business is naturally susceptible to an industry slowdown.
The prolonged nature of the Concordia's recovery efforts isn't helping Carnival. Every day or so finds divers locating more lifeless bodies of submerged passengers. There have been 16 recoveries so far, and another 16 passengers are still missing and presumed dead.
Carnival has taken some additional heat this week. The Wall Street Journal called out the company's CEO on Monday for remaining silent since the accident.
"Where is Micky Arison?" the financial daily questioned.
Arison isn't typically tight-lipped. As the owner of the Miami Heat, Arison was fined by the league for calling out his fellow owners during this summer's NBA lockout. He's been vocal about the proposed Genting casino project in downtown Miami, a stone's throw from his fleet of stateside tax-dodging ships with their onboard casinos. Why is Arison silent now?
Well, Arison's strategy may make sense. There's nothing that he can say to make a crisis go away. BP's (NYSE: BP ) Tony Hayward found that out firsthand when the oil giant had its own maritime tragedy in 2010. The former BP CEO was outspoken about the Gulf of Mexico disaster. He said all the right things, but a bloodthirsty mob wasn't going to be satisfied until it made him a scapegoat.
If anything, the problem now seems to be what Carnival is saying.
The cruise industry leader began to take some heat earlier this week when news circulated that it was merely offering surviving passengers a refund on the Concordia sailing and a 30% discount on a future sailing.
Rivals have done their best to steer clear of the mess.
Disney (NYSE: DIS ) had originally scheduled a press conference for Wednesday of last week to reveal expansion plans for its growing fleet of cruise ships. When the House of Mouse realized that staging a jubilant press event just five days after a fatal European cruise was a bad idea, it postponed the announcement. Disney finally made it official yesterday, revealing that the Disney Wonder will embark on winter and spring itineraries out of the Port of Miami.
More competition for Carnival? Well, this just hasn't been Arison's month.
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