The cruise industry hit a patch of rough seas over the weekend when Carnival (NYSE:CCL) cruise ship Celebration came back to Galveston, Texas, with just over 300 passengers and crew members ill. Might the entire sector catch the bug?
Along with the Carnival PLC (NYSE:CUK) depositary shares created when the company swallowed rival P&O last year, Carnival was beginning to look seaworthy. It closed out a solid fiscal 2003 with bookings for the year running 33% ahead of last year. A cheap dollar and improving global economy played right into Carnival's coffers.
Now, we might have norovirus worries to battle, with hundreds succumbing to uncomfortable yet not life-threatening gastrointestinal illnesses. And it's not just about the unfortunate passengers and their refunds and credits for future sailings. The perception of unhealthy cruising is a sucker punch to potential cruise-happy travelers.
Two years ago, hundreds of passengers on Holland America and Disney (NYSE:DIS) cruises came down with a Norwalk-like virus. The bad tidings were contagious, but the sector bounced back. Over the past year, shares of Royal Caribbean (NYSE:RCL) have more than tripled; Carnival's have nearly doubled.
It's been a long road back. The sector cruised for a bruising three years ago, overexpanding just as the travel industry headed towards a lull. In time, sector consolidation and cutbacks on obscure, underutilized ports helped strengthen the outlook.
And now this latest outbreak. Carnival had better hope that this setback is an isolated incident. It's hard to coast into a rainbow sherbet sunset when a dangling anchor weighs heavily.
Are you worried about another viral outbreak on a cruise ship? Do you have plans to cruise this year? Any horror stories or praise from cruises past that you would like to share? What are your favorite ports of call? All this and more -- in the Best Travel Spots/Tips discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz has taken advantage of his Miami homestead to cruise cheaply on just about all of the lines. He does not own shares in any companies mentioned in this story.
