Cruise ship passengers take to the seas for the sun, sights, gourmet food, luxury and entertainment. But in some cases they’re getting more than they bargained for, and not in a good way. Yet the cruise industry’s profits are sailing along nicely. CCTV America’s Rachelle Akuffo reports.
Disease outbreaks and mechanical failures have put the cruise industry under scrutiny. Carnival Cruise Lines is one of several companies facing a class-action lawsuit. An engine room fire left the ship adrift for days off the coast of Mexico last year without air conditioning, working toilets or cooked food.
According to the Centers for Disease Control and Prevention, more than 100 passengers of Royal Caribbean’s Grandeur of the Seas, were overcome with bouts of vomiting and diarrhea. In a statement, the cruise liner linked the illnesses to Norovirus.
When the ill-fated Costa Concordia was steered into the rocks in Tuscany back in 2012, 32 passengers drowned, while the captain abandoned the ship.
Even with Problems, Cruise Business Doing WellCruise ship passengers take to the seas for the sun, sights, gourmet food, luxury and entertainment. But in some cases they're getting more than they bargained for, and not in a good way. Yet the cruise industry's profits are sailing along nicely. CCTV America’s Rachelle Akuffo reports
There’s also Congressional scrutiny as cruise lines are largely able to dodge paying U.S. taxes by registering their companies and ships overseas, in some cases paying 1.3% on their profits.
While these incidents would be a public relations nightmare for most sectors, the cruise industry is handling the rough seas rather well.
According to Cruise Market Watch, people were still willing to spend money for cruises even during the financial crisis in 2008.
And that trend shows no signs of slowing down. Around 21 billion passengers booked cruises last year, and an estimated 24 billion are expected in 2018.
Cruise lines are planning to launch another 16 ships in the next 2 years to keep up with demand and Asia appears to be a key market.
Royal Caribbean’s Quantum of the Seas cruise ship, will make its home in China in 2015, sailing from Shanghai to South Korea and Japan. This is in addition to 2 ships the company already has in Asia, sailing to destinations like Kuala Lumpur, Singapore, Tokyo and Hong Kong.
The United Nations estimates that Chinese spending on international tourism jumped 40% to $102 billion in 2012, but the Asian market as a whole only accounted for a small percentage of cruise line passengers.
Reasonable prices and repeat customers have been the recipe for success so far according to industry analysts – and expanding to Asia’s growing middle class travelers could send profits sailing faster.
Royal Caribbean International just announced that its newest ship, Quantum of the Seas, will make its home port in Shanghai, China. To discuss this development and more we were joined by Royal Caribbean International President and COO Adam Goldstein.